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Destination: DC, Detroit

The outgoing NADA chairman says it’s unfair and ill-advised to slash dealers because of the auto makers’ woes.

Special Coverage

NADA Convention & Exposition

ORLANDO, FL – Normally, a National Automobile Dealers Assn. chairman’s travel duties consist of going around the country, speaking to various state and local dealer groups.

But in an abnormal year, 2009 NADA Chairman John McEleney broke with tradition and focused on repeated visits to two cities.

He traveled as much as his predecessors – about 180 days of the year-long term. “But 90% of it was going to Washington to talk to government officials and going to Detroit to talk to manufacturers,” he tells Ward’s at NADA’s annual convention here.

McEleney’s mission was to combat General Motors Co. and Chrysler Group LLC’s post-bankruptcy reorganization plans calling for the elimination of nearly 2,000 dealers nationwide.

Prodding the dealer cutbacks was a federal taskforce established to oversee the two auto makers after both took billions of dollars in public funds to stay afloat.

McEleney says it’s unfair and ill-advised to slash dealers because of the auto makers’ woes, calling the damage to retailers unimaginable.

“Dealers are not a cost to manufacturers,” he says.

McEleney testified before Congress, which ultimately enacted legislation mandating third-party arbitration for terminated dealers. He also spoke to taskforce members he describes as well-intended but predisposed “Wall Street MBAs” who “treated a multi-billion-dollar crisis like an Ivy League case study.”

McEleney recalls asking one member how long the panel had been studying the issue of an auto industry in turmoil. “He said, ‘About six hours.’”

McEleney, an Iowa dealer, says an act of Congress calling for dealer arbitrations resulted from lobby efforts by the NADA in particular and dealers across the nation in general.

“NADA harnessed the influence and power of 17,000 new-car dealers and successfully leveraged that power in Congress,” he says, addressing an opening session of the NADA convention here.

“We hope the manufacturers have learned something from this crisis,” McEleney tells the audience. “Three lessons come to mind: listen to your dealers, respect your dealers and help your dealers succeed.”

During his tenure, he learned the importance of establishing ties with elected officials, he says.

McEleney draws a standing ovation at the end of his speech, something of a farewell address, as successor Stephen Wade prepares to become the new NADA chairman in a year that is expected to be less stressful for the industry than was 2009.

Looking back at events during his term, McEleney says, “Dealers are survivors by nature.”

Also addressing the general session are two elected officials from Florida, Gov. Charlie Crist and Republican Congressman Vern Buchanan, who is a dealer.

Buchanan, the son of a Michigan factory worker, offers a decidedly pro-business, anti-labor rally cry while blasting high taxes, excessive government regulations and deficit spending.

Buchanan became a dealer in 1992 when he bought an Ocala, FL, Honda store. He went on to acquire other dealerships. His Venice Dodge store fell victim to Chrysler’s dealership cuts.

Crist, wearing a running suit during a somewhat impromptu appearance on stage, explains, “I’m on my way to a race.” He tells the audience: “I can’t tell you how much it means to Florida to have you here.”

NADA estimates its convention will pump $31 million into the state’s economy. “Spend a lot of money while you are here,” Crist tells the audience.

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