Incoming NADA Chairman McEleney Gets More Than He Bargained For

Powerful state franchise laws that protect dealers from manufacturer incursions into their businesses now don’t seem so strong.

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NADA Convention & Exposition

John McEleney takes over the helm as chairman of the National Automobile Dealers Assn. during a period in which the nation’s car dealers are facing the most intense threat in their history.

“There certainly have been a few more issues than we bargained for,” McEleney says. “I guess I’d rather be in the middle of all this than on the sidelines.”

The credit crisis is one issue. Numerous dealers are being squeezed on the floor-plan-credit front, as their lenders force them to pay the principal owed on aged inventor. Meanwhile, potential customers are finding it difficult to get their loans financed. The result is dealers aren’t selling cars and bringing in revenue. As inventory piles up, lenders exert more pressure.

About 1,000 dealers were forced out of business in 2008, and estimates of 2009’s damage range from 1,000-8,000 dealers closing their doors this year.

The powerful state franchise laws that protect dealers from manufacturer incursions into their businesses no longer seem so strong. They offer no protection against banks and finance institutions that once were dealers’ best friends.

“My first priority this year is assisting dealers who have to make tough decisions,” McEleney tells Ward’s. “We’re trying everything we can to be a resource for dealers who might have to close a dealership. It’s not pleasant, but it needs to be done.”

A second priority on his list is helping move General Motors Corp. and Chrysler LLC through the process of restructuring, while also protecting dealers’ interests.

NADA has to reassess its own business this year, as well, as the ongoing economic downturn will continue to cause membership to decline. McEleney started the process in December 2007, but it took a back seat as the credit and industry crisis developed.

McEleney started in the business in 1976 at age 24 running one of his dad’s stores. He is a second-generation NADA chairman – his dad was chairman in 1971.

Asked if his father has offered advice on being the chairman, McEleney says he’s been told to take things one day at a time. “There are some things you can’t control. Dad’s also told me it’s important to have someone to confide in. ‘So you don’t have to shoulder the burden alone.’

“It seems like ancient history now,” he says. “But in the 1970s, people were trading large vehicles for compacts. And then six months ago, the same thing was happening. Every day is kind of crazy here.”

But if there’s one thing McEleney has, it’s staying power. His grandfather started the business in 1914. “My dad took over when he was 30.” Talking with Ward’s just 10 days after his mother’s death, he says his father, at age 86, still comes into the dealerships.

McEleney is married and has two grown children, who represent the fourth generation of the family business. The group consists of McEleney Autocenter, Inc., in Clinton, IA, and McEleney Autoplex, Inc., in Iowa City, selling Buick, Cadillac, Chevrolet, Toyota, Scion, GMC, Pontiac and Hyundai brands.

After graduating from the University of Notre Dame in 1973, McEleney worked in the dealership as a sales consultant and body shop estimator. He got involved with NADA about seven years ago, although he has been to every convention since 1976. He’s been part of the association’s leadership for the past five years.

Although Iowa has not experienced the credit issues hurting other parts of the country, McEleney’s stores have felt the pressure. Sales at the Clinton store were up through September, but have fallen 22% in the last three months. “That was a shock to the system,” he says. Yet, he still has not laid anyone off.

The stores have cut back on advertising by a third and are focusing more on digital marketing. They also have worked hard at keeping days’ supply down to 50 or 60 units.

McEleney is a quiet man who chooses his words carefully and doesn’t always let on to what he is thinking. Outgoing Chairman Annette Sykora says he will be a force to be reckoned with, and that it would be a mistake to underestimate the man. He’s been great as vice-chairman,” she says.

McEleney has served on various dealer councils, including a stint as the chairman of the Pontiac National Dealer Council, and is a past chairman of the Iowa Automobile Dealers Assn.

He’s also active in the community, serving on civic boards: He is trustee and vice chairman of Mount St. Clare College; director of Citizen’s First Bank; director of Paul B. Sharar Foundation of Clinton Community College; and past president of the Clinton Rotary Club.

In addition to electing McEleney as chairman for 2009, the NADA board of directors also elected Edward C. Tonkin as vice chairman. Tonkin is vice president of Ron Tonkin Dealerships in Portland, OR.

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