The first-ever virtual NADA Show kicked off on February 9, offering an online experience packed with speaker presentations, education and workshops sessions, and franchise dealer meetings, and all while running parallel with the expo.
Outgoing National Automobile Dealers Association (NADA) Chairman, Rhett Ricart, was the first to take the virtual stage, praising dealers for getting through a tumultuous 2020 and coming out “stronger, tougher and wiser.” He said there was no playbook for the challenges dealers faced, and continue to face, amid the COVID-19 pandemic, and that the association worked hard and quickly to help ensure auto retailers had a franchise that remained valuable and protected.
“This association has never fought harder, worked faster, or given so much of itself so that business owners, like you and me, had a franchise that remained valuable and protected,” said Ricart.
He took over as NADA chairman at the 2020 NADA Show in Las Vegas, Nevada in February 2020, less than a month before the pandemic began impacting auto retailers in the country. During his final remarks to dealers as chairman of the association, Ricart urged retailers to remain vigilant and confident in their ability to thrive in the face of adversity, while reiterating his belief that the challenges faced in 2020 will leave dealers better positioned for success in 2021 and beyond.
“Never forget what we went through, because it shaped who we are today,” said Ricart.
He also welcomed actor and producer Mark Wahlberg and Jay Feldman of Feldman Automotive Group to the virtual stage to explore their partnership and growing franchise. In 2018, Wahlberg partnered with Feldman to open Mark Wahlberg Chevrolet in Columbus, Ohio, and has since opened other stores. His franchises include Chevrolet and Buick-GMC.
Talking about his experience getting into the auto retail business, Wahlberg said he has always been a big car fanatic. His father was also a Teamster (of the International Brotherhood of Teamsters or IBT), and he knew Feldman was involved in the car business.
“Jay’s a real serious adult in the space and he’s been great at kind of teaching the business from the entry-level up until where we are today, with four stores,” said Wahlberg.
Feldman also chimed in about how quickly things progressed from a business perspective, the quality of his partnership with Wahlberg, and how that helped them take on more than one store. He said Wahlberg continuously aspired to improve. “You’re (aspiring) to get better all the time, and you’re doing it in the automobile business — aspiring to be better every day, very quickly,” said Feldman.
He also talked about his family’s involvement with a children’s hospital in the community and a recent project he and Wahlberg worked on when the pandemic first took root in North America. Wahlberg said they provided around 1,000 iPads to families in their community to be able to communicate with their loved ones while in the hospital. He said there were children with COVID-19 that could not receive the same amount of visitors or visiting hours that were in place pre-pandemic.
“Obviously for us, it’s important to give back to the community, help out in any way that we can, anywhere we are in the community. We want to be a part of the community,” said Wahlberg, later adding that “We want to make sure that we’re staying connected to people who are on the front lines. People who are really at risk and doing the real work and being the real heroes out there — our service men and women, hospital workers, first responders, all that sort of thing.”
Bob Woodward on Biden presidency, pomposity and transparency
The NADA Show launched day two of its event with a conversation between 2020 NADA Chairman Rhett Ricart and veteran journalist Bob Woodward that, at the core, reflected on trust and transparency as they discussed the political environment in the United States.
The conversation started with a general overview of the change in U.S. administration from Donald Trump to Joe Biden, who has been in the Senate since the 1970s. Asked what to expect from his team and style as president, Woodward said Biden was a chief negotiator on some of the economic issues for the Obama administration and that he had a mixed record. He also had an anecdote about how to manage negotiations.
“Biden had this theory, which is very interesting, on how you negotiate,” said Woodward. “When Obama gave him the assignments to work out the budget with the Republicans, Biden invited all the Republican leaders to Blair House across from the White House for breakfast. And the Biden theory was you have to talk to people and negotiate for hours and hours, and you need to get them off their talking points.”
Woodward said he asked Biden if his many breakfast invitations extended to lunch, and if he had success with this tactic. The answer is that he had some success, as the moment people shift from their talking points it becomes easier to see where the areas of compromise are. However, there were times where the tactic was “kind of an ailment” when no real progress was made. Still, it speaks to an approach to try to move things forward.
Biden also ran his campaign as something of a centrist and on unity in the months leading up to the U.S. federal election. But he has also taken policy steps that may appear too liberal for some Republicans. Asked about this, Woodward said he is currently working with a colleague at the Washington post to figure out what Biden is all about.
“Simple answers don’t work with politicians. You really have to spend some time and that’s what we’re doing. And I think the verdict and the description of how Biden governs is not in yet at all,” said Woodward.
“We’ll measure it issue by issue and whether he can work the Congress, whether he can call everyone in for breakfast and extend that to lunch and get everyone off their talking points, so they’ll find those areas where there can be compromise,” he added.
Woodward said he would be cautious about jumping to conclusions of exactly who Biden is and how he is going to govern.
At 76, Woodward has been working as a journalist for decades; he even worked on the Watergate story during the Nixon presidency. Summing up his experience over the years, Ricart asked him if the country’s current divide in unity, regardless of politics, feels different this time around.
Biden’s challenge to bring people together and find some common ground is precedent, but Woodward said the overall issue is also very emotional. This includes the reaction from other journalists who were upset by Trump’s handling of the media and, to Woodward, may have lost their emotional equilibrium at times.
“Again, this just goes back in history because I’ve done this almost 50 years at The Washington Post,” said Woodward. “I remember Carl Bernstein and I worked on the Watergate story. And after (Richard) Nixon resigned, Katherine Graham, who was the owner/publisher of The Washington Post, wrote Carl and I a personal letter.”
He said the letter was a reminder that they should not think too highly of themselves after Nixon resigned, and offered some advice: beware the demon pomposity.
“A lot of people (who are) successful or think they’re successful fall under the spell of pomposity and smugness and too much self-confidence,” said Woodward.
He said the message from Graham was very wise for everyone in the news business, in politics, on Wall Street and anyone really, as pomposity leads to the notion that there is only one way to look at a situation: “This is the way it is.”
“Hopefully, as we discover in journalism as important, there are always many, many ways to look at things and we need to slow the process down if we can and bleach out the pomposity,” said Woodward.
He also asked Ricart what the biggest route to success is in the auto retail industry, to which he replied resiliency, persistence, staying connected to your community, and being able to retain your best people.
“You have your people, you have your community and your basic values and virtues, and that’s what keeps you perpetuating your business model into the future,” said Ricart. “And if you forfeit one of those, in my belief, you’re going (to) shorten your tenure.”
Woodward also mentioned transparency as an important element and “really telling people what the facts are, what the situation is” — something that sorely lacked from the previous U.S. administration, and which arguably helped feed the divide that the country is feeling today. It is also an element that many automotive retail consumers have been demanding from dealers.
“Sometimes you just don’t know the answer and there’s nothing more refreshing when somebody says, I don’t know the answer to that. I’ll find out,” said Woodward.
Ford CEO Jim Farley talks EVs, emissions, connectivity and data
Ford CEO Jim Farley and 2020 NADA Chairman Rhett Ricart
The future of the automotive industry was also explored on day two of the NADA Show during a conversation between Ford CEO Jim Farley and Rhett Ricart.
The discussion was part of the second main stage presentation on February 10, covering topics from electric vehicles to emissions standards, connectivity and data, and how the industry will change in the coming months.
“First of all, we’re going to be really tight on supply, and the semiconductor shortage is going to make its way through the whole industry,” said Farley, in reference to the semiconductor shortage that has plagued the global auto industry and impacted a number of OEMs. “We don’t know exactly the impact and (it) may be slightly different by manufacturer, but we’re already going into this with low days supply, especially at Ford,” said Farley.
Farley said many dealers have rationalized their costs amid the pandemic, and have become more serious about their online business. He sees a much healthier retail network with new products coming up, but that OEMs (and specifically Ford) will be focusing on quality, manufacturing, and thoughtful allocations.
On the topic of mobility, vehicle subscriptions, autonomy and electric vehicles, Farley said it will take time for society to move to e-mobility and that it will not be done one-hundred per cent.
“We have a lot of rural customers that have a long distance to travel. It’s just, e-mobility won’t work for them,” said Farley. “But in December, in Europe, one out of every 10 retail vehicles sold was a pure electric — not a plugin or a hybrid, but a pure electric.”
He said he expects the United States to put their foot on the scale and really commit to CO2 reduction, particularly as some EVs have reached the 300-mile range, and many products are well-designed and usable for families. Furthermore, the number of available EV models is expected to grow significantly over the years, which means the number of models dealers will be able to sell will grow as customers are provided with greater choice from the EV market.
“There is a lot of pressure because the batteries cost a lot of money, $10,000-$15,000 — that’s extra costs. And we have a lot of work to do to get that cost down,” said Farley. “Emissions for ICE (internal combustion engine) products are getting more expensive too. So at some point they’re going to cross, and it’s just more choice.”
Farley believes the pressures of the auto retail business are changing more than for the OEMs, with online retailing and remote service as two examples, and that it is all happening at the same time. He also said that dealers will figure it out, as they always have during times of change and crisis.
“Just like everyone said, there was no future for brick and mortar retailers when Amazon came out,” said Farley. “Well, Target figured it out. Home Depot figured it out.”
As for vehicle standards, he said Ford does not want to go back to the days when vehicles had to meet different emission standards based on the state or country they were being sold in. Not only is it complicated for dealer trades, it is also a nightmare from a logistics point of view in that it becomes an extra cost — which he said no one really pays for.
“We need one national standard at Ford,” said Farley. “We committed to the California standard last year. It wasn’t so popular with a lot of the politicians at the time, but that’s our values at Ford. And we know we want to be a leader in this change to mobility. We also want the dealers to be part of that journey.”
Farley also talked about Ford Direct: a joint venture between the Ford Motor Company and its franchise dealers to create a comprehensive Web presence for dealers, and to provide digital marketing services that help them sell more vehicles. Strathcom Media was named the official FordDirect Certified Website provider for all Ford and Lincoln dealers in Canada in 2019.
Farley said solutions like these have to work for all dealers as they have different (or multiple) selling systems. Manufacturers, he said, must have a set of tools or a couple of solutions that work for most customers but still provide flexibility for the dealer, due in large part to the way retailers collect, manage and use their data.
2020 NADA Chairman Rhett Ricart said dealers have always been the one to shake the hand of the customer and look them in the eye and thank them for their business while collecting their data.
“So dealers feel very sensitive to our customers and this information they give us, as well as the newer data that the manufacturer is collecting through connectivity, which is here now — it’s not coming next week — and how to put those two together to be able to maximize our customer’s positive experience with that product. And also to be able to maximize our ability to stay in touch with them,” said Ricart.
Farley said that for him, connectivity is the biggest game changer, “because it really rewards all of us to work on loyalty, not this conquest model that a lot of us have worked on.” A lot of dealers, he said, have always figured that loyalty model out, but not every manufacturer understood it.
New NADA chairman targets four areas of improvement
2021 NADA Chairman Paul Walser and 2020 NADA Chairman Rhett Ricart
Rhett Ricart officially handed the reins to Paul Walser of Walser Automotive Group in Minnesota to become the new 2021 NADA chairman on February 11.
Walser discussed the importance for automotive retailers to start with a “clean sheet of paper” this year, and aims to focus on four areas of improvement that will help strengthen the franchise system: the OEM-dealer relationship, diversity, dealer involvement and participation with NADA, and the transition to a new NADA president.
“I want to work very closely with the Alliance of Automotive Innovation and try to share the manufacturer-dealer relationship going forward,” said Walser in a recap of his morning session.
“So if we get together in the room and start to talk about what would we do if we had a clean sheet of paper, what would this relationship look like?” said Walser. “And we can be talking about what the customer really expects, because that’s the main driver for us.”
He said the relationship should not fully be about what the OEMs or dealers want, but rather what their customers are looking for — and how the manufacturers and dealers can work together to strengthen the franchise system by looking at it through the customer lens.
Walser also talked about the importance of figuring out how the industry can adopt a more diverse dealer body. He believes this issue will involve working with other organizations, such as NAMAD (National Association of Minority Auto Dealers) and the Alliance of Automotive Innovation to try to solve the problem at its source.
“Why is it that our efforts to increase minority representation have failed?” said Walser. “To me we have to solve the problem by making sure that we have more people entering our industry. We have to have training that is in place, and we have to have the resources for them to financially own and to be sustainably successful in dealerships.”
He believes that working with other organizations will help the industry find a better path that delivers more sustainable results.
The NADA created its first executive director of external affairs and public policy position in 2020 in an effort to reach out to more diverse crowds.
That position is currently being held by Myra Dandridge. Her focus will be on creating strategic partnerships with professional associations, government agencies, and third party groups. This includes groups like the National Association for the Advancement of Colored People (NAACP) and the League of United Latin American Citizens (LULAC), among others.
She will be educating these groups on the positive impact that franchise dealers have on local communities across the country, as well as the economy at large, since some groups may not be aware of what dealers are offering to help their customers — such as dealer-assisted financing, and how that can impact their members.
2021 NADA Chairman Paul Walser
The last area Walser aims to work on is increasing dealer involvement and engagement with NADA by spreading the message about what the association can do on behalf of dealers in the United States.
Walser said one of his favourite U.S. presidents is James K. Polk, who had four ambitious goals for his one term in office and accomplished them — only to die 90 days later. “I’m going to pattern myself after Mr. Polk, with the exception of the dying 90 days later part,” said Walser.
That last goal was introduced when Walser welcomed the new NADA President, Mike Stanton. He succeeded Peter Welch on Jan. 1, 2021.
Stanton hails from Washington, D.C. where several members of his family were government lobbyists. He said the mission at NADA will remain the same: working on behalf of dealers, strengthening the franchise system, and educating and advocating for dealer interests.
On challenges facing NADA, Stanton said the pandemic will remain the association’s first priority, but working with the OEMs and putting the customer first will be important as well. Proactively educating policymakers and making sure they understand the auto retail business is also on the agenda.
“The value we create for customers, the positive effect that dealers have in their communities and really the economy overall in the United States — the bottom line is that the franchise system is the most competitive and efficient system to sell and service vehicles, and our lawmakers need to understand that.”
The virtual 2021 NADA Show took place between Feb. 9-11, 2021.
2021 TIME Dealer of the Year finalists
Virtual NADA Show closing ceremony
