Tonkin's tenure at NADA, and after
Here’s a review of Ron Tonkin’s tenure as NADA head, and afterward.
After beating out three other dealers for the job, Ron Tonkin takes charge at NADA's convention in New Orleans. His speech rails against fleet subsidies and other automaker programs that, he says, hurt dealer profits.
Tonkin lists 205 dealers as his Rough Riders, a group of large-volume dealers who will stand united with NADA in urging factories to change their ways.
Several dealers named as Rough Riders, led by Roger Penske of Penske Automotive, say they either never agreed to join, don't want to participate or want to know more before joining the effort.
Tonkin distributes a cassette tape to dealers in which he discusses suing carmakers that sell to leasing companies in competition with franchised dealers.
In its first meeting, the Rough Riders steering committee sets its top priority: halting the factory practice of subsidizing fleet sales to vehicle leasing and rental companies.
Tonkin begins a 23-city tour, meeting small groups of dealers, journalists and local radio talk shows to get his message out: Dealers are the good guys, suffering at the hands of the automakers.
NADA, together with First Boston, considers creating a $2 billion finance company that would supply retail and wholesale financing for dealers.
The Rough Riders allege that factory-to-consumer rebates are contributing to "a nationwide decline in dealership profitability."
Tonkin warns that NADA could withhold its lobbying clout on issues crucial to carmakers unless the manufacturers make concessions on fleet subsidies and other practices that hurt dealership profits.
In an ad that runs in industry magazines, Tonkin urges dealers to slash their new-vehicle inventories to a 15-30 day supply to boost their profits, and calls for an end to mandatory advertising associations.
Tonkin kills plan for NADA-backed finance company.
Tonkin titles his Automotive News World Congress speech "Quit Screwing Your Dealers."
In his departing NADA speech, Tonkin -- his Rough Riders having grown to about 2,000 dealers -- reveals he has carried out his yearlong threat and sued the Detroit 3 and a slew of daily rental companies over fleet subsidies. He receives a standing ovation.
Robert Baker resigns as president of the Rough Rider steering committee, and the group quietly dissolves.
Tonkin drops his lawsuit against the Detroit 3 and rental companies, saying the automakers' 1991 fleet programs show significant enough progress on the issue of vehicle buybacks. The Detroit 3 had committed to buying back all retired rental-fleet vehicles and making them available to dealers.
The Justice Department begins a 16-month investigation into alleged antitrust activities by NADA and its presidents dating back to Tonkin's letter urging dealers to trim their inventories. In September 1995, NADA agreed to a settlement in which it promised not to engage in antitrust activities and agreed to 10 years of Justice Department monitoring, but admitted no wrongdoing.