NADA moves to counter franchise system critics

NADA's Welch: "We're tired of criticism."
TESLA V. DEALERS
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WASHINGTON -- Franchised car dealers have taken plenty of heat for their resistance to Tesla Motors' state-by-state campaign to sell cars directly to consumers.

The dealers have been called monopolists, middlemen and dinosaurs. They've been accused of using their clout in state legislatures to pad their profits.

Peter Welch, president of the National Automobile Dealers Association, is ready to push back.

"We're tired of being called backwards protectionists that don't know how to sell cars on the Internet and add hassle to the buying experience," Welch told Automotive News. "It's exactly the opposite."

In one of his most aggressive moves since his 2013 hiring, Welch is launching a communications strategy this week to treat the franchise fight more like a national political campaign. NADA still won't comment on state debates or confront Tesla, but it plans to rapidly spin out talking points and comments to influential journalists and policy experts -- many of whom are questioning why franchise laws exist.

"It's going to take several forms, and it's going to go on forever as long as I'm president of NADA," Welch said of the campaign. "We've got a great story to tell, and I don't think it's been told as articulately as it should have been in the past."

As part of the push, NADA is launching a page on its Web site (nada.org/getthefacts) with fact sheets and animated videos about the franchise model. NADA has no plans to buy advertising, but there's a 30-second video that's suitable for TV, and Welch said state and local dealer groups would be welcome to air it.

Automotive consultant Maryann Keller will release an NADA-commissioned report Tuesday, June 17, on the franchise model, and NADA will release its own report Wednesday, June 18, to argue that manufacturers prefer franchised dealers.

Getting out the message will be Jonathan Collegio, a battle-tested spokesman that Welch hired this spring from American Crossroads, a Karl Rove-founded Republican political action committee that spent $105 million during the 2012 election cycle.

Collegio, 37, said that much of his strategy will be simple "blocking and tackling." His team will find all reporters who have written about the franchise model in the past year and contact them to get out NADA's new message.

Until recently, NADA avoided scrapping with Tesla and franchise-law critics to avoid a political turf war. Franchise laws are set at the state level, and Welch says state dealer associations would object to having NADA, a national group, intervene.

But the debate's center of gravity is edging toward Washington. In April, three members of the Federal Trade Commission wrote a blog post saying state laws preventing manufacturers such as Tesla from owning and operating dealerships are "bad policy."

Said Welch: "It started out as truly a state issue. It has now morphed into something much larger than that. We think it's time to respond."

You can reach Gabe Nelson at gnelson@crain.com.


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