Paul Holloway, president of Dreher-Holloway Inc. in Exeter, N.H., intends to stimulate dealership employees through high-tech seminars.
The incoming president of the National Automobile Dealers Association believes that dealers must be educated today in order to survive tomorrow. He says dealerships are heavily regulated, complex businesses that require a boss who has been to school. Active in local politics, he intends to push NADA's legislative agenda through Congress. Automotive News Staff Reporter Donna Harris interviewed Holloway on his goals for 1998.
Being from New Hampshire, you have said that politics is your business. You also have been fairly active in local politics. What is at the top of your political agenda for NADA?
A title branding bill has to be passed. We ran out of time, but the issue should come up in early February. I think we will get it passed. It is really a consumer protection bill. It requires disclosure when a car is totaled or rebuilt. That's a bill that should pass.
What difference should it make to NADA members to have a president from New Hampshire?
I don't think it will hurt. We are consumed with politics here. Every president since Jimmy Carter has come by my dealership to shake hands. Jimmy Carter came by with his Peanut Brigade, kids from Georgia handing out peanuts. Bill Clinton came by. That was when everyone thought George Bush was going to walk away with the presidency.
People here are not awed by politicians. They see them all the time. We see them when they are candidates and nobody really knows them anyway. Presidential candidates probably visit a hundred dealers in New Hampshire. They come to our cocktail parties. Politicians are no different from you or me. The problem you have is getting past the staff.
So you are able to get past the staff and pull some strings?
I think being from New Hampshire helped a lot in the case of the luxury tax repeal. A lot of people had given up. They said it couldn't get done. But about a dozen people hung in together on this and made it work.
We were able to get the ear of Senator Dole. He made a commitment that he lived up to. I don't think we could ever have won without Dole. Dole was indispensable. I was involved with the effort.
We also got Newt Gingrich to speak at the NADA Washington Conference. Without the New Hampshire connection, he would never have been there.
Like former president George Bush, you have said you want to be remembered as the 'education president.' Why are you such a strong believer in education?
It was preached to me as a child. It was my ticket out of poverty. We didn't have a car until I was in eighth grade. My mother worked at a school cafeteria. My father worked at an oil refinery in the research department. He was a bright guy who got caught up in the Depression and did not have the opportunity to go to college. My father had a high school education, and my mother had an eighth-grade education.
Life was always a struggle. I went to college on a football scholarship. I was drafted by teams in the American Football League and National Football League. It was my dream to play pro ball. That was what I thought I would do until I met my wife.
My wife really made me zero in on what was important. It was important for me to get my degree and get started on a career. I was never sorry.
Why is dealership education so critical?
Attracting good, qualified employees is an ongoing problem in this industry. In our state, we've taken vocational-technical schools and partnered them with different manufacturers. We are looking to train people to come out with at least associate degrees. We need that today. We need those kinds of people in our industry.
In addition to recruiting and training employees, what are the greatest challenges NADA members face today?
There are a lot of them. You have this ongoing issue with the public chains buying dealerships and the manufacturers trying to reorganize their distribution systems or realign their dealerships. There are just plain too many dealers in the wrong places. The uneasiness that this creates in the industry and among the dealer body is really zapping all the energy that should be going into selling cars and trucks.
Another concern is the shifting of emphasis from selling cars to selling trucks. This is becoming an environmental issue.
We also need, in cooperation with the manufacturers, to come up with exit strategies. You just can't allow people who are third- and fourth-generation dealers to sit in a small community and just die. It's not a very dignified way to leave this business.
From the regulatory side, the global warming agreements are an overriding concern to the entire industry. And airbags might become a problem. So we have a lot of challenges facing us.
What concerns do you have about airbags now that the federal government has written rules on disconnects and on/off switches?
I think there is a lot of concern about the extended liability that goes with that automobile five or six years from now if something happens to the third or fourth owner and the dealer has disconnected the airbag.
There is also a dealer complaint problem. The dealer makes a business decision that he does not want to dismantle the airbags. That can lead to an unhappy customer.
For the customer who wants disconnected airbags, it is an emotional decision. This is the kind of issue the dealer faces every day.
You mention automakers' attempts to shrink and realign the dealer population as a concern, that this is disrupting the business of selling cars.
I believe dealers are consumed by mistrust and dissatisfaction.
The automakers think they are communicating with dealers, but they really are not. They think they can tell a dealer about something that affects his business three or four days after it appears in the press. That doesn't build trust or confidence.
The rumor mills will kill everybody.
It doesn't seem we really sit down and work out solutions to problems with the factories anymore, and I think it affects sales. It is having an adverse effect on all our businesses.
How did the trust disintegrate?
A series of things broke down trust. There has been a period of take-aways, when automakers have transferred some of their overhead to the dealers.
There has been a lack of candor on the part of certain manufacturers. When I worked for GM, dealers knew that when I said I would do something, I would do it. Or I would come back and tell them why I couldn't do it. I never lied to them.
You are a former district manager for Buick. How do you think this could help you improve industry relations?
You understand the process a lot better. You understand how decisions are made and how they feel (at the factory) about dealers in general. The dealers would give me a hard time over a lot of things. In those days, district managers sold parts, and dealers did not want to pay the price of the parts I was selling. We had more cars than the dealers wanted to buy. But there was always an answer. You have to work hard enough and think long enough about it. We were always able to work things out. One thing I found about dealers is that when given a challenge, they will rise to the occasion.
Was it the growing mistrust that led you to leave the factory and become a dealer?
We had moved quite a bit. When I moved, it was very easy on me. I would know some people, and I quickly met dealers.
It was an interesting job, working for the factory. But it was very difficult for my wife. Every time we moved into a new community, she would have to find a new doctor and a new dentist and a new church and a new pediatrician. And then we would have to move again.
I had been told my next move would be New York City, and we decided that wasn't where we wanted to live.
I remembered Exeter, N.H., as a nice place to live. And I was able to strike a deal with Mr. Dreher (Gerald Dreher, a Buick-Pontiac dealer in Exeter). We paid $30,000 for the dealership. My wife and I had to sell our furniture to come up with the $6,000 down payment. I loved it. I was still dealing with dealers all the time.
You understand factory relations and politics, yet your emphasis remains education.
We really have to do a better job of educating and providing more opportunities for training. We need to see outside the box how we're going to get more information quickly to our dealer body and be of better service to them.
We used to have these training sessions where we would send people out across the country to major metro markets for classes on, for example, used-car merchandising.
Today, we have the technology available to do that either over the Internet or by satellite communications. We have to do more of that. We have to deliver more information, be quicker to educate our dealers. We do not have to depend on classrooms.
For example, NADA did a teleconference on the LIFO tax settlement with IRS. It was a two-hour conference for $79 (per participant). It was very economical.
Before you deliver information using high technology, you have to have receptive students. Are dealers open to making use of technology?
We had so many dealers interested in the LIFO teleconference, we had to advertise a second one. That was completely full. We also did a third one. Dealers want to know what's happening from the experts.
One of our problems with seminars a couple of years ago was we didn't have enough seats. This year, I would expect to see NADA try to do some training over the Internet.
What percentage of your membership do you feel would be ready to receive the information over the Internet?
More than you might think - especially those of us who have younger people in the dealership. When it comes to this generation that is coming up now, you can't give them enough information. They want to know; they want to be trained.
But how are the dealer principals responding to technology? Are they making full use of their computers?
The dealers from my era are computer-phobic. They try to ignore the importance of computers, and you can't ignore it. It is part of everyday work. It frustrates me sometimes. I am always yelling for help on the computer, but you just have to attack it.
If you are going to be in this business, you are going to have to get computer-literate. If you are not willing to do that, you are going to fall behind.
Dealers have to upgrade their computer systems every four to five years if they want to be on top. You just have to do it.
All the dealerships are linked to my office at home, and I can sit there Sunday and watch a football game and review what happened at each dealership. It is a great tool for us. It saves a lot of time.
What is NADA doing to help dealers get over their computer phobia?
We have a computer task force that is helping educate dealers. The computer task force also is going to try to show the things that a dealer can do with his computer system. I probably don't use my computer system to 100 percent capacity. We have to come up with a way that we can get dealers to understand what they have and how computers can work for them.
For many dealerships, computer vendor contracts are going to expire in the next few years. What is NADA doing to help dealers do some comparison shopping?
A checklist is something we've talked about to help dealers buy computers.
The computer task force also is making an effort to increase the number of computer vendors that are certified by the manufacturers. What's happened recently is that General Motors has approved nine computer vendors (instead of two) for dealerships.
Some of the new ones are PC-based systems, which is a dramatic change from the systems that most dealerships have today. This is forcing other suppliers to accelerate introduction of PC-based systems.
