As 2003 chairman of the National Automobile Dealers Association, Alan Starling, president of Holiday Chevrolet in St. Cloud, Fla., took on Public Citizen and "Dateline NBC'' over allegations that many dealerships defraud customers. He also went toe-to-toe with survey expert Dave Power over Power's views on the inefficiencies of the franchise system. Executive Editor Edward Lapham spoke with Starling last month about his year of stewardship.
Do you think the J.D. Power flap is pretty much over?
I think so. My view is that he (J.D. Power III, CEO of J.D. Power and Associates) made a mistake. We represented our constituency, and clearly he knows that we think his position isn't right. I don't think he's changing his position.
Will there be board action? A resolution?
Not that I know of. The board was glad that we were on top of the situation and that we made sure that dealers were directed to those stories.
At the convention last year you talked about a three-part fairness doctrine. The first part is fairness in factory/dealer relations, and it appears that your campaign to get manufacturers to reconsider how they measure customer satisfaction and what they do with customer satisfaction data is part of that. How are you doing with the campaign?
We're doing real well. You come into a job like this expecting one thing, and you find out we haven't hit a home run, but we've really advanced the runners. Not every manufacturer looked at our report (on the flaws in the customer satisfaction process, which was the result of a two-day forum with dealers of all sizes) and embraced it, but most of them did.
What will they do about it?
In almost every case, they are going to sit down with their leading dealer group, the dealer council. They also are going to do some research from their side of the ledger. What we said to them is, "You've made these great strides in product quality since 1981, 1982; the cars aren't anywhere close, they are so much better." But that whole CSI process hadn't changed much. One manufacturer looked at us and said, "You're doing exactly what we need; we need somebody like you to tell us where to make changes."
Will NADA's industry relations staff help each of these dealer councils?
What we have done is provide them some framework. CSI is a competitive issue. If you do this thing right, if a company figures out how not to intrude on customers' privacy, how to measure dissatisfaction and then communicate to the dealers so they can fix it, that is a competitive advantage. We have a lot of good ideas and try to share those ideas with them in our meetings.
You will have had 12 meetings with automakers by the end of the year.
Right. One meeting with Ford with all of their brands, and one meeting with GM includes their brands, and so on. It's pretty far-reaching and has been a heck of an effort.
Part 2 of the fairness doctrine is fairness in dealer/customer relations. Some of that involves NADA's revised code of ethics. How many dealers are on board?
I've been to probably 20 some odd state conventions, and almost 50 percent of those have had a code of ethics signing. It is catching on.
Part 3 of the fairness doctrine was fairness to people trying to get into the business, meaning diversity and bringing people into the dealerships and training them. That was a lofty goal. What progress have you made this year?
I think we made some, but it is a tough one because it's not as measurable. We have almost 1.2 million people working in dealerships, and a great question to ask a dealer is "Who is the most important person in your dealership?" The most important person in your dealership at any time is probably the person talking to the customer. So in a dealership like mine, for example, with a heavy Hispanic influence, I have to recruit people who are bilingual. It helps everybody. We dealers ought to embrace this thing.
As managers, too? Taking employees and managers and moving them along?
Yes. That is where the next dealers will come from. It is hard to take a guy who ran a McDonald's successfully and tomorrow make him a Buick dealer, but that is what manufacturers have done in some cases. Manufacturers have done all kinds of things, but the most successful way to do this is to go to dealerships. They have the future dealers working in dealerships right now.
But doesn't that cross the line of fairness doctrine Part 1 if there is a factory saying you need to hire more blacks or more Hispanics?
They are not going to tell me who to hire, but I can tell them whom I've hired. It's a fine point, maybe, but you can just say, "I want you to meet this guy. Let's go have lunch with this guy, find out what he wants to do in his career.''
Diversity was a goal under your administration. But didn't you eliminate one of your committees that was looking at diversity?
It wasn't a committee; it was an ad hoc task force group that looked for ways to mainstream diversity within the organization. I took the people from that group and put them on committees in NADA.
Larry Brown, the head of our industry relations committee, is an African-American dealer. I said, "Larry, I want you to be in charge of dealership operations, and I'd like you to take some of what we learned from this diversity group and figure out how we get more minorities to come to the dealer academy. How do we get more minorities to join 20 groups? How do we get more minorities to run for board of directors at NADA?" He has done a great job.
We had a meeting here in August where we brought in successful minority dealers. We brought in a woman, a couple of African-American dealers, a couple of Hispanic dealers. We have invited all of the manufacturers to send their top people who are interested in diversity.
The guys that had come up through the ranks as parts managers or service managers told how they got an opportunity to be a dealer, what hurt their chances of being successful and what helped. Almost unanimously they said they didn't know how to read a financial statement when they became dealers. So we went back to the drawing board, put that into a class.
In almost every speech I have given, I have talked about how important this is. That has made an impact. People have come up to me after the meeting and said, "Alan, you're right. Maybe I didn't want the manufacturer coming in and talking to me about my career path for my parts manager. But maybe that is the right thing to do."
I have tried to use the bully pulpit and say that customers who come into our stores really want to see a more diverse dealership. It has got to be difficult for a single woman, for example, to come into a dealership and not see another woman in the whole process.
I think just the fact that I made that speech at the convention helped because I got e-mails from people. I also have spoken to the dealership academy. These are all the future dealers. About half of them are sons or daughters of dealers, but the other half are people who have worked their way up from car porters and technicians. Every time I have done it, I have had somebody in the crowd who is African-American, Hispanic or a woman say, "Mr. Starling, we really appreciate what you are trying to do to move our needle."
What's going on with the standards for technology and automotive retailing initiative to commonize the hardware and software for accounting systems and reporting systems?
We are making progress, but it is painfully slow.
Of what single thing in this past year are you most proud?
It would be that we listened to our members extremely well. Take the CSI issue, for example. We took their concerns. We didn't just run off in a huff and start complaining about it. We studied the issue. We brought in some outside counsel. They agreed with what the evidence was. In a short time, we put together a position paper and delivered it to the manufacturers.
Some of them said, We're not even paying attention to it. And I said, Yeah, that's the problem. Put some attention on it and we think you can do it better than you've been doing it. And, again, we're not out to end it; we want to fix it. I think that is probably what I am most proud of.
We've been able to communicate a lot better with our members.
Issues involving government. For example, when we have our Washington conference, even though only about 400 or 500 dealers come, almost all the dealers hear about the issues and who we're meeting with. We've been so engaged with the government.
We've been working with the National Highway Traffic Safety Administration this year on primary seat belt law enforcement and have been able to communicate to the ATAEs (Automotive Trade Association Executives members), to the board members and to the dealers at large in certain states about what could happen. In Florida, for example, if Florida would adopt a primary seat belt law usage would go up about 11 percent and fatalities would go down about 5 or 6 percent.
I'm really proud of this safety initiative, too, because that is such a logical thing. Our whole business model is built on selling you not just one car, but over time selling you a car, selling your family a car. When that car wears out, selling you another car. By showing you that we are so interested in you we want to make sure that you know how to secure your belts and how to keep the grandchildren safe in the back seat. It makes sense because people listen to us.