The campaign to reinstate dealerships rejected when Chrysler and General Motors restructured has split auto dealers into two bitterly divided camps: those who lost stores and those who didn't.
The result: A simmering dispute within the National Automobile Dealers Association that has board members bickering and angry members questioning whether NADA can aggressively represent all the nation's dealers — especially if any of the 63 board members benefit from the dealership closures.
At the center of the squabble is Tammy Darvish, NADA's director from metro Washington, D.C. Darvish, who is new to the board, contends NADA can't represent the rejected dealers because at least one dealer on the board is benefiting from the misery of others.
In many ways, the turmoil is unprecedented for NADA and the industry. Never before have two automakers fled to Bankruptcy Court — and succeeded in effectively wiping out the state franchise protections that traditionally have given dealers like Darvish much of their clout.
That has put Darvish and NADA in the middle of an effort to get Congress to overrule both automakers and reverse store closings.
Darvish is vice president of her family's Darcars Automotive Group in Silver Spring, Md., which sold 17,984 new and 10,242 used vehicles last year at 21 dealerships. In 2008, Darcars ranked 19th on the Automotive News list of the top 125 U.S. dealerships groups.
Darcars lost two Chrysler franchises when Chrysler eliminated 789 dealerships in Chapter 11.
As an example of a conflict of interest, Darvish notes that Stephen Wade, the NADA director from Utah, is taking over the franchise of longtime Chrysler dealer Patrick Painter. Painter also was rejected in the reorganization.
"NADA cannot favor one constituency at the expense of another and purport to speak objectively when it is conflicted," Darvish wrote in an Aug. 8 letter to NADA President Phil Brady. Automotive News obtained a copy of the letter.
Darvish says the independent Committee to Restore Dealer Rights should represent the rejected dealers in negotiations with automakers and the government. Darvish is one of the leaders of that committee, which was formed in May to spearhead federal legislation to reverse the store closings.
John McEleney, NADA's chairman, says that the Committee to Restore Dealer Rights represents only a small group of dealers, and NADA has a better chance of striking a workable deal to help dealers who lost franchises.
McEleney says Darvish owes Wade an apology as a "respected" leader.
Wade, who sells Chevrolet, Cadillac, Nissan, Honda and Mazda in a market with fewer than 80,000 people, confirms that he has a letter of intent from Chrysler. He says Chrysler initiated the transaction and had several applicants for the location.
"If not me, it would have been someone else," says Wade, who said he has tried to work with Painter disposing of vehicle and parts inventories. "I didn't want it to go to any of my competitors," Wade says.
Ed Tonkin, the NADA director from Oregon, attacked Darvish in an e-mail copied to the entire NADA board and obtained by Automotive News. Tonkin, who will succeed McEleney as NADA chairman in 2010, criticized Darvish as misguided and self-important. Tonkin also demanded an apology for Wade.
"I am also afraid that your dogmatic approach to the reinstatement issue and failure to read the tea leaves may hurt your efforts," Tonkin wrote.