Dealers run for Congress, some due to rejection

The turning point for Mike Kelly came last spring when a General Motors Co. regional manager called, asking the longtime Pennsylvania dealer whether he wanted to be part of the new GM.

"What do you mean?" Kelly asked. He was informed that his Chevrolet business would survive but that GM intended to dump Kelly's Cadillac store come 2010.

The news put Kelly on a path that led the former Notre Dame football player and dealer's son to run for a seat in the U.S. House of Representatives.

"I'm angry, and I'm disappointed that people who have known us for many, many years could think so little of us," Kelly said of GM's rejection, which he appealed through arbitration. "It's not right -- I don't cost them a penny."

In early March, Kelly got one of GM's reinstatement offers. He now will be able to keep his Cadillac business, but Kelly still is running for Congress.

He began thinking seriously about a run last August. Worried about slow cash-for-clunkers reimbursements, Kelly said he had trouble getting help from his U.S. representative's office.

"What frustrated me most of all was the lack of understanding of how important cash is to our business," said Kelly, who also has Hyundai and Kia franchises in Butler, Pa. He's now running against that Democratic incumbent.

Kelly, 61, is one of at least five car dealers running for Congress in 2010. They join three former dealers already in the House and running for re-election.

Three of the new dealer candidates had stores rejected by GM or Chrysler Group during the automakers' 2009 bankruptcy restructuring. Another rejected dealer, Colleen McDonald, is running for the state Senate in Michigan.

The dealers have varied stories behind their entry into politics. But there are some common themes: All are Republicans. All want smaller government and a balanced budget. And all said they have been influenced by the unprecedented government involvement in the auto industry over the past 18 months.

"What happened to the car industry was clearly one of the darkest days in American capitalism," said Jim Renacci, who is running in Ohio's 16th District. He is majority owner of Renacci-Doraty Chevrolet in Wadsworth, Ohio.

Renacci bought the dealership in 2007 when he was mayor of Wadsworth. With the store's owner about to go to prison for money laundering, the store faced closure. Renacci and a minority partner stepped in.

They have worked to get the dealership's finances back on track but still landed on GM's dealership closure list in 2009.

Renacci, 51, also is pursuing arbitration. As of last week he had not received a reinstatement notice from GM.

Renacci, an accountant by training, grew up in a coal and steel town in western Pennsylvania and was the first person in his family to graduate from college. He moved to Ohio at age 24 with $200 in his pocket and started a nursing home business.

He eventually had interests in multiple businesses, including a construction company and the Arena Football League team in Columbus.

Another self-made dealer is running in Ohio's 13th District. Tom Ganley, 67, a franchised dealer who owns 29 stores, said he wants to take an entrepreneur's approach to cost control and job creation to Washington. Three of Ganley's Chrysler stores were rejected.

A year ago, Colleen McDonald was running three stores in metro Detroit. Today, her two Chrysler Group stores and GM store are closed, targets of the dealership rejections.

After getting involved in the Committee to Restore Dealer Rights' grass-roots campaign to reinstate dealerships, McDonald began thinking more about politics. In February, she announced her bid for the Michigan Senate.

"I can take what I've learned as a business owner for 26 years and apply it to running Michigan," said McDonald, 44.

She began working at her father's dealerships out of school and became a dealer at the family's Chevrolet store at age 30. After she got GM's rejection letter, she voluntarily resigned the Chevy store before the automaker went into bankruptcy. That way, GM had to buy back her inventory, McDonald said.

She seeks to reinstate her two Chrysler Group stores in arbitration.

The two other dealer challengers for Congress -- Scott Rigell, running in Virginia's 2nd District, and Bob Thomas, running in Indiana's 3rd District -- were untouched by the dealership rejections. But both expressed concern.

"I'm a community businessman who feels all the heat," said Thomas, 59, who owns Ford and Lincoln-Mercury stores in Indiana and West Virginia. "I'm concerned about having worked my whole life for my family and my children and then have it all be squandered by the dumb mistakes made in Washington now."

Thomas, whose district is home to a large GM truck plant, is challenging the incumbent Republican there.

He started selling cars after college; his first job was working in Bethesda, Md., for Jack Fitzgerald, who later was one of the founders of the Committee to Restore Dealer Rights. In 1980, Thomas moved to Indiana to buy a Lincoln-Mercury store through Ford Motor Co.'s dealer development program. Within 18 months, he bought out Ford's stake, he said.

Rigell, 49, said he decided to run after being approached by the former Republican holder of his district's congressional seat, who was defeated in 2008 when President Barack Obama and many other Democrats were swept into office. Rigell said no at first, concerned about the distraction from his dealerships during tough economic times.

But after further reflection and conversation with his wife, Teri, Rigell got into the race.

A former Marine who grew up in Florida, Rigell moved to Virginia for graduate school. He began working for a dealership and eventually bought his own. He now owns Ford, Lincoln-Mercury and Volvo stores.

Having run his own business for almost 20 years, Rigell said he wants to bring the fiscal accountability he has learned as a dealer to Washington. Worried about a downturn, he said he starting cutting expenses at his dealerships in 2007, using attrition to trim head count.

"I wouldn't be running if our business wasn't in a good position. All three stores were modestly profitable last year," Rigell said. "I think we need to get our spending under control at a national level."

The National Automobile Dealers Association said it can't say that dealers running for office is a trend. The numbers are just too low, said NADA spokesman David Hyatt.

But U.S. Rep. John Campbell, a former California dealer who has been in Congress since 2005, said the five challengers make up the largest number of dealer candidates for Congress he can remember seeing.

"Car dealers in general are among the most entrepreneurial, independent-minded people that I know, and what I think they have seen of late is tremendous government involvement in their business," said Campbell, also a Republican. Dealers feel threatened, he said, and "it's not surprising to me that this is happening."

Campbell said he intends to reach out to the dealer candidates to wish them luck and share any helpful experiences.

His only bit of advice? You can't be a hands-on dealer and a hands-on legislator at the same time.

"As consuming a job as running a car dealership is, it's more consuming to be a member of Congress," Campbell said.

"If you really want to make change? This is going to take a lot of their time, a huge share of mind, and they should be prepared to have somebody else running the business, one way or another."

Arlena Sawyers contributed to this report