Larry Kull, president of Burns Kull Automotive Group, of Marlton, N.J., will be the 2014 chairman of the American International Automobile Dealers Association. He follows in the footsteps of his father, Richard, who chaired the group in 2001.
The younger Kull takes over at a pivotal time for AIADA, a lobbying group with members that have about 10,000 import-brand franchises.
International trade has always been the group's bread-and-butter issue. The Obama administration currently is negotiating with Japan and the European Union to get rid of tariffs and regulatory barriers between the United States and those markets. This year AIADA will be busy pushing for free trade deals on both fronts -- and trying to counterbalance the efforts of U.S. automakers such as Ford Motor Co., which argue that Japan has not opened its car market enough to justify the United States' getting rid of its remaining tariffs on imported Japanese vehicles.
AIADA will swear in Kull on Jan. 27 to replace Ohio dealer Jenell Ross, the 2013 chairman. But the ceremony will be bittersweet for Kull; his father died last summer.
Kull, 63, spoke with Staff Reporter Gabe Nelson.
Q: What led you to work with AIADA?
A: All of our sister organizations, like [the National Automobile Dealers Association] and the state associations, play an important role, but what sets AIADA apart is that we represent the interests of the international automobile industry. We have political and economic competitors who often seek help in Washington at our expense, and it's important that we have an organization that's standing watch, making sure that we see what's going on and ensuring that we have a level playing field.
What are your top priorities for 2014?
We're really concerned about making sure the Trans-Pacific Partnership [Pacific Rim free trade deal] and the European trade agreement move forward, and that all of our manufacturers' countries are represented fairly. Of course we will be supporting and pushing for the president to get Trade Promotion Authority. That's really critical to moving these trade agreements forward.
Additionally, and most important, we want to be sure that people who might be swayed by our economic competitors' positions understand our particular contributions to this economy.
There's got to be someone who stands ready to tell our story, so the collective views and political clout of all of our dealers is available when it needs to be. You know, we're always an easy target. Tough choices need to be made, and we want to be sure we're not on the menu.
Who are you referring to when you talk about your "economic competitors"?
There's a domestic manufacturer that has been very critical of Japan's currency policy. I don't represent that manufacturer; I certainly respect their accomplishments, and they've done a lot of really good things. But how is what's going on in Japan any different from the $60 billion a month that the [Federal Reserve] is buying in bonds to keep our interest rates low?
Everybody has an economic policy. That said, we think that tariffs and other rules and regulations are certainly fair game for negotiations. We don't want the United States to get a bad trade deal. We want the United States to get a good trade deal, a fair trade deal.
There's one other thing that I think is really important about international trade. And I don't want to be naive about it. I believe that international trade is our best chance for peace. Countries that do business with one another are just less likely to put up with irrational behavior that threatens the economic livelihood of those countries.
What do you think AIADA can do to have a say in that debate?
The biggest impact we can have is at the grassroots level. We have dealerships in virtually every community in the country. Those dealerships have relationships with elected officials on both sides of the aisle. Many of those officials will be approached by people seeking protectionism and opposing these free trade agreements, and we need to make sure they're hearing the other side of the story. What we have found is when we present a description of our positive impact on the economy, we can generally muster enough support to move reasonable legislation forward.
How do you ensure that you're taking positions that your members support?
An important part of it is keeping the members engaged. One of the things that Jenell Ross, my predecessor, has done a really good job with is working with our management team to develop plans to make sure we talk to our members and find out what is important to them. We've developed a number of internal surveys.
What have you learned?
What we've found so far is that our members are very concerned about government in general. We found that there is a certain apathy. They're frustrated with the results of the recent national elections. They're concerned that their contributions, in terms of the business that they built -- there's a lack of respect for these accomplishments in government.
While a lot of government officials say that they're very supportive of small business, when things are actually put forward for legislation, they don't show that there is an awful lot of respect for local business. In many cases there's a feeling that small businesses are not giving their fair share. I would say, if you asked 100 dealers if they felt they were providing their fair share, most of them would say "yes," they are -- both publicly and privately.
What is AIADA's position on the new fuel economy standards?
We don't see anything wrong with the government setting reasonable standards for clean air or gas mileage. We would just like to see those standards be applied fairly across all companies and be achievable without harming economic progress.
Do the current rules meet those criteria?
The gas mileage standards that are coming up are going to be very challenging for all manufacturers. We're going to be watching the costs associated with those. I would point out that my company sells a number of battery-operated cars, having Chevrolet and Toyota with the Volt and the Prius.
What I would say is if you look at the combination of the government incentives and the manufacturer subsidy -- the money they lose selling these products -- in a lot of cases they're offering these products strictly because the penalties would exceed their costs. A lot of times the government can pick a loser when it chooses a technology.
Nearly all of the U.S. assembly plants run by international brands are nonunion, though the UAW is still trying to organize them. Where does AIADA stand?
I think we will continue to see people who will pursue various rules, which include trying to make it easier to organize the international manufacturing plants. We recognize that the workers have a right to decide what they want to do, but have opposed in the past card-check legislation that made it easier to organize without giving each worker a right to vote on representation.
Tell me about the business you've built. How are your stores doing?
Each franchise has its own challenges. Obviously, two years ago our domestic stores were challenged heavily, but last year Buick and GMC both grew at greater than the industry average.
On the international brand side, the growth of the Subaru business has been outstanding and unbelievable. I think the recovery of Toyota after having been in my view politically attacked during the recall crisis has been outstanding. The steady market leadership of Honda with their products has been terrific.
Our Korean franchises, both Kia and Hyundai, have grown tremendously, though last year neither one of them had great growth years, which in part I think was based upon their capacity. Their sales had reached their ability to build cars for a period of time, so they pulled back their marketing efforts from previous levels. I'll be curious to see how they do with that in future years.
You think Toyota was politically targeted during the unintended acceleration crisis?
You know, I was on the national Toyota dealer council and eventually became dealer council chairman right around the recall. I wasn't the chairman when the recalls were announced. We were talking about hundreds of dealers who had never seen one of these things. I mean, hundreds!
I'm not saying this stuff doesn't happen with all manufacturers. And I'm not saying that the changes that came out of this, like brake override and technology assisted driving, aren't going to benefit consumers in the long run. I just know the attacks on Toyota were politically based and economically based.
Do you worry other international brands could be treated in that way?
I'm not worried about it -- I'm certain of it. There are people who are involved in regulatory and governmental positions who, playing to their base, will lend whatever support they can to provide assistance to their economic benefactors. This is just the way of the world. We have to be careful. We have to be watchful of it.
Do you think American car buyers still care whether a brand is American?
I think people view some of the international brands as being Americanized at this point. I don't think there's the negative connotation that there once was. Consumers are not as likely to penalize a company with an international name, a foreign name. But everybody likes the home team. You know what I'm saying. It's just that the home team still has to put a good team on the field and have a good game plan.
You're being sworn in as a second-generation AIADA chairman, just like 2012 chairman Ray Mungenast. How does it feel to follow in your father's footsteps?
Actually, my dad and [1997 AIADA chairman] Dave Mungenast were very close. Ray and I share that.
It's going to be a little bit emotional. As I think back to my dad's stewardship and his bringing me to Washington and getting me involved in these activities, the memories will be very strong as we go to into the meeting.
What do you remember most fondly about working with your father in the business?
He was a great mentor for me, my brothers, my brothers-in-law and key managers in our dealerships. He had a way of making complicated things seem simple, and making clear what were the really important things we had to do to be successful. He fostered in me the sense that we had an obligation to serve the community and the industry.
And you really can't separate the work that I'm doing from the leadership and mentoring that my dad gave all of us. Would I have gone to Washington when I did if he hadn't dragged me along? Absolutely not. But when I got there and saw what was going on, I had no doubt that I would need to do my fair share of the work. c