Some say that no one is indispensable. But the 63 dealers who make up the National Automobile Dealers Association's board of directors likely would disagree.
Frank McCarthy, 63, the chief executive of NADA for 30 years, has told the board he plans to retire Dec. 31, 2001, after 34 years with the association. It is difficult for many of the directors to envision life without him.
Under McCarthy's stewardship, NADA has flourished. It is bigger, provides more services to its members and has enormous financial strength. But more than that, Frank McCarthy embodies the best qualities and values that dealers need to project in Washington.
Some might question his hands-off management style or quibble about things he could have done differently along the way, but he leads by example. McCarthy lives a balanced life in a city full of workaholics, and he is known as a man of integrity in a town where doublespeak is rampant.
'We don't know how we are going to replace Frank McCarthy even though he has announced his retirement four years out,' says Paul Holloway, chairman of NADA and president of Dreher-Holloway Inc. in Exeter, N.H.
NADA has formed a reorganization committee that is looking not just at how to replace McCarthy, but how to change the association to make it easier for someone else to pick up the reins. A search committee will be organized in mid-2000, and NADA wants to hire McCarthy's replacement a year before he retires.
McCarthy acknowledges that his successor will have a tough job: 'If I had known what it would be like when I first started, I would have panicked.'
NADA has 19,500 members, about 86 percent of the dealers nationwide. The association has a staff of 420, up from 175 when McCarthy came on board.
McCarthy would not disclose the association's net worth, but its retirement fund alone is a staggering $3.3 billion. When he became the chief executive, the retirement trust amounted to about $55 million.
Under McCarthy, NADA's Dealer Election Action Committee has amassed one of the biggest war chests in Washington. In 1975, the year the committee was formed, it raised $545,997. In 1997, contributions totaled $1,647,797, NADA statistics show. The Dealer Election Action Committee ranked fifth in contributions to candidates from Jan. 1, 1995, to Dec. 31, 1996, according to the Federal Election Commission.
The dealers who know him say McCarthy has made NADA a force to be reckoned with among automakers and legislators alike.
'As a spokesman for the dealers of America, he has taken NADA to an extremely high level of credibility and activity,' says Andrew Card, president of the American Automobile Manufacturers Association. 'NADA is one of the most active memberships of any association I know of that size.'
McCarthy became a businessman quite by accident.
He was a 33-year-old government lawyer when he applied for the top job at NADA. He ultimately was hired as NADA's chief executive for his experience on Capitol Hill. And his liberal arts major in college was a far cry from accounting and business administration.
But during his 30-year career at NADA, McCarthy has steered the organization to a position of financial strength almost unheard of in the association business.
'A huge point that many association executives miss is they call themselves association executives,' McCarthy says. 'They concentrate only on how to run associations. I say they should be business executives first.'
His business focus enables NADA members to get more bang for their buck, he explains. While member dues are the primary source of income for most associations, dues make up just 3.5 percent of NADA's income, McCarthy points out. The rest comes from investments, rents, dividends and fees for dealer services.
According to the American Society of Association Executives, associations with corporate members receive an average of 46 percent of total income from dues. Membership dues cover just 27 percent of the cost of NADA member services. The average association pays 46.9 percent of expenses with membership dues.
Ask McCarthy how he developed his business acumen, and he is quick to point to his members. 'I was trained by the dealers. I never had a business course,' he says.
He learned the importance of the bottom line early. 'In 1970, we budgeted to lose $60,000. When the year was over, we lost only $40,000. The finance committee said we had a bad year,' McCarthy recalls. 'I said, 'Excuse me, but we beat the budget.'' But the dealers, seeing red ink, said there would be no pay raises for the NADA staff that year.
'Since that time, we've never had a year in which we have not made money,' McCarthy says.
Dealers coached him in sound business practices. For example, one had advised McCarthy to buy twice as much land as NADA needed for its offices in McLean, Va. NADA is now constructing a building next door; the rental income from that building will pay the expenses of the McLean property.
Another dealer urged underground parking at NADA's office building. Situated between two busy airports and the Capital Beltway, the Tysons Corner area where NADA is based has now become crowded. 'No other building here has underground parking, even though we had the first building built in the area. It's saved us a lot of money,' McCarthy says.
NADA also has a building on Capitol Hill. It could have leased that building, but instead decided to buy the property in 1979 after a dealer said the real estate was so valuable he would buy it himself if NADA didn't want it. 'The finance committee reversed its vote on the spot. Rental rates have more than tripled since we bought the building,' McCarthy says.
Now, 67 percent of NADA's income is generated by nondealer sources - rents and other investments, he says.
It is difficult to find critics of McCarthy. He seems to be universally respected among the dealers and manufacturers, lobbyists and politicians.
'He can pick up the phone and call any major car company executive and get through,' says Frank Ursomarso, an NADA director and president of Union Park Pontiac-Honda Inc. in Wilmington, Del. 'That's a big plus.'
And McCarthy knows his way around Washington, although as the association has grown, he has left much of the lobbying to dealers and to his legislative staff.
'When we went to the signing of the minimum wage bill (in 1996) on
the south lawn (of the White House), there were 400 people there. He knew damn near every one of them,' says Ramsay Gillman, an NADA director and chairman of Gillman Cos. in Houston. 'People would walk over and say hello to him - from congressmen to other government dignitaries.'
Though he is known on Capitol Hill and in executive suites, McCarthy likes to maintain a low profile. He dodges the limelight, encouraging NADA members to take the lead.
'If somebody comes up with a good idea, I then become an advocate for them and their idea,' McCarthy explains. 'I let them present it. They have the enthusiasm and the knowledge. I get them out in front. When they present it, I support it.'
Supporting the members also helps put things into perspective. As Past President Gillman says, 'Dealers can be independent cusses.' When the NADA board gets riled, McCarthy has a reputation for calmly settling disputes and being politically astute.
'He has an air of self confidence without any arrogance,' says Gene Fondren, president of the Texas Automobile Dealers Association. 'Frank hasn't made the mistake a lot of association executives made. He doesn't think NADA belongs to him. He knows it belongs to the dealers.'
Although his performance can be compared to that of a successful corporate executive, McCarthy makes a distinction between himself and many CEOs.
'Many successful CEOs have not had successful marriages or success with their children because of the time commitment for the job,' says McCarthy, the father of five children. 'One reason I came to work for NADA was that dealers understand the importance of family. I don't work on Sunday. I am home every evening.'
His board members say that he often has excused himself from a late meeting to make time for a family event.
McCarthy and Pat, his wife of 36 years, also are active in their local church and in a ministry serving the elderly. And, based on interviews with former employees, he practices the golden rule.
'My family is from California. So on the holidays I was an Eastern orphan,' says Scott Lane, a former lobbyist for NADA who now lobbies for the American International Automobile Dealers Association. 'He invited me over to have Easter dinner with his family. Those are the type of small things you never forget.'
When he is not with his family or in the board room, McCarthy is likely to be on the golf course. He is an avid sportsman, playing golf and softball. And those in the industry who are familiar with his game say he is pretty good.
'The way he plays golf is a lot like his personality,' says Mark Schienberg, executive vice president of the Greater New York Automobile Dealers Association. 'He does not go for the big shot. But he's consistent. He gets down the fairway to his objective.'