More than 25 years later, strong defender of dealers' rights fondly remembered

January 22, 2017 12:00 AM

During his term as NADA president in 1989, Ron Tonkin accused automakers of unfair practices toward dealers. Below, Tonkin, left, and his son Ed appeared at his first dealership in Portland, Ore.

> Tonkin timeline

Some important dates in the life of Ron Tonkin

1960: Opens his first dealership, Ron Tonkin Chevrolet, in Portland, Ore.

1983: Becomes an NADA director

1989: Becomes NADA president

1990: Tells NADA convention he is filing a lawsuit accusing the Big 3 and Toyota of unfairly paying fleet incentives that allowed car rental companies to buy vehicles at prices below dealer invoice. As the next speaker after Tonkin's announcement, Chrysler Chairman Lee Iacocca good-naturedly referred to Tonkin as a "pain in the ass." The suit was settled out of court.

1996: Speaking of his career, says, "I don't know if I'd be good at anything else. But I do know that I can turn a dealership around, get it selling cars, get it making money again."

2006: Commenting on the franchise system, says, "There is no better way. The automakers that produce the cars are really not good at selling them. Every time they have made an attempt, it has resulted in failure. It's a different side of the business. They have to make them, and we have to sell them."

2009: Is named one of Automotive News' 50 Visionary Dealers

Source: Automotive News archives

Firebrand. Outspoken.

An in-the-factory's-face dealer advocate.

Ron Tonkin, founder of Ron Tonkin Family of Dealerships in Portland, Ore., was all of that and then some, according to family members and dealers who knew him and Automotive News, which chronicled his year as president of NADA.

Tonkin took on the leadership mantle at NADA in January 1989. He promptly and publicly accused automakers of encroaching on dealers' businesses by unfairly allowing car rental and fleet companies to buy vehicles below the dealer wholesale price.

He ended his term in February 1990 with a lawsuit against the Big 3, Toyota and several rental-car companies over those subsidies. The suit was eventually settled out of court. Tonkin spent the months in between defending the dealer franchise system against automakers' use of retail rebates, customer satisfaction indexes and mandatory ad associations and fees. He charged factories with shoving unwanted inventory down dealers' throats and blamed them for dealers' dwindling profits.

ED TONKINRON'S SON AND 2010 NADA CHAIRMAN

"My dad is probably the most remembered NADA president there was, and I'm not saying this; it comes from so many dealers I've met and seen over the years."

'Rough Riders'

Less than a month after taking office, Tonkin released a list of 205 dealers he said would back him in his factory relations counter-offensive. He called them his "Rough Riders."

Tonkin wasn't the first dealer to take on what he considered injustices leveled by manufacturers against dealers, recalls Edward Lapham, a former editor at Automotive News.

> In his own words

Quotes from Ron Tonkin, the firey dealer

From a January 1989 interview with Automotive News:

■ "What I hope to do is create a new awareness of dealers, enhancing their self-esteem and self-worth in the triangle that makes up this industry -- the manufacturer, labor and the dealer. You know no two legs of that triangle can stand alone. You need the third, and too often our industry has been influenced by what the automakers say and do and by what labor says and does, and the dealers have been at the mercy of whatever decisions are made between those two entities."

■ "Dealer profits went down again in 1988, while the automakers went up from a magnificent 1987 to record quarters and a record year in 1988. They can't keep doing this on the backs of their dealers."

■ "I visualize the day -- and I'm serious about this -- that automakers come in and pay dealers for showroom space, like a food and beverage distributor does with a supermarket for shelf space. I visualize the day when automakers may have to pay a dealer to carry their parts, to actually be a parts station for them, to do their service work beyond the warranty costs. I'm speaking of where they have to share in some of the dealer's facility expense -- land, buildings, whatever. I think that day can come."

From his February 1989 acceptance speech at the NADA convention:

"I'd like our auto dealers to think of me as Mike Tyson. Not everybody likes what they hear about him, but so far nobody's beaten him."

From a March 1989 guest column in Automotive News:

"Our first focus is to once and for all get rid of fleet subsidies. We dealers are suffering, and so are our customers. Fleets get our new models first (coming in from Dulles Airport a couple days ago, I saw a Chevrolet Lumina, and I know we don't have any at our dealership in Portland, Ore.). They buy for less; they have guarantees; and they don't have CSI, parts departments or facility requirements."

"But he was the one that got to be president of NADA and that's what gave him more leverage; he was able to give voice to some of the dealer concerns, like fleet subsidies, like retail rebates, like the ad associations," recalls Lapham, who retired from Automotive News in 2013.

Tonkin was 82 when he died in 2014.

Today, sons Ed and Brad Tonkin are co-presidents of Ron Tonkin Family of Dealerships. The group ranks No. 93 on Automotive News' top 150 dealership groups based in the U.S., with new retail sales of 10,958 units in 2015. In December 2016, Ron Tonkin Family of Dealerships agreed to sell 16 of its 21 dealerships to Gee Automotive Cos. of Spokane, Wash.

It's been more than a quarter of a century since Tonkin burst onto the scene, and he is still fondly remembered as a champion of dealers' rights.

NADA, at a June 2016 board meeting in Aspen, Colo., presented a proclamation to Tonkin's family in his honor for extraordinary service to the industry and the positive impact he made on dealers' lives while he served.

"My dad is probably the most remembered NADA president there was, and I'm not saying this; it comes from so many dealers I've met and seen over the years," said Ed Tonkin, who followed in his father's footsteps to chairman of NADA in 2010. NADA changed the title of the leadership position to chairman in 1998.

The Tonkins were only the second father-and-son duo to lead the dealership group, according to Ed Tonkin. "He didn't do what he did for self gain. He was so passionate about the dealer body and doing right by the dealers, and let's face it, he took it to the extreme," said Ed Tonkin.

Ed Tonkin said he and his brother, Brad, who ran the family business while his father carried out his NADA presidential duties, encountered "some ill-will from the manufacturers." There was "woodshed taking and some fence mending" that went on, too, he said.

"It wasn't easy for Brad and me in terms of business," said Ed Tonkin. "He said, "I make the messes and you clean them up.' But what the dealers loved him for is he would fall on his sword for the betterment of the dealer situation in this country."

By the time Tonkin took over the reins of NADA in January 1989, he had been an NADA director since 1983. He was an early megadealer, a term used then for private owners of multiple dealerships and franchises, said Lapham.

Tonkin's dealerships sold Chevro-let, Honda, Lotus, Toyota, Dodge, Bertone, Ferrari, Alfa Romeo, Maserati, Acura, Yugo, Suzuki, Zimmer and Sterling, according to a Jan. 23, 1989, Automotive News article.

Doug Knust, president of Harry K Chevrolet-Buick, in Oacoma, S.D., and of Harry K Ford-Lincoln in Winner, S.D., had been in the retail auto business with his father only "two or three" years when he was introduced to Tonkin and NADA in the pages of Automotive News.

Knust admired Tonkin because he was an advocate for all dealers, no matter their size or location. He met Tonkin in person a year or two after joining NADA's board of directors in 2007 as its South Dakota representative.

Inspired by Tonkin, Knust became an advocate for small and rural dealers at NADA gatherings and other meetings.

"I think small dealers tend to be under-represented on boards whether it's the NADA board or dealer councils -- and here's a guy who wasn't a small dealer but empathized with many of the issues we had to deal with," said Knust. "Oftentimes, [the issues] are similar to the issues the big dealers have to deal with."

Inventory advice

During his presidency, Tonkin advised dealers to reduce their new-vehicle inventory to a 15- to 30-day supply, a controversial business position with far-reaching legal ramifications.

Such skimpy inventory was impractical and dangerous for dealers who generated most of their sales from their on-hand stock, as a Nov. 6, 1989, Auto-motive News article pointed out. More important, it drew the attention of the U.S. Department of Justice, which in 1994 began a 16-month probe into alleged antitrust activities at NADA dating back to Tonkin's letter.

In 1995, NADA agreed to a settlement. It admitted no wrongdoing but promised not to engage in antitrust activities and agreed to 10 years of Justice Department monitoring.

H. Carter Myers III, a Virginia dealer who took over as chairman of NADA in 2002, donated $100 to Tonkin's cause in 1989, which made him a Rough Rider. He strongly believed in the franchise system then and still does.

"We work harder for customers than any other system out there," Myers said. "It's got to be respected by the manufacturer. It needs to be a two-way street.

"Ron Tonkin spoke up for those kinds of principles."