NADA, Alliance, others urge Trump to classify dealerships as 'essential'

Editor's note: Penske Automotive's stores in the San Francisco area are open. The dealership group on Wednesday corrected a previous statement about the status of its stores there. 

The National Automobile Dealers Association and the Alliance for Automotive Innovation are asking President Donald Trump to issue national guidance that dealerships be considered essential businesses amid forced closures of retailers in certain jurisdictions across the country as a result of the novel coronavirus outbreak.

"It is vital that vehicle repair, maintenance and sales facilities be considered essential operations when federal, state and local officials impose certain requirements due to the coronavirus outbreak," according to a letter delivered to the president late Tuesday and signed by Peter Welch, CEO of NADA, and John Bozzella, CEO of the Alliance, which represents manufacturers and other companies.

The letter also was sent to Vice President Mike Pence, other Cabinet members, Senate and House leaders and the 50 state governors. The letter highlights the work dealerships provide on vehicles such as needed safety recall repairs and automaker warranty work.

"We hereby request that, as you consider further national initiatives to contain the severity and duration of the spread of the coronavirus, including potential executive orders, you ensure that our nation's motor vehicle fleet remains as safe and operational as possible," according to the letter.

Already this week, CarMax, the auto retail used-car giant, completely shut five stores in the region.

The counties of San Francisco, Santa Clara, San Mateo, Marin, Contra Costa and Alameda, plus the city of Berkeley, issued a shelter-at-home order effective Tuesday until April 7, according to a memo from the California New Car Dealers Association. The order requires nonessential businesses in those counties to close.

The California dealers association said auto repair is listed as an essential business, so dealership service and parts operations should remain open. Other local governments have initiated or plan similar moves to help control the spread of the virus as cases continue to climb.

The NADA and Alliance letter specifically cites the City and County of San Francisco's order that "gas stations and auto-supply, auto-repair and related facilities" are treated as essential businesses and don't fall within the order.

Meanwhile, American International Automobile Dealers Association President Cody Lusk on Wednesday joined the effort. He issued a statement that said dealerships and their service centers are essential businesses and asked that lawmakers keep dealerships’ value in mind when making further decisions related to the coronavirus.

“Dealers are working around the clock to ensure compliance with CDC guidelines and establish safe conditions for both their employees and customers,” Lusk said. “Local governments should allow them to continue to make available the essential services their communities require.”

Minority dealers

The National Association of Minority Automobile Dealers also made a plea for assistance in a letter to the president.

"Automobile dealers across this great nation -- particularly ethnic minority automobile dealers -- will find it extremely difficult, if not impossible, to obtain access to capital and to maintain their current banking relationships due to the coronavirus' impact on our dealers who are located all over the country," the letter said. "Although the trouble facing the overall automobile industry has yet to be publicized, what's even more prevalent in these crucial times is the difficulty facing the small business owners who are the ethnic minority automobile dealers."

The group appealed for lenders and captive financiers to forgive 90 days of mortgage payments and for lenders to waive  curtailment  payments for floor plans, the letter said.

"With the economic turmoil that this country  is  facing  due  to  COVID-19,  60 percent of  the  entire  minority  dealer body could run  out  of  cash,  lay  off  employees and  possibly  close  their doors  by  year  end," the letter said. "Federal  financial  assistance  is  needed  immediately  to allow these small businesses and employees to survive."