In September of 1998 I had the privilege of interviewing Jim Willingham, incoming Chairman of the National Automobile Dealers Association. Jim is a multi-line import and domestic dealer in Southern California. After spending some time with Jim, it's difficult for me to imagine someone more prepared, more experienced or better suited for the enormous job which lies ahead of him this year, leading the NADA into the next millennium.
Q: Jim, you're about to become Chairman of the National Automobile Dealer's Associationtell me how you got into the car business.
Jim: I majored in geology at the University of Missouri and was working between semesters for Shell Oil when I got laid off in 1950. I subsequently saw an ad for a sales trainee at Ed James Studebaker. At that time, Ed James was far and away one of the largest Studebaker dealers in the country. Long Beach Boulevard was called America Avenue in those days and in the 50's it was covered with dealerships. It was like the fifth largest street of dealerships in the country we had every make of dealership down on America Avenue. It was huge.
Q: It was an auto mall before there were auto malls.
Jim: It was an auto strip. Anyway, I went through the sales interview, they liked me, put me in a classroom for a week, put me on the floor with a trainer for a week and then let me sell cars. This was a temporary job until I went back to school, but after the first two weeks of selling, I realized I loved it. I had a passion for it. I already loved cars and I knew selling them was what I wanted to do with the rest of my life. The very first day I sold a used pickup truck. I had been making $300 a month with Shell. My first two weeks on the floor I made $1,000 in commissionwhoa, this is IT, I thought. My second month was very successful and then the next and then that August my fiance and I set our date to be married on August 27, 1950. After only four months in the automobile business I was able to get married and own my first car. I joined the Marine Corps at 17, right after graduating from high school. After my tour of duty in the Marine Corps, I started college on a football scholarship at University of Missouri; after three years, I suffered a severe football injury, came to California to recuperate and found a temporary job. I was never able to save enough money to buy my own car back then.
Q: You sold them before you ever owned one?
Jim: Sold them before I ever owned one. And the first one I ever bought was a brand new Studebaker Champion convertible. So I spent almost two years with Ed James as a salesman but I could see that Studebaker just wasn't really where it was at. I moved up the street two blocks to Master's Pontiac. After four months I became the assistant new car manager. In 1955 the dealership was sold. I had an opportunity to become used car manager for the Oldsmobile dealer three blocks up the street.
Q: Even though you moved around, your customers didn't have any problems finding you, did they?
Jim: Three blocksI started at 1350 Long Beach Boulevard, went to 1545 Long Beach Boulevard and then back down to 1211 Long Beach Boulevard. Those three or four blocks have been a huge part of my life. I stayed at the Oldsmobile store until 1960. At that point I was general sales manager. A friend of mine who was a Buick dealer knew my reputation and he knew that I wanted to be a dealer. I had been in the business a little over ten years and I wanted equity. Well, he had a stroke and was not really able to oversee the dealership. I went to his home to visit him and, to make a long story short, he and his wife offered to sell me 25% of the Buick store. I had saved a lot of money, but I didn't have enough to buy 25%, so they loaned me the rest. With their loan I was able to show 25% ownership. We changed the name from Campbell Buick to Boulevard Buick on February 1, 1961 and just went from there. Buick and Buick management have been a major part of my life for 38 years. My Buick franchise and its success allowed me to expand into the other dealerships.
Q: No regrets?
Jim: No. Well, maybe one. In May of that same year Mercedes-Benz made three trips to ask me to become a dealer for them, but I had seen the new Jaguar XKE. They came out in August of 1961 and they were the most beautiful cars I had ever seen. I had an opportunity to buy a Jaguar franchise and did the deal. I'm the oldest active Jaguar dealer in the country, seniority-wise.
Q: So you chose a Jaguar franchise over Mercedes?
Jim: Biggest mistake I ever made.
Q: What happened next, growth-wise?
Jim: Well, Ford was having trouble in the late 70's and early 80's and the local Lincoln/Mercury dealer went bankrupt, so I was able to get that franchise in 1981. Eventually, Lincoln/Mercury came back, Jaguar came back and even Saab, which I had purchased in 1981, took off. I bought a GMC truck franchise in 1982 and in 1984, I acquired on a Jaguar/Rolls Royce/Ferrari dealership at Pebble Beach, California.
Q: Life is good. You were set for life. You could just sit back and put it on cruise control at that point, right?
Jim: Not exactly. In 1988, the county transportation office wanted to build a light rail line and although there were several routes to take, they put it down the throughway of Long Beach Boulevard. We had a beautiful four lane boulevard with landscaped dividers, palm trees, turnouts to our dealerships and side parking on the street in front of the stores. They closed it down to one lane in each direction for 38 months. I lived three miles from the stores and it used to take me five minutes to get to work. During the construction it took me twenty-five minutes. We lost 50% of our business during that time and Long Beach Boulevard never recovered; all the dealerships had to move out. It's a ghetto now.
Q: How did you stay in business?
Jim: The stores in Monterey were doing well. Whatever our losses were here, we made up there.
Q: So having expanded kept you in business?
Jim: Yes. At least until the [Department of] Defense cutbacks.
Q: Cutbacks?
Jim: The military cutbacksthe base closings. The Long Beach Naval Base was the first to go. They had 31 ships and 35,000 sailors and personnel. In December of 1990, McDonnell Douglas had 52,000 employees; today, they have 18,000. Hughes pulled out, taking 4,800 jobs with them and Northrup took bankruptcy and was bought by Raytheon and moved away. Then they closed the naval shipyard. Long Beach had a population of 450,000 and we lost 100,000 jobs from 1991-1994 100,000 jobs. We made it, but it was tough. I had to lay off my own son at one point.
Q: Jim, do you think that your experience with those adverse conditions and tough times will benefit you as the 1999 Chairman of NADA? I mean, it is, after all, only a matter of time until we cycle into a downturn.
Jim: No doubt about it. No doubt about it because I know to do the things that have to be done. When you lay your own son off, I mean, you're really talking tough. You have to make the tough decisions. I had to sell my Lincoln/Mercury store. I sold off Subaru and Saab to stay alive. I had a 400-car rental company which I sold. I had a leasing company with 900 units which I sold off to put money into the dealerships to keep them running. We really had to cut to survive. The recession went on a lot longer than we anticipated and this little pocket here in Long Beach was a disaster. The Toyota dealership was losing money. How many times have you heard about that happening? The old Long Beach Boulevard area is a ghetto now.
Q: Why is it you want to be Chairman of the NADA?
Jim: I want to give something back. I've been involved with NADA, the California Motor Car Dealers and the Long Beach Harbor Area Motor Car Dealers since the sixties. I've been president of the local Chamber of Commerce, Rotary, the hospital board, even the Miss Universe Pageant. My dad was a Baptist minister with a large family and he always taught us that it's better to give than to receive. That's ingrained in me. Live by the Golden Ruletreat people the way you would like to be treated. It's not necessarily that I want to be chairman, it's a byproduct of my upbringing to want to give something back to this business which has given so much to me.
Q: What can the NADA do to help dealers prepare for the potentially rocky road ahead?
Jim: I think the NADA has always helped dealers prepare, if dealers only take advantage of it. My son went through NADA's Dealer Academy and it was great. He went to General Motors' dealer schools, but the Academy really teaches you the business. I now send all of our general managers to NADA's Dealer Academy. We sent our body shop manager to several two-day seminars. I'm not sure what the future holds on vehicle service, but we know they're going to crash them. We expanded our body shop and, with NADA's training of our body shop manager, we do $275,000 in sales per month in our body shop.
Q: Jim, what is the most important function of NADA?
Jim: Government relations. I got involved in local politics in the 60's. I served as State Fundraising Chairman for assembly and state senate for George Deukmejian. I worked for Nixon and Reagan. I became chairman of our legislative committee in Sacramento, working to have laws passed to eliminate some of the ridiculous legislation that California had, the anti-business liberal laws. I knew that being involved with the political types was the best way to get things done. I was elected to the NADA Board of Directors in 1987 and was appointed chairman of the government relations committee by then-President Ron Tonkin. I was chairman for three years and I'm still on the committee. I strongly believe in being "connected" with government, because they can kill you. I mean, they're your partner right?they get 50%, between federal, state and local taxes50 cents on the dollar. During the 60's and 70's, I don't think NADA did a very good job of working with government to protect dealers. My approach with NADA was to stop and/or change harmful legislation, but it isn't easy. Wouldn't you think that every senator and every congressman would want to pass a law that puts people in jail if they defrauded consumers? It took us fifteen years to get an odometer law. We finally passed our bill, with me hammering and hammering and hammering. Now we're on the Branded Title Bill. The fact that something makes sense and is good for consumers does not necessarily mean the politicians will back it. Salvage vehicles defraud consumers of $4 billion a year. Logic alone will not win the battle; that's why the Dealer Election Action Committee (DEAC) was founded in 1974. I became a trustee on DEAC before I even became a member of the NADA board. Now we're raising a million, six hundred thousand dollars every year, so in a two-year election cycle, we're raising over three million dollars. We're really becoming a force in WashingtonWe do get their attention. They listen to us. There's a dealer working with them in every congressional district in the country. We're grassroots and they listen to us, and the manufacturers do not have this advantage. This wouldn't be the case without NADA and the hard work put in by dealers over the years. Let me tell you, it's difficult to call up your fellow dealers and ask for $5,000 for the President's Club membership. But I believe in it. I was one of the first out-of-staters that Sam White (a Houston dealer that founded the President's Club) asked to write a $5,000 check, which is the maximum a dealer may contribute to become a President's Club member. When Sam passed away, we kept him on the President's Club as Honorary Chairman, but I've been chairman of the President's Club since then, as well as a trustee on DEAC. In fact, if I weren't coming in as chairman of NADA, I would be chairman of DEAC this year. My emphasis has really been towards government relations and combating onerous government regulations on franchise dealers.
Q: In your opinion, Jim, what is the biggest point of contention between dealers and manufacturers?
Jim: Too many dealers. With all the imports, the foreign manufacturers coming in and taking 30% of the business, 60% in Southern California, there are just too many domestic dealers and too little opportunity to make money. First, they wouldn't let us dual, now they're partnering with Republic. The problem which we have right now is that the manufacturers tell us one thing, that they're going to do it "this" way one month and the next month they turn around and do something else. At first, GM was going to put a lot of money into a pot and buy dealers out. You know there are too many dealers, I know there are too many dealers, the factories know there are too many dealers and the dealers know there are too many dealers
Q: "You give up your dealership, but I'm not giving up mine?"
Jim: Right. I want mine, you sell yours. Now there's this consolidation with the Republics and the Sonics and United's and all of the other public companies. They are helping the factories reduce the number of dealers because they are doing the consolidation for them in many cases.
Q: What about Ford's plan?
Jim: We (NADA) didn't agree with the way they approached Indianapolis and we told them so. Ford demanded 51%, or more; they went with the intent of controlling it and it didn't work. They went back to the drawing board and came back to Tulsa and San Diego with a plan where Ford owns 49%. The dealers own 51% and have the control. With a little nurturing, a little bending here, a little shaping there, they came up with a formula that works. I think that's great.
Q: Jim, NADA has 460 employees and a budget of over $60 million. What will be your top three priorities as chairman in 1999?
Jim: Number one, as you know, we are in a reorganization at NADA. After more than thirty years of outstanding service and leadership, Frank McCarthy will be retiring soon (in three years). Frank really formulated our involvement in government relations; he helped get us involved with the Federal Action Committee (FAC). He has provided tremendous leadership in regards to education, the Dealer Academy and all of those dealer services. The staff executive directors of NADA, of which we have thirteen, all report to Frank. He developed the job which they hold now - he trained them, he hired them and he groomed them. When Frank leaves, we can't have thirteen people reporting to the new person because the new exec won't know the business that well. We've got to get it reorganized with a lower tier of executives, COO's and CFO's and such. We'll be working very hard on that. We are working with a nationally-known consulting firm to assist us. Frank has three years left and in 1999 we will be introducing and fine-tuning the reorganization plan. It's going to be a tough sell - staffs typically don't like change and boards of directors typically don't like change. Our board is too large, the committees really run NADA. My number one priority is to implement the reorganization plan which hasn't been completed yet, we're still working on it.
Q: Good luck. Not a lot of glamour or glory in that task. What will your second priority be in 1999?
Jim: I'm going to continue Paul Holloway's number one priority. We must continue to develop better relationships with the manufacturers. I'm going to continue that, because it is impossible to accomplish in one year. You must have a consistent, long-term push to build bridges of communication.
Q: How would you do this?
Jim: Without naming names, I have met and become friends with many of the top executives of the manufacturers, both foreign and domestic. I am able to meet with these leaders. I can talk with them. If you strip away all the rhetoric, differences can usually be amicably resolved by talking - whether it's one-on-one in an office or on the golf course.
Q: And your third priority for NADA in 1999?
Jim: I want to expand the world of government relations. I think we need to increase the size and quality of the people we have in this department. We have seven lobbyists now, but seven lobbyists can't really get to know 535 legislators. We need more. I hope when I have served my year as Chairman, I can say I added VALUE to the DEALER's franchises.
With that, I concluded the interview with Jim Willingham. He has a challenging year ahead of him, but he appears to be up to the challenge and is eager to provide the necessary leadership at the top. I wish him the best of luck.