3/23 Update from Steve Jordan CEO of NIADA

Hey, everybody. What is going on? We had the wonderful opportunity of getting Steve Jordan here, CEO President, niada, to help us out, answer some of the questions that I know us dealers have on our minds about what kind of support are we getting from the association, things like that. Luke?

Well, it is the honor to have Steve with us. And Steve, we appreciate your time. And I know a lot of dealers out there are. I mean, we're scared. I mean, you know, it's not business as usual as we were just talking about. And it's good to know that NIADA has our back. And what we really want to talk about is what you're doing. And I know there was a press release on Thursday. Could you walk us through that and kind of shed some light on what's going on and where we are?

Yeah, happy to do it. And thanks, thanks for creating this podcast apparatus. I think it's. I think it's great. I think you guys do a great job. You create really kind of cool content that is applicable to the dealers and the dealer community. And I'm happy that you guys invited me to be a part of it and happy to share a little bit about some of the things that NIADA is working on on behalf of not only our members, but the industry as well. I feel like, just like all of the other dealers, we have 15,000 members in all 50 states. And I feel like every single day it's a new. There's new information that's coming out that we're having to assimilate. There's new rules, there's new regulations, there's things that are happening in California and New York and New Jersey and Ohio and Florida and Texas that everything is different depending on your jurisdiction, depending on what state you live in. Some states are issuing the shelter in place orders. I know San Francisco kind of started out of the gate with that early on, and that kind of bled over into other jurisdictions and other states and different things. So just like everybody else, Niada has been drinking from the same fire hose of information that the dealers have that our members have, that our vendor partners have had. But if there's one message I would like for people to take away from this communication is NIADA is working hard behind the scenes day in and day out with our vendor partners, our stakeholder partners, with nada, with naa, with our board of directors, with our state associations, and we're getting a lot of dealer feedback as well on top of that. But, you know, some of the things that people may not see behind the scenes are all the things that we're doing, the conference calls that we're on. We were on a conference call on Friday with the President of the United States through our partnership and relationship with the US Chamber of Commerce. He was just kind of telling us about all the same things that we're all hearing about the Small Business Administration, loan opportunities, the deference of tax payments, all the things that we're all hearing. But we're in constant communication with our counterparts at NAA because we know buying and selling wholesale vehicles is an integral part of what the industry's reaction is. Certainly our friends at nada, you know, we're collaborating with them on policy positions on, you know, the definition of essential business. You know, that's been. You know, that's been a conversation. We've been having a lot of dialogue about behind the scenes. We just sent a letter to the Governor's association on Friday asking them to also consider car dealerships, car sales, automotive service, automotive repair, as an essential, operational, kind of ongoing business. So there's a lot of stuff happening behind the scenes. And I can tell you, you know, Sean Peterson and our government affairs team, Devin with our events team, Angela Ledbetter with our field staff, you know, Melanie, our cfo, you know, Chuck and Diane with our dealer development team, we've all created internally, we've created a COVID 19 kind of daily response, you know, kind of conference call. So we meet daily to assess what. What new is coming into the marketplace, what new are we hearing, what are the various jurisdictions doing, and what is the. The needed Niada response? So. So anyway, that's just the kind of the tip of the spear, the tip of the iceberg of some of the things that NIADA has been working on kind of behind the scenes.

So that's great, and we appreciate y' all doing that. Steve, I just want to address one thing real quick. Can you talk to dealers who may think that maybe y' all are a little slow to the game to get out there and help us? Independent dealers. Can you talk us through that 100%?

And look, we've heard it, too. We've heard dealers saying, you know, what is Niada's position on this? What is Niada's position on that? We. We kind of looked at everything that was going on, and we had to assimilate just like everybody else, what we're hearing from the White House, what we're hearing from the cdc, what we're hearing from the World Health Organization. And it seems like every day what we're hearing is different. So what we didn't want to do is go into the marketplace with the same things that everybody else is hearing. I don't know if you guys saw that meme. I'm sure you did. There was a meme about a week ago that said, thank goodness I'm hearing from everybody I ever gave my email address to about their response to COVID 19. So it's good to know that Tropical smoothie has a COVID 19 response plan. So what we didn't want to do is go into the market so quickly with the same things that everybody was hearing. What we felt we wanted to do was assess what was really going on, engage our response accordingly, so that when we did have something to say, it was actually meaningful. And we didn't really get to that place until early. Well, I'd say at the end of last week, until the Congress actually passed their first piece of, like, meaningful legislation about what some of these relief packages look like, what some of the SBA loan considerations look like. Essential businesses. You know, there were a lot of things happening. There were a lot of conversations taking place. We didn't want to contribute to the white noise until we actually had something legitimate to say. And that really wasn't until the end of last week.

And I think that's fair because in my opinion. I don't know about you, Jeff, but I feel like this happened real fast and maybe I was just blind to it, but we went from business as usual a week or so ago to businesses are being shut down. I mean, that's. Yeah, it's kind of nutty, right?

Yeah. I mean, for me, yeah, I'm a little too optimistic, I would say. I actually, I told you last week, I wrote it on my calendar here at the office, that today this would be a mood point. I think I overshot that by maybe three months, the severity that this would drag out. But great. From an niad standpoint, what I know we talked a little bit with Sean about what's gonna be in this government stimulus bill, what's not. I think we are all pretty much on the same page, that the repost day order is not going to show up in a final version of this. The association, and Sean has said this, that they've also fought hard to, you know, like you said, classify dealerships as essential businesses the ability to sell a car and give your first responders, or anyone that needs to get around a reliable transportation.

Yep.

My argument, you know what I'm saying? And that's where I see the association is having that pull and being able to flex that muscle on the state level and on the federal level, you know.

Yeah, so that's true, you know, and we were just talking about this this morning on our Covid management response team. We are getting a lot of questions from dealers asking am I an essential business? And the answer to that question really depends on where you're at. It depends on what state you're in, it depends on what county you live in. It depends on what kind of business you do. I can tell you at the federal level, they had a very specific conversation within the White House and decided that car sales specifically should be carved out. But auto repair, auto service, and some of those kind of ancillary conditions would apply at the federal level. But some states have come in and even at the county level have come in with their own interpretation of that. And it's different. And it's different by state, it's different by county, it's different in some cases by city. Let me give you an example here in Dallas, you've got Dallas county and you got Tarrant county, and you've got. Dallas is obviously in Dallas County. You got Fort Worth and Tarrant County. Dallas county came out with a shelter and order, a shelter in place order last night at midnight. We expect Tarrant county may be doing something similar here in the next couple of days. We don't know. But if you look at the Dallas county shelter and order or shelter in place order, it leaves it open to interpretation, and I don't want this to be construed as legal advice, but it leaves it open to interpretation that auto supply companies are considered essential businesses. So what does that mean? If I supply somebody an automobile, I could argue that that's an essential business. So it's a little bit. So the first, the first takeaway is the definition of a central business is going to be limited to where your location is, what county you're in, what city you're in and what state you're in. Because everybody's coming up with a little bit of a different interpretation of what that means. So for Dallas County, I would personally argue this is not the NIADA position, but I would personally argue if I'm an auto supply company that in my personal non legally binding opinion would suggest that auto supply could mean auto sales.

And that's what I think, Steve. Like, I guess I play this out in my brain and if you want to be open and you think you've got an argument and you feel like you're being as smart as you can at your dealership to Be socially responsible. Who. I mean, is your state attorney general gonna notice this? And are they gonna send you a notice? Are they gonna send you a fine? I think city gonna find you.

Who's who. I think I saw Joe Mock, but Joe Mock posted, I think, about Illinois and where they had. In different counties or cities, they actually had law enforcement going to these dealerships and saying, hey, you gotta close. And so I think that's what would happen, Jeff. Not necessarily.

Yeah, they're gonna get fine.

Have you seen that? Have you seen that, Steve?

Well, we. Again, you know, you hear horror stories about stuff like that. We heard, you know, people in Fort Worth were getting tickets for going to a skate park yesterday. But you just don't know, right? I mean, and this is where I say it's. It's an operational decision best to the operator in consultation with your local attorney and some of those things. But it's one of those deals that is 100% dictated by where your business is.

So can I jump? Let's transition here. What is NIADA doing or what can they do to help us against. Not against. That's the one I'm worried. Help us with our vendors. Help us with our vendors to come together. Right now, it seems like every dealer is individually trying to negotiate with a vendor or get information or see what concessions are gonna happen. Is there a place for the association to put that all in one area and say, hey, we flexed against Cox, and here's what they're gonna do? We've talked to these guys, and here's what they're gonna do.

100%. Yeah. So. Great question, Jeff. So that's also one of those things that we've been working behind the scenes on over the last couple of weeks, is having ongoing conversations with Cox Automotive, with Car Global, with Adesa, with Trade Rev, with Manheim, with NextGear Capital, with AFC, with Wells, Wells Fargo, with Westlake. You know, NIADA is in a unique position to have relationships not only with, you know, 15, 16,000 dealers in all 50 states, but we also have great corporate relationships with our partners and our vendors, the ones that all rely on the independent dealer success to make a living. So, you know, there's some limitation that we have as a trade association not to get involved in antitrust laws and setting prices. And, you know, you can argue that asking for discounts on behalf of our members, you know, in a situation like this, could run afoul of antitrust laws. But let me say this. At the end of the day, we're all in this thing together. And we have been working behind the scenes with our. Our partners, with Cox Automotive, with Car Global, with, you know, all of the other ones that you can imagine. And we have created a resource@covid19.niada.com it's the website that we created that we talked about on Friday when we sent a press release out that gives dealers a central location to go so that they can see all of the resources that are available through the NIADA partnerships to the individual dealer. So we're also in the process. So there's kind of two things on that website. Number one is all the COVID 19 industry response items. You know, the legislative aid package. Sean has done a really good job of creating some guidance on how to interpret that. How does, you know, how does niada's interpretation of this legislative aid package apply to my dealership? Sean's done a really great job of kind of capsulizing some of those key points and putting it in a format that's easily digestible. But we've also got some other links on there to the sba, you know, where you can get access to, you know, funds and all the federal legislative stuff. The second thing that we're working on, kind of phase two, and it might already be up there, and if it is, we're going to be adding more, you know, dealer resources and vendor resources. But we want to create a place where dealers can go and say, hey, what's NextGear doing? And who do I need to call at NextGear if I have a question? What is, you know, AFC doing? And who are my contacts at AFC if, you know, if I have a question about their E package, Westlake and Ally bank and all of the other partners that we have, they're all working on something for the industry, and we feel like it's their story to tell more than it is NIADA story to tell. We have those relationships, and we've been in constant contact with a lot of these vendors and a lot of our partners to simply say, hey, dealers are struggling. Dealers have some uncertainty out there. Anything that you can do to remove the uncertainty for our dealers would be hugely helpful. I think that's great.

And I think just having all our voices together and y' all explaining that to these vendor relationships that you have will go a long way for us, in my opinion. And actually having. I see. I'm looking on the COVID 19 page now and how y' all have actually put people's phone numbers and emails, I think. I think that's really good. That Y' all are doing that.

And that's going to continue to be updated on a day over day basis as we continue to get more feedback from our vendor partners, more feedback from industry stakeholders about what they're doing to support our dealers and our members in these uncertain times. So we feel like that's a big part of why we exist, is to connect dealers to resources. Yeah.

Is there anything we can be doing, Steve? Is there anything we can be doing as dealers to support you guys or to support each other just to kind of wrap this all up?

Yeah.

You know, we're not always just take, you know, dealers. We need to be contributing our voices and our efforts. What can we do?

Yeah, so that's a great question, and I think the answer to that is going to be totally different for every dealer. And let me, let me preface that by saying a lot of the feedback we're getting from dealers is as varied as the kind of dealers we have in our membership. So we had an NIADA board of directors call last Thursday, and I had every single member of our executive team, 10 dealers, and I went down the row and I said, please tell me how this is affecting your business. Specifically. It was across the board. Some guys are like, hey, my business is actually up. I'm coming off a great tax time. I'm coming off of, you know, I'm coming off a large amount of sales. Our business isn't affected by, you know, statewide shutdowns. So we're actually doing better this month, year over year than we did last year at this time. Other dealers are like, yeah, I just had to lay seven people off and I'm going to pick them back up in like 60 days, everything in between. So we're getting really a mixed bag of feedback in terms of how this is affecting our members and our dealers across the board. So I feel like part of the role of the association is in one way to kind of be all things to all people. If you're a buy here, pay here dealer, this is affecting you a little differently than if you're a retail dealer. If you're a franchise dealer, it's affecting you a little differently than the traditional retail. And buy here pay here dealers, buy here, pay here dealers are a little in a unique position because they still have the benefit of incoming payments. They're the bank. They control the relationship between their bank and their customers maybe a little differently than a retail dealer does. So the application from our perspective, has been across the board on this thing, which is why we also didn't want to go too quickly into the market, into the industry with certain specific things because Everybody's experience is 100% different right now.

Yeah, I agree. And we all have to bond together and we all have to work together, but we're so different in so many different areas that it's going to be hard. I do know that you are sending out text alerts for helping get things passed and calling our congressman. Do you, Is there a way to sign up for that?

Yes, as a matter of fact. Thank you for bringing that up. I was actually going to mention that if anybody wants to sign up for those text alerts, they're going to be informational only. We're not going to try and sell you anything. These are going to be like, you know, 911 type of, hey, we need your help. Here's a resource for you. Here's an update on what's going on. So if you want to text NIADA to 90500-95000 we will add your, your cell phone and your mobile device into those ongoing text alerts so that you can get the most up to date information as soon as we have it. So that's great.

Yeah, very good. Jeff, you got anything else?

That's it. Steve, thank you so much for your time. Seriously, so great. We do appreciate the work you guys are doing. Like you said, ever changing, ever changing. Yeah, we'll have to talk again later in the week and it's all going to be different.

It'll 100% be different. But yeah, happy to help in any way we can to clarify what's going on, to interpret how it may impact a dealer. But just know we're all in this thing together. And you know, I've said since day one, as the CEO of niada, we all do so much better as an industry when we're rowing in the same direction. And this is one of those unique opportunities where we're all trying to figure it out. We're all seeing the same White House updates on a daily basis and trying to interpret all the new information as best we can so that there's a viable, strong, independent auto dealer community on the other side of that. Whenever that is 30 days, 60 days, 90 days, whenever it is. We're working hard to make sure that the independent dealer community is as viable and as strong on the other side of this thing as it is right now. So that's our plan.

Thank you all and that's very important. Good way to end is this. This is the reason we've been paying dues for when things like this happen. So continue to be a member. Jeff and I are state members or national members, and we always have been. And this is the reason you do it right now, because this gives us backbone when we wouldn't typically have it 100%.

So. Yeah. And thanks again for all you guys do. If I think the other thing that's really important for us right now is ongoing, constant communication, and anything that we can do to help with that, we're happy to do. So.

Thank you, Steve.

In the meantime, keep fighting the good fight. We'll see you guys later.

Yes, sir.