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2007 NADA Washington Conference

What a Difference an Election Can Make

Daniel B. McLeod

Led by NHADA Chairman Bob Grappone and NADA Director Jack Tulley, a contingent of New Hampshire dealers, consisting of DEAC State Chairman Ken Plante and NHADA Vice Chairman Scott Holloway, along with incoming NHADA President Pete McNamara and me, headed to Washington in September to attend and participate in the annual NADA Washington Conference. As in past years, the specific purpose of the Washington Conference is for automobile dealers and Automotive Trade Association Executives (ATAEs) to lobby their Congressional Delegations on current issues facing dealers throughout the country as well as to increase the awareness and necessity of DEAC. 

This year there were two major issues that are of great interest to dealers and consumers. The first, and possibly the one that gets the most publicity, is the issue dealing with Corporate Average Fuel Economy (CAFÉ) standards. Congressional leaders hope to pass higher CAFE standards by the end of this year. President Bush has also indicated his support for higher vehicle fuel economy standards. To put it in perspective, current CAFE standards are 27.5 MPG for passenger cars and 22.5 MPG for light trucks for MY 2008. 

This past June, the United States Senate passed a CAFE increase requiring cars and trucks to achieve a combined 35 MPG for MY 2020. On the House side, Massachusetts Democrat Ed Markey introduced H.R. 1506, which would increase CAFE standards for cars and trucks to achieve a combined 35 MPG by MY 2018. Dealers have joined hands with manufacturers in an effort to support aggressive, but responsible, increases in CAFE standards. Both the Senate version and Representative Markey’s version are too drastic a measure and, if enacted, could dramatically reduce product mix and, therefore, create a negative impact on consumer choice. 

Dealers and manufacturers are now supporting H.R. 2927, sponsored by Representative Baron Hill (D-IN) and Representative Lee Terry (R-NE). H.R. 2927 requires separate standards for trucks and cars, which would be 32 MPG for trucks and 35 MPG for cars by MY 2022. While these standards are rigorous and aggressive, we believe this approach is attainable and is more consumer friendly.

For various reasons, I have always been reluctant to join hands in a legislative battle with our manufacturers. History has shown us that manufacturers say they can’t and then, somehow, they get it done. Frankly, the manufacturers need dealers to move Washington, because they cannot get it done on their own. I believe an alternative to drastic CAFE increases would be better for consumers and would, at the same time, reduce consumption of gasoline. 

The second issue, while not as controversial, deals with insurance companies and salvage vehicles. The devastating impact of Hurricane Katrina gave dealers an opportunity to highlight the potential problem with reintroducing hundreds of thousands of washed salvage titles to the marketplace. Dealers have worked with members of Congress to seek a workable disclosure solution; and, as a result, S. 545 and H.R. 1029 are bills that would require insurance companies to disclose the VIN of totaled vehicles to vehicle history providers at the time of payout to the consumer. A VIN-based system that would be made available to dealers is a lot more effective than trying to track damaged vehicles and paper titles that can be easily “washed” by fraudulent resellers to hide vehicle damage and gain higher resale profits. This solution to the salvage vehicle problem appears to be so simple that it often confuses me as to why Congress takes so much time to help eliminate this problem that impacts consumers and dealers.

With this information, on Tuesday, September 11, the NHADA contingency set out to meet with our Congressional Delegation on Capitol Hill (see October 2001 Dateline: NH article, “Reflections on September 11, 2001”). Our first meeting was with Senator Gregg, followed by Senator Sununu. In both instances, we met privately with the Senators in their offices and explained the dealers’ position on CAFE and salvage vehicles. Since the CAFE issue had already been passed by the Senate, we spent very little time discussing CAFE standards. Both Senators are supportive of passing VIN-based disclosure systems for salvage titles. As in past years, both Senators asked us, “What can I do for you?”; and both Senators asked, and there was considerable dialogue, “How’s business?” They seemed genuinely concerned that the retail auto business is in a downturn and understand that our business is a leading economic indicator. Simply put, understanding the condition of the retail motor vehicle business is a fundamental requirement to understanding the condition of the economy.

When we completed our visits with our Senators, we walked from the Senate side to the House side to meet with our two House members. Our first scheduled meeting was with Congresswoman Carol Shea-Porter; but instead of meeting with the Congresswoman, we met with two of Congresswoman Shea-Porter’s staff people – not in her office, but in the hallway directly outside of her office! This was a first for me. When we completed our discussion with her staff, I inquired whether or not the Congresswoman was in her office, whereupon one of the staffers indicated that he would find out. I stated that I had not met her before and would like to have that opportunity. Congresswoman Shea-Porter then emerged from her office, and we exchanged cordial greetings and had some discussion, still in the hallway, regarding our two key issues. She stated that she has signed on to the more rigorous CAFE standard bill but indicated that she would “take a look at H.R. 2927.” She seemed surprised when I mentioned to her that the more rigorous standards could create a “Cuban effect” in the United States. I explained the Cuban effect would be that individual consumers would keep their older, more polluting vehicles for longer periods of time because the newer vehicles would not meet the specific and necessary requirements for those consumers.

Following our meeting with Congresswoman Shea-Porter, we went over to the House Cannon Building to meet with Congressman Paul Hodes. We were all seated in Congressman Paul Hodes’ office and waited until he arrived 25 minutes late for our meeting. After cordial introductions, we stated our position on the CAFE issue; and from that point on, Congressman Hodes proceeded to lecture us on global warming, Japanese technology, and the failure of American manufacturers to engineer and produce higher fuel economy vehicles. We commented on the direct relationship to consumers purchasing smaller fuel-efficient vehicles and the price of gas and how any increase in the gas tax would impact consumer choices. Congressman Hodes then stated, “To Democrats, TAX is a four-letter word.” While I stated to the Congressman that we agree to disagree, we moved on to the next topic of VIN disclosure of salvage vehicles. He told us he would look into it, and he felt that we had a valid concern. 

Every year I report back to NHADA on our Congressional meetings; and, over the years, they have always been polite and cordial. (Maybe not all … former Mercedes dealer Red Abbott had a major disagreement with then Senator Warren Rudman on grey-market cars. I will never forget that meeting!)

While we can never expect our politicians to agree with all of our issues, I found it quite astounding that at no point in our conversations with Shea-Porter and Hodes did they inquire as to how our business was doing or ask what they could do for us. It kind of makes you feel they don’t care. 

All I can say is, “What a difference an election can make.”