The American International Automobile Dealers Association (AIADA) has a lot to fight for lately. With both political parties in Washington, D.C., exhibiting frequent signs of dysfunction, it’s not a far stretch to say that America is left on shaky ground – and if not the country as a whole, then certainly sectors of it, including car dealerships.
Dealerships are an integral part of our economy, and have been ever since the U.S. first led the way for vehicle production and sales 100 years ago. Only Japan, at one time, and China, currently, have ever produced more cars than we have.
Today in America, there are 16,802 dealerships, employing 1.13 million people directly and another 1.27 million people indirectly. Of those, more than half (9,600) are international nameplate dealerships, with 578,000 Americans employed, plus another 548,000 indirectly. Total dealership payroll is $65.3 billion, with an average salary of $57,800.*
If President Trump’s 232 Auto Tariffs go into effect, it would spell big trouble for a big chunk of the economy and for hundreds of thousands of workers, not to mention the average consumer.
Just What Is an American Car?
As the line between domestic and import continues to blur – with many internationally branded autos and auto parts produced domestically, and vice versa – the need to seek and protect global trade increases.
AIADA recently scored a major victory when Hakes and AIADA President and CEO Cody Lusk were invited to the White House to meet with Vice President Mike Pence to discuss implications of the BAT (border adjustment tax). In part due to those talks, Trump decided not to include the BAT in his tax plan, saving a potential 20 percent tax on all imports. Hakes said the implications were huge – for example, a Camry made here in America could have still been taxed, because it didn’t have enough parts that were made domestically.
America currently builds more Camrys than Japan does.
Joining the Fight
AIADA was established in 1970 in response to government restrictions put on Volkswagen sales, which were booming at the time (its original name was the Volkswagen American Dealers Association). Shortly thereafter, membership was opened to any franchised dealer of imported automobiles.
As the only national trade association representing America’s almost 10,000 international nameplate automobile franchises in Washington, D.C., AIADA’s goal has always been to serve as an advocate for dealers before Congress, the White House, and federal agencies.
Hakes first got involved with the organization in early 1992, when his boss, Fritz Hitchcock, was named the new Chairman and invited Hakes to come along to Washington D.C. for the annual meeting. He has been involved since that point on.
Now, 27 years later, the gavel is being passed to Hakes at the 49th annual AIADA meeting in San Francisco.
From Cody Lusk, AIADA President and CEO: “AIADA is fortunate to have Howard at the helm in 2019. As an association representing international nameplate dealers, we face a number of challenges in Washington, D.C., particularly on trade and tariffs. Howard has the knowledge and good judgement needed to navigate those rough waters and protect his fellow dealers.”
Protecting the Dealers
When Hakes says he’s passionate about fighting for dealers, he means it. He knows how challenging (and rewarding) dealership work can be, having worked in all departments, representing many different nameplates, before becoming President of Hitchcock Automotive Resources.
Hakes would like to see dealers fully embrace smart technology, such as communication and customer experience platforms, to grow their business in the near future. AutoAlert is one solution that Hitchcock has seen consistent success with.
Hakes is clearly a people person. He has been involved in politics since high school, fighting for those he represents as he moved into the local, state, and even federal levels of government.
Also telling of his love for people is his service as a California licensed drug and alcohol counselor, for which he helped found a community-based coalition that helps people understand the dangers of addiction and lets them know where to get help. He counsels struggling adults with addictions a few nights a week. He also recently received a presidential appointment through the Department of Health and Human Services to one of the largest drug and alcohol prevention councils in the country, at a time when this type of service is so critical, with the nation battling addiction-related homelessness and record numbers of deaths from addiction.
For Hakes, the work he does at Hitchcock (what he calls his “day job”) is what allows him to give back in other ways. But what he really wants to see for dealers in America is a continued involvement in the fight.
If the tariffs are set later this year, it could lead to the loss of 117,500 dealership jobs, and of $66.5 billion in dealership revenue. Consumers have the potential to be hit, too, with imported vehicles costing on average up to $7,000 more, and U.S.-built vehicles increasing about $2,270 in price. That’s an average of approximately $78 more per car payment.**
The fight doesn’t end with tariffs, either. There are also trade deals to keep a close eye on, including the “NAFTA replacement,” USMCA; the U.S.-E.U. Trade Agreement; the U.S.-Japan Trade Agreement; and the U.S.-South Korea Trade Agreement, KORUS FTA.
*Sources: NADA & Here for America
**Source: LMC Automotive
- Contact your elected officials (find them at USA.gov/elected-officials) and tell them that as a dealer, you want Trump’s 232 Auto Tariffs thrown out.
- Educate yourself at AIADA.org.
- Attend an upcoming AIADA event. Learn more at AIADA.org/events.
- Talk to your employees to make sure that they’re educated.