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Tonkin Reluctantly Ends Year As Dealers’ President

January 16, 1990

DETROIT (AP) _ A year ago the folks at automakers who deal with dealers tightened their seat belts. Ron Tonkin was on the way.

After a year of rebuking manufacturers for handcuffing dealers with too many rebates, mandatory advertising and subsidies, Tonkin is concluding his term as head of the National Automobile Dealers Association.

He doesn’t want to go.

″I’m not ready yet,″ said Tonkin, who owns several dealerships in his hometown of Portland, Ore. and elsewhere. ″The job just isn’t done. That’s my frustration.″

Tonkin may feel his chores are unfinished, but automakers and dealers acknowledge that manufacturer-retailer relationships changed during his tenure as president of the association.

″He’s certainly succeeded in bringing the level of awareness of dealer concerns up a notch or two,″ Chrysler Corp. marketing Vice President John Damoose said. ″Frankly, that’s good.″

Today’s relationship can be called adversarial.

″It is not a partnership,″ Tonkin said in a recent interview. ″Whatever may have once been a partnership unraveled long before my time.″

Tonkin said he hopes his blunt attitude continues when Ray Green of Jacksonville, Ill., takes over the presidency at the organization’s annual convention next month in Las Vegas.

Tonkin got off to a fast start as association president. On the day he was installed in New Orleans, he formed the ″Rough Riders,″ a group of 2,000 dealers assigned to scrutinize manufacturers like watchdogs.

″I’m more proud of the Rough Riders than anything else,″ Tonkin said. ″They alert us to anything that we should be addressing on behalf of the dealers. That’s been accomplished.″

Other problems Tonkin saw when he took office remain. Among them:

-Rebates. Tonkin said cash-back offers cripple dealers’ chances to bargain with customers and erode the dealer’s profit margin and the consumer’s chance to get a car at the best price.

″Not only the dealers, but the public is sick and tired of playing the games,″ he said.

-Mandatory advertising associations. Tonkin decried automakers for imposing a system that required dealers to pay for regional advertising. BMW recently dropped the requirement of its dealers, who were paying $300 a car into advertising associations.

″That was a small victory for us at NADA, but it is a victory,″ Tonkin said.

-Fleet subsidies. Dealers handling large fleet sales to corporations or rental car companies, for example, get subsidies from automakers because of the large orders. Tonkin claimed the manufacturers recover those costs by tacking hundreds of dollars onto the price of every new car.

″We haven’t broken their will to maintain their fleet subsidies, but we’re having some dialogue,″ he said.

Tonkin said he thinks his successor and others will ″keep the automakers’ feet to the fire.″ Otherwise, he said he’ll run again.

On Feb. 1, less than two weeks before he leaves office, Tonkin will address the board of directors of Chrysler Corp., the first dealer association president to directly meet with a Big Three board.

Tonkin said he thinks the automakers will be seeing a lot of the NADA in the years to come.

″I think Ray will end up being a very effective president,″ he said. ″And I think we have a very effective man following Ray (Frank Anderson of Raleigh, N.C., in 1991). And if I don’t think they’re effective, then I’ll run again.

″And in three years, (manufacturers) will have to look at me in Detroit again. The automakers don’t want that. So they sure better get along with these two.″

End adv for Monday Jan. 15

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