Meet Jeff Carlson, president of Colorado’s Glenwood Springs Ford, Glenwood Springs Subaru and Summit Ford, and the NADA’s 2016 chairman. Assuming the chairmanship of the National Automobile Dealers Association (NADA) in a year that will almost certainly see another record-breaking performance for new-vehicle sales and seismic compliance shifts is no easy task. Enter Jeffrey B. Carlson, president of Glenwood Springs (Colo.) Ford, Glenwood Springs Subaru and Summit Ford in Silverthorne, Colo.
After a year as vice chair and more than a decade representing Colorado’s new-car dealers on the NADA’s board of directors, Carlson is poised to lead the organization’s membership through a period of prosperity and uncertainty. F&I and Showroom sat down with Carlson on the eve of the NADA Convention & Expo in Las Vegas to get a behind-the-scenes look at his career as a dealer and association member and the year — and work — that lies ahead.
F&I: Where are you from and how did you get into the car business?
Carlson: I was born and raised in Greeley, Colo., making me a native Coloradoan. After working my way through college driving a beer truck, I went to work for Ford Motor Co. in the Denver district sales office, where a gentleman by the name of Jack Nilsson hired me. I held almost all of the training positions at Ford. I became a zone sales rep after about two years and called on the Ford dealers in Wyoming.
From there, I was transferred to Claycomo, Mo., where I moved into a business management position. Ford, as I have always said, provided excellent training and contacting dealers hooked me on the business. In 1979, I had an opportunity to go into retail in Glenwood Springs, Colo., where Nilsson had become a dealer. And, yes, he hired me again.
F&I: How many vehicles did you sell last year and how many people do your dealerships employ?
Carlson: Our three mountain stores, which include two Ford dealerships and a Subaru dealership, sold just under 2,500 new and used vehicles in 2015. The mix is mostly trucks and SUVs. We employ 105 people.
F&I: What separates you from your competitors?
Carlson: Mountains. Really big mountains. Seriously, we have operated for a long time in a relatively small market of about 45,000 folks. Over the years, we have developed long-term relationships with many in the community through our involvement philosophy, which is to provide support to everyone at some level who comes in with a legitimate request. We also encourage our employees to get involved in organizations that support our communities.
F&I: What is unique about doing business in Colorado?
Carlson: The elevation of Glenwood Springs is about 5,920 feet, and in Silverthorne, Colo., it’s 9,000 feet. Altitude is one thing, but attitude is the other. We have a laid-back, healthy, upscale, outdoor recreation and environmentally conscious lifestyle, which is why Ford and Subaru are excellent products in the market.
F&I: How long have you been involved at the association level?
Carlson: I was elected to the Colorado Automobile Dealers Association as a director in 1988 and chaired the association in 2001. I was elected to the NADA’s board as an interim director in 2004 and have remained seated since then. That’s about 28 years, off and on.
F&I: How are you able to serve at the highest level of a dealer association and run your business at the same time?
Carlson: Two things: First, I have excellent, well-trained, general manager graduates from the NADA Academy running the stores, and most of my second-tier managers are NADA Academy grads, too. My general managers also have an equity interest in the business. The second thing is technology. We all manage our businesses remotely with smart technology.
F&I: What did you learn in your year as the NADA’s vice chairman?
Carlson: I learned to refocus on the consumer, because without them, dealers have nothing. Our industry is huge, dynamic and diverse, and we represent an association of about 16,500 new-car and medium- and heavy-duty truck dealerships in the United States with different business models, attitudes and brands that serve our customers.
The association’s job is to figure out how we can best serve our members by advocating in Washington, D.C., advocating with our manufacturers and advocating for our customers. We have to offer the best services to our dealer members in education and information, and constantly drive vitality into the organization to enhance the consumer experience.
F&I: It seems market watchers and Wall Street analysts are becoming concerned about the state of the automotive industry, as they peppered both publicly traded dealer groups and finance sources about a possible slowdown in new-vehicle sales and issues facing the used-vehicle segment. Some have even likened the direction of the market to the years leading up to the Great Recession. What’s your take?
Carlson: The seasonally adjusted annual rate for February was 17.5 million new light vehicles, putting us up 3.4% over last year’s record. In past years since the downturn, we have had worse headwinds than we faced at the start the year. Low fuel prices, low interest rates, improving employment and consumer confidence should provide enough momentum for another record. But if not, will we be able to survive a 17-million market or less? Absolutely.
F&I: What’s your take on the Federal Trade Commission (FTC)’s announcement in January that it wants to study the car-buying experience by interviewing recent car buyers?
Carlson: As we told the FTC, we’re a bit confounded by this exercise. Consider that, less than four years ago, the commission concluded an extraordinarily broad and comprehensive examination of the same question. In fact, looking back at the 2011 FTC Roundtables, which were designed “to explore consumer protection issues pertaining to motor vehicle sales and leasing,” it’s hard to imagine how the FTC could have conducted a more thorough review of the issue. So it’s difficult to see what value to taxpayers or consumers further examination of this topic would actually provide.
But perhaps the most troubling aspect of this is that the FTC notice completely overlooks the fact that a number of credible, quantitative surveys asking this very question have been conducted in recent years. They found a very high level of consumer satisfaction with the dealership experience.
For example, J.D. Power’s November 2015 U.S. Sales Satisfaction Index Study, which surveyed 27,831 consumers, found that 80% rated their overall experience purchasing a new vehicle at a dealership as “truly exceptional” or “outstanding,” and 87% stated they either definitely or probably will purchase or lease a vehicle in the future from the same dealer.
And in January, a Car and Driver’s survey of 4,977 consumers found that 80% were “very satisfied” or “extremely satisfied” with their dealership experience. So the bottom line is that this data already exists, and it shows that dealers are doing a very, very good job taking care of their customers.
F&I: The FTC also recently hosted an event featuring panel discussions regarding dealer franchise laws. What’s going on here?
Carlson: This is another area the NADA has voiced its concern directly with the FTC. Some of our concern stems from the fact that, to date, this appears to be an imbalanced proceeding designed to reach a predetermined conclusion about auto retailing. And that is truly regrettable, because good public policy can only arise out of an informed, objective and impartial process, and the FTC’s January workshop was anything but.
Although we have process concerns about this workshop, we submitted comprehensive comments laying out a number of very, very critical facts about auto retailing that need to be considered in reaching an informed conclusion about the true value of the franchised-dealer distribution system.
The first is that franchised new-car and -truck dealers make the automotive retail market intensely competitive, which benefits both consumers and manufacturers. The second is that there is fact-based evidence demonstrating that the competitive nature of the franchised dealer network saves consumers money. In 2015, the Phoenix Center for Advanced Legal & Economic Public Policy Studies examined hundreds of thousands of car sales transactions and found that having multiple same-brand dealers (intrabrand competition) competing in close proximity produced significant price reductions for consumers — often in the hundreds of dollars per sale. For example, having multiple independent dealers competing within a 30-mile radius lowered the price of a new Honda Accord by about $500. Simply put, more auto dealers means lower prices for consumers.
Third, there are legitimate market and public-policy justifications for franchise laws. It’s these laws that create competition that lowers prices, create extra accountability when warranty and recall issues arise, and promote local ownership of key businesses in local communities that create living-wage jobs.
F&I: Where are we at with the Consumer Financial Protection Bureau? It seems like the regulator was on the ropes, with Republican members of the House Financial Services Committee really taking shots at the bureau. Then the agreement between Toyota, the CFPB and the Justice Department was announced.
Carlson: There is no doubt that the CFPB is under intense scrutiny for the documented way it has manipulated and ignored data in its attempt to regulate through enforcement action. But remember that this scrutiny is bipartisan. In fact, legislation to protect consumers by bringing transparency and accountability to the CFPB’s regulation of the auto finance market passed the House of Representatives in November by a vote of 332-96, which included the support of 88 Democrats.
And thanks to Sen. Jerry Moran (R-Kan.), that bill is now in the Senate. On March 10, Sen. Moran introduced S. 2663, the Senate version of the “Reforming CFPB Indirect Auto Financing Guidance Act.” NADA was incredibly encouraged by the strong bipartisan support H.R. 1737 received, and we view the advancing of this legislation as a clear indication of the substantial support that exists in Congress for protecting consumers when it comes to auto financing.
With regard to the agency’s enforcement actions against some auto lenders, it’s extremely disappointing that the CFPB has continued to further confuse the regulatory landscape through a succession of varying sue-and-settle agreements. It’s also disappointing that many of these enforcement actions are making auto loans more expensive for many consumers and harming many of the very people the agency is trying to help.
That is why our focus on this issue continues to be on getting the CFPB to acknowledge and embrace a single solution developed by the U.S. Department of Justice. It fully addresses fair credit risk across the entire auto finance market without needlessly harming consumers.
F&I: What is the No. 1 item on your agenda for 2016?
Carlson: Preserving vehicle affordability for our customers is a top priority. Vehicle affordability must be a bedrock principle for national policymakers. Affordability expands consumer choice and drives consumer acceptance, which drives fleet turnover. And fleet turnover results in the goals of economic growth, improved fuel efficiency and safer vehicles on the roads and highways that the industry and policymakers are striving to achieve.