The Great Defender

William “Bill” C. Fox is the 2015 chairman of the National Automobile Dealers Association (NADA) and a partner with his sister, Jane, in Fox Dealerships Inc., a four-rooftop auto group with Chevrolet, Chrysler, Honda, Subaru and Toyota/Scion stores in the Central New York towns of Auburn and Phoenix.

A former college basketball player and licensed attorney, Fox joined the automotive industry and became a leading figure at the association level almost by chance. But he seized the opportunity to give back to his home region and lead U.S. dealers through a period marked by serious economic and regulatory threats.

F&I and Showroom sat down with Fox to learn about his circuitous journey to dealership and association leadership, ask how the NADA is tackling challenges to the franchised dealer model and get a snapshot of life as a dealer and businessman in Upstate and Central New York.

F&I: You joined the auto industry after practicing law for 12 years. Did you initially plan to continue practicing law and have a hand in running the dealerships?

Fox: The way it started was my sister, Jane, and I pooled whatever money we had in 1976 — and it wasn’t much — to buy a dealership and to provide our parents with a road to retirement. They were wholesalers who were constantly buying cars and cleaning them up and reselling them, and by the time they were in their mid-60s, they really had no retirement plan.

When we started, my sister was the dealer and I continued to practice law. I did represent some dealers and I had some idea of how stores were bought and sold and operated. And we were lucky. We bought a dealership that sold 100 cars a year. A few years later, we were selling 1,500 new and used cars.

Then an Oldsmobile/Cadillac dealership in Auburn, N.Y., became available. We entered into a contract with the seller, but General Motors had a rule that said no dealer could own two dealerships in the same area, so my sister was excluded. So I said, “Put it in my name.” Of course, GM said, “You can’t do that. You’re a lawyer!” So I had to go to dealer school.

I told my partners in the law firm that I was going to take a six-month leave of absence. At the end of the six months, I told them I wasn’t coming back. I did maintain my law license. I kept it because it was too hard to earn and too hard to give up.

F&I: How does your legal experience inform your work as a dealer?

Fox: This is just my opinion, but if you look back at who would traditionally become a car dealer, sales was the primary route. A good salesman would become a sales manager, then a general manager, and then buy out the existing dealer. In the last generation, we’ve seen that experience in different disciplines can be a substitute for being a good salesperson. The discipline of law and business training has been beneficial and served me well.

F&I: You have mentioned that you like to run your company like a team, drawing on your experience as a college basketball player at Georgetown.

Fox: Well, to be honest, I should never have gone to Georgetown. My parents couldn’t afford to send me there. I got in because a doctor friend of mine who had gone to Georgetown had naïve faith in me and got me in. I was afraid I was going to flunk out. I decided that trying out for the freshman basketball team would force some discipline on me. I was the last guy to make the freshman team, and only because I was three inches taller than the next guy. But they kept me, so by the time I was a senior, I got to sit on the varsity bench.

But I think sports teach discipline, and I think that discipline serves us well in any business. It’s team-building. At four dealerships today, we have about 200 employees. You can’t do it all. If you want to get ahead, you’ve got to build a team.

F&I: What inspired you to get involved at the association level?

Fox: It’s a funny story. My sister had been the chairman of the New York State Automobile Dealers Association. I saw how busy she was that year. It was a full-time job. But she committed to doing it. My job was to stay home and take care of the dealerships the year she was on the road.

I didn’t intend to be active in the association, but Bill Cramm, who became chairman after my sister, asked if I would do him a personal favor and serve as the director for the Central New York district. He said, “Three or four times a year, you go to a meeting in Albany. You don’t have to do what Jane did.” And so I started off on this merry path.

A good friend of mine, Mike Barnard from Newark, N.Y., was the NADA’s New York State director for nine years. Steve Scoville replaced Barnard for the next term and then stepped aside. I was with Barnard at a dinner in Rochester and I asked him if he thought I could do it. He said “Yes,” so I threw my name in, not realizing there was going to be an election, and I was up against Al Carbone, a dealer I had known for many years. I saw Carbone at the next meeting and said, “Al, you know, I don’t like running against you.” He said, “Me neither.” Then he stood up and said, “I withdraw!”

So I became the NADA’s New York State director by happenstance. And once I got in — it’s kind of like going to college. You know the other new directors, but everyone else has been there for at least one term. They know what they’re doing and they have friends. It takes a couple years to find your way. I started in 2006, and when I was just beginning to understand some of it, the financial crisis hit in 2008.

That’s when I began to understand the impact a trade association like the NADA can have. We were up on Capitol Hill. We ate the rubber chicken dinners and banged on doors. And so many of them didn’t know who we were. Some thought we represented the manufacturers. So thanks to the NADA — and I don’t mean to exclude any of the other forces that were brought to bear on Congress — I believe that’s how the industry was saved.

Did dealers get burned? Yes, some did. Did the manufacturers treat us all the same? Probably not. But the result is the auto industry rebounded, the surviving dealers are doing reasonably well and the economy is picking up steam. We’re lucky.

So, finally, in 2013, I was elected to be vice chairman. I knew going in what the job entailed. [Former NADA Vice Chairman and Chairman] Forrest McConnell was a great teacher. Our president, Peter Welch, is a great leader. We dealers are very fortunate to have that mix of people in our leadership. I hope the NADA is the voice of dealers for the next 100 years.

F&I: You have identified the threat to the franchised dealer model as your No. 1 concern. Are dealers winning that fight?

Fox: Local new-car dealerships provide the most competitive and most cost-effective way of buying and selling new cars for both car buyers and manufacturers. Dealerships create price competition that drives down prices, provide extra accountability in recalls and warranty claims and offer well-paying local jobs across the country. Yet, those consumer benefits of the dealer franchise network sometimes get lost. In June 2014, the NADA launched the “Get the Facts” initiative to inform car buyers, policymakers and the media about the benefits of the dealer franchise network. A series of videos, fact sheets and infographics are available at www.nada.org/getthefacts.

F&I: What about the Consumer Financial Protection Bureau (CFPB)? It seemed like the NADA and several lender trade groups scored major points with Congressional lawmakers with that Charles River Study.

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Fox: Passage of the pro-consumer bill by the House Financial Services Committee on July 29 was a major step toward rescinding the CFPB’s flawed guidance on indirect auto financing. The bill, H.R. 1737, passed by a bipartisan vote of 47-10, including 34 Republicans and 13 Democrats. We will continue our strong advocacy for CFPB reform on behalf of car buyers and dealers and will press to have H.R. 1737 considered by the full U.S. House later this year.

The study by Charles River Associates, which was commissioned by the American Financial Services Association, found that the CFPB’s proxy methodology used to determine alleged unintentional discrimination overestimates the African-American population by 41%. The CFPB’s own white paper on this subject also revealed errors as high as 20% in estimating an individual’s ethnicity.

F&I: What are your thoughts on the push toward a fully online vehicle sales transaction?

Fox: The Internet has made buying a car one of the most transparent purchases in retailing. Technology continues to change auto retailing and how we interact with our customers, but regardless of how it changes, running a successful dealership will always be about how well we take care of our customers both online and offline. Most car buyers prefer to shop on the Internet and then visit the dealership to handle a trade-in, take a test drive, explore their financing options and finalize the transaction.

F&I: Like many dealerships and dealer groups, Fox Dealerships is a family enterprise. What advice would you give to a dealer who is thinking about going into business with a family member?

Fox: First of all, it’s worked out that Jane and I don’t have kids who are going to be active in the business, so we have two younger guys we are committed to backing. The cornerstones to bringing in new people, whether it’s a family member or a trusted employee, are education and training. There are a variety of ways to get that education and training. You can go to law school (laughs), but that’s not the most popular way. The NADA offers the Dealer Academy, which is an incredible bargain. Get them out of the store and into the classroom environment. Also, the NADA 20 Groups are a great way for dealers to learn from one another.

So I think, if you’re going to bring someone along, it’s not just throwing them in the water without any training. It should be continuous and progressive, and the NADA offers a wide scope of opportunities that serve young people well.

F&I: What has been the highlight of your career as a dealer?

Fox: Certainly being able to serve as the NADA chairman this year is my highlight. It affords me the opportunity to give back, if you will. You run for vice chairman for the year and, if you win, you get to serve as chairman the next year. Everyone who runs gets to make a speech to the directors. The title of my speech was “Honor the Past, Embrace the Present and Shape the Future.” Shaping the future for those who come after us is my commitment. It has nothing to do with selling cars or making money. It’s the opportunity for my family, who didn’t have much, to have some success and impact the lives of a couple hundred employees. I like to think we’ve made their lives better and made the towns we serve better, and we can’t forget the young people coming after us.

F&I: Are there any times you would prefer to forget?

Fox: None. We’ve had some very hard times, don’t misunderstand me. Twenty percent interest was a down time. In 2008 and 2009, we saw good dealers who didn’t get treated fairly go out of business. That hurt. The Arab oil embargo and other political standoffs have hurt us.

Over the years, we’ve seen what I call “intrusion” into our business by different factors, including legislators, regulators, manufacturers and lending institutions. They have a big impact on dealers and that can be a huge and unnecessary burden.

But that’s why the public needs us. That’s why the franchised model works. We are the most cost-effective way to deliver those vehicles to the public. And we employ people, too, more than a million, at last count. And those are well-paying jobs. We are dealing with regulatory overburden in this day and age, but it’s our responsibility to educate those regulators and make them understand the consequences of their actions.

F&I: Can you identify any challenges and opportunities that are unique to Upstate or Central New York?

Fox: In 2006, Robert Wilmers, the chairman of M&T Bank, which is based in Buffalo, spoke to the New York State Automobile Dealers Association. I asked him for a copy [of the speech]. I use it a lot. I call it the “State of Upstate New York Address.” He said there are two economies in our state: Greater New York City and another that starts in Albany and covers the rest of the state.

Upstate New York is part of the Rust Belt, where blue-collar industries had been the backbone. It’s a stagnant economy with no growth. In the late ’90s and early 2000s, more than 200,000 young people left every year. But in the conclusion of his speech, Wilmers said, “M&T Bank is here for the long haul. We’re going to be a good citizen and make it better.”

Recently, I was lucky enough to be at a breakfast with the governor. He used Buffalo as a model for a revitalized economy. He said Rochester, Syracuse and Utica could be next, but each of those cities is different, and each will need a different plan to succeed.

Here in Auburn, we have no population growth, but we have three dealerships within a mile of each other. Each has grown dramatically in the last 10 years. We can help the Little League team and help the hospital. The pool of talent in this town is untapped. We hire people right out of high school. We bring them in and train them, and they can be very proficient at their jobs and succeed if they stick with it.

I think that Upstate New York and certainly Syracuse and Central New York have their problems. But we are blessed with good people and natural resources. We have countless colleges and corporations, and all of those are good incubators for talent. I hesitate to characterize the Northeast as a sleeping giant. But for Central New York, I recall that, when I was 21 and wanted to go off to the big city, my dad said, “Bill, you walk out the door, and what do you see? We’ve got clean air, clean water and no crime.” He was right. It’s awfully nice.

Bill Fox will deliver Industry Summit 2015's opening keynote address on Wednesday, Sept. 9, at 5 p.m. For details, visit www.industrysummit.com.

Originally posted on F&I and Showroom