Over the decades, the National Automobile Dealers Association and its leaders have dealt with many crises. But for the first time, it's having to find a new leader during one.
CEO Peter Welch, who has led the association for the past seven years, announced last week that he will retire from the franchised-dealer trade group at the end of the year.
Welch, 67, said he will spend the rest of the year helping dealers work through the pandemic and assisting the board's search for his successor.
NADA'S 3 CHIEFS Over the last half-century, NADA has had 3 top leaders. The group has retained Spencer Stuart to help find its next CEO.
Frank McCarthy, 1968-2001
McCarthy led NADA for 33 years and is credited with building the association into a powerhouse on Capitol Hill and a voice for U.S. auto dealers and the industry. Under McCarthy’s leadership, NADA tripled its staff, and increased its net assets and cash on hand. He died of kidney cancer in 2001.
Phil Brady, 2001-2012
Brady steered NADA through multiple crises as CEO: the Sept. 11 terrorist attacks, the financial crisis in 2008 and the 2009 bankruptcies of General Motors and Chrysler. He now provides counsel to Kerrigan Advisors and its clients.
Peter Welch, 2013-2020
Welch has represented dealer interests for much of his career. He was previously CEO of the California New Car Dealers Association since 2003. He joined California’s dealer association in 1990 as its director of government and legal affairs. Before that, he was a partner with a Los Angeles law firm where he provided legal counsel to dealers. He plans to retire as CEO of NADA when his employment contract expires Dec. 31.
"It's time to start smelling the roses," he told Automotive News.
The association, based in Tysons, Va., has hired international search firm Spencer Stuart, as it did before hiring Welch. NADA's director-led search committee will include previous chairmen, potential future leaders and executives from other automobile trade associations, Welch said.
Welch expects candidate recommendations to be sent to the board of directors by early fall.
The Detroit native and former head of the California New Car Dealers Association - the largest state-level dealer group - leaves behind a skill set that will be hard to rival, NADA Chairman Rhett Ricart said.
"He's one in a million," Ricart said. "He has this ability to analyze and create strategies that work."
Under Welch's leadership, NADA streamlined its organization and modernized its approach by shedding cumbersome operations and focusing on what its 16,000-plus members deemed core to its mission on the legislative, regulatory and advocacy fronts.
Major changes early on under Welch included bulking up the public-affairs department, selling its NADA Used Car Guide to J.D. Power and exiting the retirement-planning business. The effort to slim down operations has reduced its staff from more than 350 to fewer than 180 employees today.
"There was a lot of dead weight that needed to be pruned out from the top to bottom," Welch said.
As soon as Welch started, he was in a legislative and regulatory battle, said David Westcott, the 2013 NADA chairman. The Consumer Financial Protection Bureau issued a notice in 2013 that sought to eliminate dealer discounts on auto loans.
"That sort of threw the financial auto-loan industry into chaos," said Westcott.
Welch and NADA argued that the guidance was flawed, and in 2018, Congress revoked it. It was "a war of attrition," Welch said.
NADA’s next CEO will also step into chaos — this time, it’s the uncertainty of the pandemic and the ensuring economic paralysis, as well as what recovery may look like.
With the challenges of a divided national government, the search committee is probably going to look for someone familiar with that environment, said Phil Brady, Welch’s predecessor, who was CEO of NADA from 2001 to 2012 and led the organization through crises from the 9/11 attacks through the global financial collapse.
He said Welch has a "real tenure to proud of."
Despite the complex challenges, Welch’s advice for his successor is simple: "Stay in shape and be proud," he said, noting the physical endurance needed for a position that requires extensive travel and many long days.
"Just do a great job while you’re there," he said. "Let the history books worry about how they’re going to remember you."