PORTLAND, Ore.—For years, Nick Hodel has worked hard to help fellow tire dealers stay profitable and competitive.
A former retreader and retailer, Mr. Hodel co-founded Portland-based Northwest Tire Factory L.L.C.—a growing company made up of independent dealers who market together under a common identity and share profits.
As CEO of Northwest Tire Factory, Mr. Hodel describes the organization as an equitable company that was "made to make the independent tire dealer survive" and help put a few extra points on the bottom lines of its members. But beneath that serious, business-like tone is a laid-back mentality, as Mr. Hodel, an avid golfer, jokes about a putting green he had installed in front of Northwest Tire Factory's distribution center as a little diversion.
"It's nothing that gets used a lot," he insists with a laugh. "We've got a flagpole there with a little Tire Factory flag in it. We have the neighbors come down and putt once in a while, or I'll go out there once in a while."
Mr. Hodel's knowledge of tire retailing and his easygoing attitude certainly will be tested as he succeeds Tom Wright as president of the Tire Association of North America.
As TANA's top officer, Mr. Hodel will lead an association that is back in the black financially, has changed its structure by implementing popular elections of its board members and secretary, and recently has filled its executive vice president spot, naming Ross W. Kogel, who had held the post on an interim basis.
Mr. Hodel said he hopes that he can build on these positive achievements and accomplish much on behalf of TANA members.
Ready to work
What can TANA members expect during Mr. Hodel's term? Well, he admitted that he doesn't have a specific agenda, but he does expect to complete the development of training programs, particularly for off-the-road tire technicians.
Just this year, TANA introduced an in-store certification program for tire technicians using a CD- ROM and manual. The association currently is creating a similar program for OTR tire technicians on video and CD-ROM, said Mr. Hodel, who chaired TANA's training committee.
Mr. Kogel noted that the training and certification course for OTR techs should be available in early 2001.
For the most part, Mr. Hodel's presidency may very well mirror that of his predecessor, Mr. Wright, with whom Mr. Hodel worked closely in the past year.
"He has a good head on his shoulders, makes good decisions and is very responsive to the membership," Mr. Wright said of Mr. Hodel. "Those are the kind of things I look for in a leader."
Mr. Hodel said he'd like to see TANA's training courses become widely available to high schools and trade schools nationwide, something Mr. Wright also advocated. To date, TANA has sold more than 5,000 CD-ROMs to trade schools in North Carolina for use as a syllabus, Mr. Kogel told Tire Business.
Mr. Hodel also expects TANA to become more active on Capitol Hill in 2001 in light of the regulatory attention Congress is giving the tire industry due to the Firestone recall. He said TANA closely monitored the Tire Recall Enhancement Administrative and Documentation (TREAD) Act, which Congress recently passed.
The association lobbied the House to narrow criminal penalties against tire dealers who file an incomplete report to the National Highway Traffic Safety Administration concerning recalled tires that have caused death or serious bodily harm.
With the addition of Rebecca MacDicken as director of governmental affairs—and the lobbying firm of Ryan, Philips, Utrecht and MacKinnon on a temporary basis—TANA will keep members apprised of any legislation or proposed regulations that could be harmful to dealers, Mr. Hodel said.
"Everybody is looking at the liability side of everything anymore," Mr. Hodel said. "Punitive damages and all these crazy things that go along with running your little dealership can just drive a guy nuts. Hopefully, we can take some of that burden off their shoulders and be their watchdog for that kind of stuff."
Mr. Hodel also told Tire Business that, during his tenure, he would keep the door open for dialogue between TANA and the International Tire and Rubber Association regarding a merger. He recalled dinner table conversations with his father, a retreader, over the industry's need for two associations.
"I remember sitting around the dinner table when I was a kid and my father saying, `Why aren't the (American Retreaders Association) and the (National Tire Dealers & Retreaders Association) together?' I think that's something that could happen."
Taking care of business
A second-generation tire man, Mr. Hodel spent most of his youth working at his parents' retread shop in Portland. His father, Eric, bought the dealership in the early 1950s.
Nick Hodel took over the business during his early 20s after his father's death. He converted the company—Portland Tire Co.—to retail during the early 1970s at about the time when passenger retreading began to decline.
In the mid-1980s, Mr. Hodel and four other Portland tire dealers pooled their resources to buy large volumes of tires at discounted prices—prices they needed to remain competitive, but which they couldn't get operating individually.
The dealers would drive their trucks to a store operated by Al Taylor to haul tires back to their own stores and sell. Before long, other Portland dealers joined this nameless buying group, which today is known as Northwest Tire Factory—a growing operation with 135 locations in nine states.
Northwest Tire Factory got its name when the member dealers decided to advertise their stores under a single banner, Mr. Hodel said. By 1993, Northwest Tire Factory had its own warehouse and more than 35 members, so it began operating as a partnership until 1999, when it changed to a limited liability corporation.
Each of Northwest Tire Factory's stores carry Tire Factory signage and market together under that name. Mr. Taylor served as CEO of Northwest Tire Factory until he retired in 1999 and was succeeded by Mr. Hodel.
Up until that time, Mr. Hodel—who sold his own dealership in 1995—worked as a jack-of-all-trades for Northwest Tire Factory, responsible for accounting and ordering.
Mr. Hodel said the firm differs from other dealer marketing groups in that "anybody and everybody that's a Tire Factory store owner is a partner in this company" and shares in the cooperative's profits.
"There's no way that one person can take control of this company because of the way it's set up," Mr. Hodel explained. "The largest individual doesn't own more than 4 percent of the total company. We don't allow that here."
The company looks for independent dealers who are known for good service and run clean shops, he said. The product mix doesn't matter, though auto service makes up 20-25 percent of a typical store's sales.
When a dealer agrees to join Northwest Tire Factory, he must put down $2,000 to start a capital account from which Tire Factory can draw for expansion.
The dealer also pays $350 per month into that account—but gets his full investment plus earnings back if he should leave Northwest Tire Factory or sell his store, Mr. Hodel said. An additional $200 per month covers warehouse, Internet and general supply fees.
No Northwest Tire Factory member—not even Mr. Hodel—can own more than 4 percent of the company. Thus, Mr. Hodel works for all of the company's members, who now number 100, and reports to a 15-member management committee elected by those members.
Northwest Tire Factory operates a 120,000-sq.-ft. distribution center that supplies members, though the company can arrange for direct shipments from the manufacturers to some stores, Mr. Hodel said, emphasizing that the company will sell tires only to members.
"I've got a lot of friends in the tire business that call me up once in a while and say, `Hey Nick, I'm in a pinch for these tires. Can I get some from you?' and I tell them no. They can go to one of our stores and buy from one of them, but we don't wholesale. We stick to and abide by that, and it's worked very well."
In the past year, Northwest Tire Factory added 28 stores to its ranks, in Northern California, Idaho, Montana, Utah and Nevada. Fifteen to 20 new stores are slated for 2001 in those states, plus Colorado and Wyoming.
Although Northwest Tire Factory now operates stores in Northern California, Mr. Hodel noted that Tire Factory Groupe in Southern California is a separate company, though the firms use the same logo.
Mr. Hodel said that the group will stay in the West and has no intention of progressing eastward, though he said the company has no specific expansion strategy.
"We want to grow because you don't want to go stagnant," he said. "I'm not going to say that we're going to put 20 stores on this year and 20 stores the year after.
"What we've found is that as our volumes go up, our prices get better. I don't know where the bottom is, so I guess we just keep growing until we find out."
He declined to disclose Northwest Tire Factory's sales—the company only recently began requiring all its members to report financial information to Tire Factory headquarters.
A dealer's tire man
"Anything he gets involved in, he does an excellent job.... He's very well-rounded in all phases of the tire business."
That's how Dick Nordness, executive director of the Northwest Tire Dealers Association, described Mr. Hodel, who is a past president of the Oregon branch of the NWTDA. Mr. Nordness noted that Mr. Hodel has chaired every committee for the Oregon association, has coordinated NWTDA trade shows and was instrumental in lobbying state legislators for a $1 tire fee that helped clean up Oregon's scrap tire piles.
Mr. Hodel credits his NWTDA participation for helping him befriend other tire dealers—some of whom became his partners in Tire Factory—and for teaching him much about tire retailing.
When Mr. Hodel is not managing Northwest Tire Factory or working on association business, he is golfing or attending his youngest son's high school football or basketball games. He and his wife of 23 years, Karen, have three children—two of whom are in college.
Asked whom he regards as his mentors, Mr. Hodel named his parents and Mr. Taylor, who helped him see the importance of remaining calm in the midst of daily pressures.
"He's the guy that's kept me off the blood pressure medicine," Mr. Hodel said, laughing. "When you consider that I have 100 bosses, I've got to keep a good attitude."