AKRON (Dec. 10, 2015) — With the tire industry trending to mega-acquisitions and all-inclusive manufacturer- or supplier-provided dealer programs, is there still a place for trade associations for today's independent tire dealer?
And why aren't more young people interested in belonging to their friendly local, regional or national trade groups?
These are questions Tire Business looked into in light of the New Jersey State Tire Dealers Association's (NJSTDA) announcing in September it was going on hiatus. The NJSTDA put itself on hold indefinitely — largely due to industry consolidation and lack of member participation.
Alas, according to NJSTDA President Al Breese, the group's members haven't even seemed to notice.
“We haven't had any responses from any of the retailers or even any of the distributors,” he told Tire Business about the lackluster response to the association's hiatus. “Until we have interest, than there's no reason to try to continue on.”
- This article appears in the Dec. 7 issue of Tire Business.
Mr. Breese added that the group likely will have a meeting in March and try to get as many people to attend as possible.
Unfortunately for the industry, the NJSTDA isn't the only group that has struggled.
“It's a hard climate — there's been so many changes in the tire industry. There's been a shift from mom-and-pop-type establishments, independent tire dealers, to mass merchandisers and large entities like Mavis Tire. So it's hard. It's hard to keep the membership up. It's dwindling.”
One of the most frequent comments Tire Business heard from industry associations regarding membership is that there is a lack of interest in the groups especially among younger generations coming up in the business. Mr. Breese also emphasized this is a problem.
“We want the association to continue and to thrive, but we need participation to make that happen,” he said. “We'd like to keep it going, but we can't get the interest of the next generation.”
Other associations also are looking for ways to get the younger generations involved to help boost membership.
“We're getting some younger people involved now, which should help, but it's hard to say,” said Ernie Caramanico, president of the NYTDA.
“I can't figure it out. I wish I could figure it out. I've been wrapping my head against the wall for years trying to figure this out.”
Part of the problem may be that the older generations no longer have time to run the associations—or are retiring from the business—and no one is picking up the slack.
“It always takes a group of at least five or six people to really make something like that work,” said Aaron Telle, owner, Telle Tire & Auto Service in Fenton, Mo., and former treasurer for the Missouri Tire Industry Association (2010-2011).
“So those guys are probably looking to the young guys going, ‘Hey, it's your turn. We've been doing this for the last 25 years.'
“They still want to go. They're still going to (meetings), the older guys. It's just nobody else is really stepping in and taking control and trying to take it back to where it used to be.”
Mr. Breese added that in New Jersey, “no one has really stepped forward to say ‘Let me take over the reins and get it going and bring some new ideas.'”
David Stevens, managing director for the Tire Retread & Repair Information Bureau (TRIB), said he's been to a lot of meetings with association executives who state that their big challenge is trying to rely on their values and how it's generating membership to that next group of potential members.
“Whereas before, it was always that early generation being a member of an association was almost like…it was an obligation,” he said. “But as we've come further down, in terms of the age groups, many of those guys are saying, ‘Well I don't really understand, I don't quite feel that obligation. Like, what are they doing for me? What's the value?'”
The generations coming up are not as prone to be member-oriented people, Mr. Stevens added. There is so much being done over the phone and on the Internet now that many of them may not see the value in getting together for a trade show or conference.
Another critical issue associations face is that many independent tire dealerships are being acquired or merging with other companies.
Mr. Breese said while he does not want to say associations will go by the wayside, with more companies being owned by larger companies, “there's very little ownership of the individual locations. It's owned by a financial corporation.”
If many locations have the same upper management, then store managers do not have a reason to attend association meetings or their bosses don't have them attend. Mr. Breese said he understands this trend and sees it in New Jersey.
The number of single-outlet tire shops is declining, which has had a major impact on local tire dealer associations.
The NJTDA slogan explained that it was dedicated to the retail tire dealer, Mr. Breese said. “And the retail tire industry is becoming a conglomerate…. The multi-location is surviving. The individual, small retail location is surviving, but not growing. It's in a decline. And I would think that's pretty much the case nationwide.”
Mr. Telle also points to industry consolidation as a contributing factor to association decline.
“More and more of the Monros (Muffler Brake Inc.) of the world are out there buying these one- or two-outlet stores that have been around for many years,” he said.
“With that consolidation, I think you're going to have fewer people. Those (dealer) organizations were always meant to help the big guys and the little guys, but I felt the one- to four-outlet places really valued those (associations) back in the day because it was an opportunity for them to get resources that otherwise they might not have.
“When you start getting consolidation, there's just less of a pool of people going to these trade shows. If you don't have the right amount of people there, I think the quality of the organization goes down.”
Other similar programs
Previously, going to an association meeting provided a tire dealer with much information than he or she could get elsewhere. Now, many tire manufacturers—and even some of the larger tire retailing companies and distributors—are providing this type of information to their customers.
“It's a catch 22,” said the NYTDA's Ms. Cimino.
“There are a lot of companies like Bridgestone, like Goodyear, some of the auto parts stores. They come to the plate offering you everything from them — credit cards, they give you discounts on buying supplies through them. So what happened is if you can get a price point to get oil filters, and oil and other lubricants from Goodyear because you're a Goodyear Tire & Service Network dealer, it cuts out the local guy from supplying you. So what do you need another organization for?
“If you're not big enough or you can't become a Tire & Service Network dealer, you get squeezed out and you need to look elsewhere. Sometimes it's available, sometimes it's not. Sometimes you can't compete with the dealer programs through the tire companies. They're excellent. If you can afford to pay them for it and join it and do it, it's great. I think that's part of the demise” of trade groups.
Mr. Breese shared a similar sentiment, explaining the programs offered by tire manufacturers compare with what an association can offer — and that can lead to a decline in the value of an association.
Mr. Telle said the rise of so-called “20 Groups” also provide competition for associations.
“That's really the new, popular thing, where there's another source now that allows you to meet other tire dealers and talk about business in a business setting,” he said. “People don't feel like they have the competition.”
There's a lot of overlapping in the benefits various organizations provide a dealer, including through a parts distributor, Mr. Telle added. But on a larger scale, the rebate checks or high-quality training are coming from the likes of Bridgestone Americas or NAPA Auto Care, etc.
“So for us, we still value (state associations) and we still value the training and the benefits of these types of organizations,” he said, “but instead of going to the Missouri Tire Industry Association we're going to our vendors.
“It's a better value for us to be able to do that as well.”
When working with the Missouri association, Mr. Telle tried to get the word out about what the group does and provides to members, but ultimately the effort failed.
“I even wrote a couple of articles about trying to get younger membership involved and the importance of it. I was hands-on talking to dealers, and I didn't even make 5 percent progress in our membership or creating a value there, so I got pretty discouraged,” he admitted.
The good news
Despite the difficulties many associations have faced in recent years, some still appear to be going strong.
The New England Tire & Service Association (NETSA), for instance, has seen its member locations grow to 574—an all-time high, according to Dick Cole, the group's executive director.
Mr. Cole said the group's progress over the years has been relatively stagnant, but steady.
“We've been losing on average probably 12 to 15 (stores) a year and gaining maybe 15 to 18, so in other words our net has been growing very slowly, but it's still growing,” he told Tire Business.
The group's secret to success? A large membership board, Mr. Cole said, noting “we're certainly always concerned” when other associations experience what the NJSTDA has—“whether they be in our industry or other industries….
“Honestly, my feeling is that our biggest strength has come from the number of directors that we have, board members. We currently have 23, we can have up to 30, and we try to keep it somewhere between 20 to 25.”
Mr. Cole said board members are instrumental in keeping the association vibrant by taking the time to speak with dealers and vendors and reaching out to them. He said that it's very difficult for an association with few leaders to keep a group of people “fired up and ready to go.”
“There's just no way that one person or even 10 people are going to keep an organization vibrant, in my opinion,” he continued. “I know that a lot of associations have very few board members thinking that, ‘OK, we can control it better that way and keep things moving.'
“Our position has been — and it's worked quite well — that we encourage many people's conversations, ideas, thoughts and so forth: It keeps the organization vibrant. Our typical board meeting averages about 18 to 20 attendees of those 23 (members).”
Benefits to dealers
While associations are competing against a variety of different avenues of assistance for tire dealers, there are still some real benefits to being in an association.
“I still believe very strongly that associations are needed...,” Mr. Cole said. “I'm familiar with what's going on, what most of the smaller guys are having problems with and so forth, and I know that an association — both regional or state and TIA (Tire Industry Association) — is extremely important to the survival of, especially, the smaller association members.”
One of the largest benefits is keeping up-to-date on local legislation that could affect members.
“I think the main draw for me now—and truthfully the only reason why we're still members of these organizations — comes down to legislation,” Mr. Telle said.
“Washington, D.C., state legislation that our state organization — while weak on a lot of fronts — when there's legislation that comes up in the House and the state, we're getting emails keeping us abreast to what's going on.
“They're sending down representation to talk on behalf of the 250 or 300 members about how it will affect us. We have a voice there.”
Mr. Telle said it is important to him to know that if there ever is a legislative issue that is extremely important to his concerns, he would have a source — in the form of a trade group — to go to for information.
On a national legislative level, Mr. Breese said TIA handles those matters, but state associations can deal with issues that locally affect a tire dealer. But the association needs feedback.
“We're limited to what is the interest of the local associations, local retailers, and they don't even tell us what that is because they're not there to participate,” the NJSTDA executive said.
As Tire Business sifted through feedback from various trade groups in compiling its annual directory of associations, there are still some going strong. Surveys indicated many dealers across the country are facing the same issues and look to their local association for assistance. Topics of concern range from scrap tire recycling to tire registration.
Some associations say their biggest way to cull new members is through word-of-mouth advertising and mailings. One other suggestion for reaching new members is to have board members make personal contact with potential members at least quarterly.
Also, adding benefits that a small dealership may not be able to get elsewhere — such as health insurance plans, workers' comp safety groups, etc. — may be a benefit that will drive new members, they said.
Whether that is enough to stave off the end of more tire dealer associations remains to be seen.