A History of AIADA

For 40 years, AIADA has made a positive impact on the economic livelihood of the 10,000 international nameplate franchises it represents. Illustrated below is a chronological history of AIADA's efforts to promote the international auto industry's contributions to the U.S economy.


founders_imageOn September 10, the first meeting of the board of directors of the Volkswagen American Dealers Association (VADA) was held. The board elected the following officers: David H. Gezon, president; Bob McElwaine, executive vice president; Ken Sowles, vice president; Richard Kronman, secretary; and Bob Miller, treasurer. On November 1, Kathleen Mordini became VADA's first employee.


On September 15, President Richard Nixon announced a temporary 10 percent surcharge on imported products, suspended convertibility of the dollar into gold, and announced a 90-day freeze on U.S. wages and prices. He sought revaluation of the yen. The unintended consequence was a steep revaluation of the German mark, eventually pricing the Volkswagen Beetle out of the U.S. market.

In October, Sen. Vance Hartke and Rep. James Burke introduced legislation that would roll back the rate of automobile imports to the average from the 1965 to 1969 period and reduce shipments by a third.

Labor unions began to shift away from favoring free trade and sought restrictions on automobile imports in order to curb overseas investment by U.S companies and the export of U.S. technology.


On January 30, VADA widened its membership to include all import franchise automobile dealers, and changed its name to the American Imported Automobile Dealers Association (AIADA). Ken Sowles became the association's second president.


AIADA supported passage of the Trade Reform Act of 1975, a measure to expand world trade and reduce tariffs. AIADA also testified against protectionist amendments, including auto quotas.


AIADA opposed the United Auto Workers Union (UAW) demand for import auto quotas. The measure was defeated at the committee level.


On May 8, following a vote by the board of directors, AIADA became the American International Automobile Dealers Association, which reflected the increasing globalization of the auto industry.

Ford and UAW filed "escape clause" action with the International Trade Commission, which would have led to higher tariffs or quotas on auto imports. AIADA's testimony resulted in the ITC's rejection of the claim.


Senators John Danforth and Lloyd Bentsen introduced legislation imposing quotas on Japanese auto imports, which was later withdrawn following a trip by AIADA representatives to Japan for meetings with the Ministry of International Trade and Industry (MITI) and the Japanese Automobile Manufacturers Association (JAMA). Japan announced voluntary export restraints.


Porsche planned to terminate all dealer franchises and to appoint dealers as "agents" of the manufacturer. AIADA rallied dealer opposition and Porsche abandoned its plan.


AIADA led the legislative battle to defeat the domestic content requirement sought by UAW. The bill died in committee. A struggle over imports of gray market cars ensued. After AIADA waged a seven-year fight, Congress legislated controls over the gray market.


In retaliation to Brazilian trade barriers, the U.S. Trade Representative announced a 100 percent duty on Brazilian made Volkswagen Foxes. After AIADA intervened on behalf of dealers, the Fox was removed from the list of products subject to retaliation.


AIADA and other free trade groups joined the debate over the Trade Act of 1988, preventing its adoption.


Several cars, notably the Audi 5000, were plagued by claims of "unintended acceleration." AIADA joined dealers and manufacturers to correct public misinformation regarding the claims. In 1989, the National Highway Traffic Safety Administration (NHTSA) concluded its three-year study on the issue, acknowledging that "unintended acceleration is due to driver error."

U.S. customs announced that all imported passenger vans and sport utility vehicles would be classified as trucks and subject to a 25 percent tariff, raising prices on these vehicles by an average of $2,500 and costing the industry $2 million per day. AIADA condemned the decision – also known as the "chicken tax" – and spearheaded an effort to have it overturned. The U.S. Treasury Department intervened, declaring four-door minivans and sport utility vehicles exempt from the tariff.


AIADA joined an industry-wide effort to defeat a national alternative fuel vehicle production and sales mandate. Meanwhile, passage of a Luxury Excise Tax resulted in a ten-percent tax on five consumer items, including automobiles priced greater than $30,000.


AIADA rallied support for repeal of the Luxury Excise Tax, specifically as it related to automobiles.
The Johnston Energy Bill, which included a CAFE formula that would have discriminated against high mileage importers, failed to reach the Senate floor after opposition from the auto industry. AIADA also supported President George H.W. Bush's successful effort to extend congressional fast track authority.


AIADA successfully sidelined a Senate proposal to impose a 25 percent tariff on minivans and sport utility vehicles.


In response to fears that the Clinton administration would seek to reclassify import minivans and sport utility vehicles as cargo vehicles, AIADA launched a public relations effort to educate consumers and the administration on the harmful impact of reclassification.


In June, AIADA president Walter Huizenga and several member dealers testified before the United States Trade Representative Section 301 Committee on the impact that sanctions on thirteen Japanese import vehicles would have on American dealerships. Later that month, AIADA dealers, led by board chairman Kjell Bergh, traveled to Japan for meetings with U.S. embassy officials, Japanese government officials, auto manufacturers, and Japanese auto dealers. After tense, round-the-clock negotiations in Geneva, the U.S. and Japan struck an accord, which ended the crisis.


Congress and President Bill Clinton responded to international auto industry efforts by including a phase-out of the luxury tax in the Minimum Wage/Small Business Tax Relief Bill. The bill immediately lowered the tax from ten percent to nine percent, with subsequent reductions through 2002, at which point the tax was to be eliminated.


AIADA lobbied NHTSA regarding their proposal to allow air bag deactivation. On January 19, dealers were given the option of installing air bag on-off switches for customers with written authorization from NHTSA.


On June 15, AIADA testified before the U.S. International Trade Commission, calling for the elimination of the "chicken tax." Additionally, an AIADA representative attended World Trade Organization (WTO) talks in Seattle.


toyota_hybrid_billboardOn May 26, Congress approved a $1.3 trillion tax package that included a repeal of the death tax. AIADA lauded the provision as a victory for America's family-owned businesses.


Comprehensive energy legislation was unveiled, which set the stage for a year-long battle on national CAFE standards.


An AIADA-sponsored poll, conducted by McGlaughlin & Associates, found that 84 percent of Americans felt that the Death Tax was unfair.


On February 18, President George W. Bush signed the Class-Action Fairness Act of 2005, marking a critical step toward ending frivolous lawsuits.

AIADA leaders traveled to Thailand as part of a U.S. Trade Representative delegation to drum up support for a free trade agreement between the U.S. and Thailand.


uskoreaftaIn January, AIADA President Cody Lusk honored late chairman, Dave Mungenast, Sr., by renaming the association's Lifetime Achievement Award in his honor during AIADA's Annual Meeting and Luncheon in Las Vegas.

In May, AIADA hosted the first-ever International Auto Summit in Washington, D.C., bringing together dealers, industry leaders, and legislators.

On June 30, the U.S. and the Republic of Korea signed a free trade agreement which, pending final approval by Congress, would add $10 to 12 billion annual to the U.S. Gross Domestic Product.


JoeObrienrecievesawardIn January, the first-ever Dave F. Mungenast, Sr. Lifetime Achievement Award was presented to Joe O'Brien at the 2008 Annual Meeting and Luncheon in San Francisco.


As the U.S. recession deepened, auto sales fell more than 20 percent and Chrysler and General Motors declared bankruptcy. AIADA worked to loosen credit for dealers and helped organize the ground breaking federal Cash for Clunkers program.


Web_Paul_AtkinsonToyota executives were summoned to Capitol Hill in February and March for a series of Congressional hearings amid reports of unintended acceleration. AIADA helped organize a contingency of dealers who traveled to Washington to share with their elected officials first-hand account of how Toyota's dealerships were handling the recalls and repairs on the front lines.

After intense lobbying and advocacy efforts, in June, dealers successfully secured an exemption from new oversight in the finance reform conference report.


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