Why Dealers Are Rallying Behind the Connected Vehicle Security Act

As Congress considers new legislation targeting Chinese-connected vehicles, dealers are being called on to play a more active role in shaping the future of the automotive industry. In this episode, Don Hall, President of the Virginia Automobile Dealers Association (VADA), discusses the Connected Vehicle Security Act, the importance of dealer advocacy, and the broader challenges facing the franchise system.

Hall explains why he supports the bipartisan legislation, why dealer engagement will be critical as the bill moves through Congress, and how retailers can help protect the franchise model amid growing pressure from direct-to-consumer sales. He also shares why stronger customer experiences and greater industry participation will be essential to preserving the dealer network for years to come.

Key discussion points:

• What the Connected Vehicle Security Act means for dealers
• Why dealer advocacy is critical as the legislation advances
• The importance of having automotive retailers represented in government
• How direct-to-consumer sales continue to challenge the franchise model
• Why delivering a better customer experience strengthens the dealer network
• How dealers can get involved through state associations and industry organizations

Hall offers a call to action for dealers to stay engaged in advocacy efforts while preparing for the industry's next chapter.

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Transcript

Why Chinese Cars Raise Alarm

Jim Fitzpatrick 0:06

Welcome to Inside Automotive with Jim Fitzpatrick. Hey everyone, Jim Fitzpatrick. Thanks so much for joining me this morning here at CBT News. I'm joined by the one and only Don Hall, CEO of the Virginia Auto Deals Association. If you don't know this young man, then you are not in the industry because he's uh done great work for all of us in the industry. He is a great voice, Don, uh speaking on major issues that impact car dealers, uh, not just in Virginia, but nationwide. One of those issues is the notion that Chinese vehicles could be sold in the U.S. And you say over my dead body, and it seems as though uh Senator Bernie Marino agrees with you and had uh great success yesterday uh in the Senate to get a bill passed to say we're going to, in his words, hermetically seal the country so that Chinese vehicles cannot be sold uh in the country. So uh I figured I'd bring you on because you and I have had some colorful uh maybe debates over this particular issue, which I've always enjoyed. You always bring up great, great points on this. But uh so what what did you think when you saw this yesterday?

Don Hall 1:16

Well, first and foremost, to all your listeners, uh let me say Jim is a patriot. He does love America.

Jim Fitzpatrick 1:23

Umtrary to what you think he believes about Chinese vehicles.

Don Hall 1:28

Yeah, well, exactly. I I'm not sure about Jim when it comes to that. But look, Senate Bill 44 uh 29, which was uh Senator Morano's and Senator Slotkin's bill, a Republican and a Democrat, is a great bill. I did have the privilege of of watching it yesterday as it was unanimous coming out of the committee, and it would prevent the Chinese from selling in this country. I was even somewhat astounded to hear yesterday the huge numbers of sales taking place over in Europe. Yes. It's massive. Yes. The Chinese are real and they're for real, and they're playing a tough game. We are Americans. The Chinese are not our friends, they're not here to do us good or make us better in the transportation business. I do not trust them. This bill is good. Senator Morano did an excellent job of explaining it. And Jim, people have asked me, so where are we in this process now? Right. Let me use an analogy that all of us understand. And just to remind your viewers, I've spent the last 47 years of my life in the auto industry loving and supporting this industry greatly. And that is right now, if you will, the bill is at a point where a customer, to use an analogy, has landed on a car. But we are far from getting things done and far from that car going over the curb, busting bugs, as we used to say when I was a young guy.

Jim Fitzpatrick 2:46

Burning gas, busting bugs.

Don Hall 2:48

Exactly. And so even though the bill came out of committee unanimously, it is a long ways away from being done. And I'm happy to comment about NADA and others when it when that's appropriate, Jim. But uh we're a long ways away from being done for sure. This is the beginning of it, but it should be done. And I'm grateful that the senators, both senators, showed a lot of leadership, a lot of maturity

Senate Bill 4429 And The Long Road

Don Hall 3:12

and expertise and and so forth, and did well uh with their their fellow uh senators in committee.

Jim Fitzpatrick 3:18

Yeah, this seems to be a bipartisan uh bill that that that and uh uh and it's got bipartisan support, I should say, on this. Um uh and of course, with Slotkin and Marino both being from states that have got huge uh contingencies of uh you know union workers and auto workers uh in factories in both Ohio and Michigan, they should be at the forefront of this bill, right?

Don Hall 3:43

You know, I I again back to your listeners. I love it when Jim says that. I love it when he says what he just said. Why? What's it? It's true. It's true. The reason they're doing it is because they got a bunch of people. I mean, you didn't see the Senator from New Mexico jumping up and down on this thing. In America, Jim, they believe in our system. They believe that the Chinese are not here to do good by us. Uh they are good, solid Americans. And thank goodness, one of the unique times in our lives, even the unions are in support of this legislation. Right. They want to protect their way of life. We have to protect our manufacturers in this country to include the the Japanese and the Koreans from the Chinese that are not our friends.

Jim Fitzpatrick 4:26

Now, were they our friends when we sent 50 million uh domestic built cars to China in the last 20 years? I mean, that that's a pretty good friend right there. 50 million vehicles.

Don Hall 4:38

Here's the difference. I believe, and I want to believe, that we Americans would not be doing what they're capable of doing in this country, not only tracking us and knowing about what we're doing, where we're doing, but also have the ability to literally, for lack of a better term, hit the kill switch on all vehicles in in the U.S. that are Chinese. Now, again, some will say, Oh, Don, the the the wall is not coming down, this is not gonna happen. Ladies and gentlemen, I'm not sure. I didn't say that, by the way.

Jim Fitzpatrick 5:02

You you said other people said, I understand.

Don Hall 5:04

The history of the world says that unfortunately conflict is inevitable, and it's happened throughout our history as a country. China is not our friend. We ought not to let them in this country, period. They stole much of our technology, and thus they're coming back to compete to under underwrite the market. Remember, we're not talking Jim and Don, who are manufacturers, who came up with a brilliant idea. We're talking about the Communist Party who is behind this. They'll underwrite all losses, all tariffs, and so forth. And so at the end of the day, the Chinese are not here to do us a favor.

Jim Fitzpatrick 5:39

What what do you say to the people that are listening and say, well, I hear what you're saying? How come we're we're stopping at cars and and not um 300 million cell phones that are built in in China or all of the other products that are built in China? What uh how come we stopped at cars and said, Okay, that's it. We see we see cell phones and TVs and almost everything else. GE appliances are owned by the Chinese. Um

National Security And The Kill Switch

Jim Fitzpatrick 6:04

what how come cars?

Don Hall 6:06

Jim, it's I think it's a great question. At the end of the day, look look, I I can't speak to why others have not put their foot down. I think there's probably some regret uh on some of those manufacturers you've spoken about. But the reality is that we are lucky, and let me stop for a just a brief moment. This country is going a lot of underchanged changes, if you will, in government, who we're electing, the kind of parties they're coming from. Boy, oh boy, we've learned a valuable lesson, ladies and gentlemen, and that is this. Having a car dealer, and we have other car dealers in Congress as well, but having Senator Morano in the Senate serving our nation, but more importantly, coming from the automotive background is critical. We need more car dealers to say it's time for me to stand up against things that aren't right and run for office and make a difference. Yeah, this is what the senator has done. We are grateful for that. We need others to follow suit. And the fact is, I think he is wise enough to recognize, and others are, that it may go on, as Jim has said, and he's right, with phones and other appliances and so forth. This is cars. We are car experts. We will do everything within our power to stop the Chinese as car experts. God bless uh Senator Morano and the others that are involved in this um this tough fight ahead of us.

Jim Fitzpatrick 7:21

Yeah, I agree. There's no question having um uh Senator Marino in the in the right there fighting the good fight for dealers. It's about time that we have uh somebody representing dealers and and have uh we uh dealers have got a voice and a friend in in Senator Marino. There's no question about it. I mean, he's uh and it's not just on this issue, it's on so many other issues that he's fighting for uh not just the auto industry, but specifically for auto retailers, you know, franchise dealers out there. And uh so you know it it's it's it's great having him there. And it would be great if we had more car dealers, you know, for you car dealers that are listening that are on the fence about possibly running, run, jump in. Look at you know, Senator Marino did it, and uh great car guy, great uh career in the auto industry. Um his son is now uh a Mercedes-Benz dealer, I think the youngest in the country, uh Kevin uh Marino doing unbelievable work. And uh uh so yeah, we we need we need more repres representation. And look what happens when we have representation um in the Senate or in in Congress. And I know that there's a c I think there's a couple of congressmen that are also also auto dealers, which is great. We just need more of them, right?

Don Hall 8:29

And and Jim, j just like yourself and myself having a retail background, you learn to be quicker on your feet. And you're learning how to assess and read people and situations. It is a talent that we learn in the auto industry, how to work with people, how to understand people from all walks of life, and be able to deliver them a great buying experience or service experience. And the good senator yesterday showed that he's very good on his feet. He's very good without having a script, but could actually talk from the heart and make statements that were powerful and very insightful about our industry, and we need that. And so if anything, I hope today's message is if you don't like the way things are, dealers, it's time to get off your backside. It's time to get to work, put your money where your mouth is, help those get elected, but more importantly, you run for office. We need you to serve.

Jim Fitzpatrick 9:19

Yeah. What do you say to the dealers that are watching that goes, we think Don should run for office because that because you are like you'd you'd make a perfect congressman or senator from the great state of Virginia?

Don Hall 9:31

Well, I I I had the blessing of being exactly to the month and year ten years younger than our current president. Uh June of 1956, I was born, 70 years ago. And

Dealers In Office And Why It Matters

Don Hall 9:42

and I will continue serving the dealers as long as they allow me to serve them in the capacity that I'm in, speaking loudly and forcefully on behalf of this great industry and our great nation. But that's my calling, and I will help others uh hopefully achieve their dreams, whether that's to be a super successful car dealer or to be uh an elected official at some point and make a difference in our great nation, and we do need your help for sure. Yeah.

Jim Fitzpatrick 10:07

What can dealers, for the dealers that are listening, uh, what can they do to help um get this bill passed and signed by the president?

Don Hall 10:15

As I said earlier, we are just in the phase where we've landed on a car. We've got a bill that's out of committee, we'll land on a car. Right. It is a long ways away from being done. Do not count your chickens before the eggs are hatched, so to speak. Right. So I think what you've got to do is one, listen to your state associations, listen to me and my peers as we tell you to do and ask you to do certain things, like a letter writing campaign and so forth. Uh, listen to NADA, most importantly, NADA is on the hill. They know what's going on, and we're not quite ready to undertake that movement yet. But when we are, they will give us the word, and we need to jump very rapidly and get in the game and contact our U.S. Senators, and eventually remember, once the Senate has done its business, assuming a good result, it then goes to the House of Representatives. We have to do the same over there in the House. Yeah. So we have a lot of days ahead of us. I am not going to sit back and you know kick my feet back and say, hey, we've won. Yeah. Great. It's all great. Again, all we've done is landed a customer on a car. Well, now we got to get them bought. We got to figure out what to do with their trade. We got to figure out how to get them in that car and get them driving over the curb.

Jim Fitzpatrick 11:25

That's right. We got to four-square them, right? We figure out, okay, now it's a give and take, right? Uh in terms of uh getting the things that you want in the bill, and of course working with others to to get what they want in the bill or taken out of the bill. So it might it might look different, but uh but if it's anywhere close to the way it looks right now, huge win, right, for the industry, for um for Sir Senator Marino for sure. And I know that he's worked diligently on this. With with with Senator Slotkin, you know, uh they they put their heads. And which which by the way, that was refreshing to see uh uh that you could get um bipartisan support on something like this, especially right now in DC. So look, folks, it can be done. You know, if people if clear heads prevail and and uh friendships are created, um, you know, then then who knows what can happen next, right? On so many other issues.

Don Hall 12:16

And Jim, let me say this to you. Having been around Congress, having the privilege of being up on that hill and being in the in the Capitol in Richmond as well, yeah, it is a car dealer who is able to reach across the divide and to work it out because car dealers and the people that work in senior management and those dealerships as well understand how to deal with all types of people. Right. No matter who you are, from which you come, your choices in life, it doesn't matter. We can sell your car, we can service your car regardless. That's right. It's a car dealer who could reach across the aisle and work with Democrats because that is part of our DNA. Yeah. And the good senator set an example. When are you gonna run for office? When are you gonna make a difference? America is important, our way of life is under attack. Don't think, take things for granted, and understand the Chinese are not our friends. Unfortunate, but it's a fact of life, and we too shall deal with it as an industry by keeping them out of our country, period.

FTC Pressure And Fixing The Experience

Don Hall 13:17

Sure.

Jim Fitzpatrick 13:17

Um let me ask you this if I can switch gears a little bit. Um the ATAE conference uh just took place, uh, I think just a week ago or a couple of weeks ago. Um, any any big issues that you all are working on collectively that you'd like to share with the dealer audience?

Don Hall 13:32

Yeah, Jim, thanks for asking. First of all, it's like uh a 20 group on steroids, to give you a comparison, folks. Right. Uh it's a bunch of me and my peers uh in a room sharing ideas, best practices, having experts come in and talk about various subjects. As you can imagine, one of our you know current projects obsessions, if you will, is the FTC and what has transpired and making sure that dealers are getting the messages. Yeah. Look, I'm not a conspiracy theorist, but I do believe that if we don't learn how to take care of customers and give them this great buying experience, then at the end of the day, the manufacturers will make that argument to Congress and say, give us a federal franchise law and allow us to choose where we sell cars direct and where we do not. We'll let the dealers have the countryside, but we're gonna take the big cities and do whatever. So we're obsessed with that. But I'm also here to say this to you. We talked about this as well. The young people that are coming in today, and I had the privilege of being at the NEDA Academy as a student, yeah. Uh graduated uh last year.

Jim Fitzpatrick 14:37

I was just gonna say, not not as a young student either. You just went in and said, I want to see what this is all about.

Don Hall 14:42

Santa Morano's son was in one of my classes, as a matter of fact. Pretty cool. But not but listen, I am inspired by the young people. The things we're talking about are not unsolvable problems, ladies and gentlemen. These are opportunities. The young people have a different idea and a different approach. You need to listen to them. You need to humble yourself, even though you may have 40 years experience and listen to them. We've got to change the customer buying experience. That's right. The customer, you know, bringing their cars in for service. We lose way too many customers to the outside garages when the warranty is over with. We've got the answers. We've got the intellect, we've got the desire, and they're working right in your dealerships right now. A number of conferences have taken place. Uh women, you know, women in the auto industry as an example. They're doing great things. Yeah. Learn and listen from them. It and then motivate and and move them up within your leadership because they are part of our solution, the answer, and I think they're right. They want to change the way we've always done business. That's right. So let's support these young people, Jim, and it will make a difference. And that's the kind of motivation that comes out of our conference when we meet as a large on steroids, if you

Scout VW And The Direct Sales Fight

Don Hall 15:52

will, uh 20 group.

Jim Fitzpatrick 15:53

That's right. That's right. In addition to the FTC, um, the industry is still dealing with direct-to-consumer um, you know, threats out there, such as uh Scout with VW. Uh, any updates on that or any strategy that you need help on?

Don Hall 16:08

Well, I I I have some peers that and some dealers out there that still think we ought to be fighting Lucid and Tesla and others and Rivion. Uh uh guys and gals, that we we we lost that fight a long time ago. They've never had a franchise to begin with. Uh we can't really make the argument. Uh move on. What we ought to be fighting against is any manufacturer, uh vis-a-vis scout VW that's trying to sell direct. That's different. For 75 plus years, we have sold and represented VW in the United States of America. They should not be able, no matter what they call it. Well, it's not Scout, it's not VW of North America, it's Europe that's doing it. Well, Europe controls all of North America in terms of VW. And so you ought to care about this. And there are a number of lawsuits that have been filed. Um, as you would expect, these are long-term deals, and there are lots of people involved and lots of lawyers and money and everything else. But at the end of the day, we've got to make sure, and remember one thing I learned a long time ago. Easy to forget this point. Judges are just people like you and me. That's right. And they have good buying experiences and bad buying experiences when they go to their dealerships. Yeah. And we have just got to make sure those judges understand why we're better off and why we are entitled to be able to sell Scout. That doesn't mean that we shouldn't, you know, appease Scout by doing certain things, building like we did with Saturn long ago, building certain facilities and doing this and doing that. Okay, we're willing to play that game. But we, the franchise system, should be the only disseminator, the only one who sells and services new cars by any manufacturer who creates a subset or a division, or like to call it something that's not related, it's related. VW owns it, it's related, and therefore we should have it. So, yes, Jim, we talked about it. We are motivated, we're trying to keep our dealers engaged, but dealers are busy selling cars and servicing cars, and we get that. Yeah. Our job is to remind them these are ongoing fights. We need your support, money, yeah. We need your your intellect, your and your and your your shoulder to push to the wheel to get things done.

Jim Fitzpatrick 18:10

That's right. That's right. And therein lies the the uh tremendous need for state associations, in addition to NADA. NADA

State Associations Need Members Who Act

Jim Fitzpatrick 18:18

does great work, but uh but it uh from a local standpoint and from a state standpoint, you know, if you're not a member of your state association, I I don't know what you're thinking. I mean, th these are the men and women that are fighting the good fight in the state uh legislature every single day on your behalf. And to Don's point, it allows dealers to be dealers to go out and sell cars and service cars and let them do the heavy lifting with regard to getting these laws passed and also protected in the case of the franchise, state franchise laws. So without a doubt. So uh wow, that I mean, I think it's a good thing.

Don Hall 18:48

Jim, let me let me comment on a comment on that real quick. It's not only you know be a member, but be engaged. Yeah, good point. Uh be involved, uh be get in the leadership. Uh maybe, oh, you don't want to run for the U.S. Senate, okay, or the Senate in your state, but get on the board of directors of your association and make sure that they're moving in a direction that makes sense, that's protective, and that that benefits all in the auto industry. We don't represent just the dealers in these associations, right? We represent the techs, we represent the salespeople, the managers, the CFOs, and so forth. We're representing everybody and anybody. So get involved in your associations, they make a difference. And if not, then that's why you get involved, to make sure they continue to make a difference and they're doing the kind of work you want them to do. That's right. Thank you, Jim, for that comment.

Final Takeaways And Sign Off

Jim Fitzpatrick 19:35

Yeah. Don Hall, the one and only. Thank you so much for jumping on. I know it's short notice. I love that uh you're always right there whenever we need you. Obviously, we're we're longtime friends, but it's great to have you as close as a phone to go, hey, this was just passed. Can I get you on? And you're like, Yep, let's go, let's do it. So I appreciate that very much. And uh and you're you're just an outstanding voice for our industry. And I know a lot of people look look to you for answers and also look to you for your take on these things that come up in the industry every now and then, right? So thank you so much.

Don Hall 20:06

Thank you, Jim. I salute everyone out there and have a great day. Awesome. Thanks.