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A driver in the car sales industry here

Bradley McAreavy has held jobs collecting debts and repossessing cars, selling securities and insurance, and running one of the area’s largest car dealerships. But his current undertaking is where he feels most comfortable.

"Right now the toughest part of the car business, that’s the most screwed up, is the financial side of it, the lending side of it," says the 48-year-old president of the Rochester Automobile Dealers’ Association Inc. "The banks and the finance companies that have historically been the lenders for the auto industry are just a disaster. Well, that happens to be an area that I have a tremendous amount of experience with."

McAreavy began his automotive career more than 25 years ago with General Motors Acceptance Corp., GM’s financial division. He worked as a field collector, repossessing cars and collecting past-due payments.

"I only had a gun pulled on me one time," he says with a laugh, explaining that while he was talking to a customer’s wife about taking the vehicle, the man stepped around the corner with a pistol.

"He says, ‘You’re not taking the car.’ And I said, ‘You’re right,’" McAreavy recalls. "I just left, reported it; the sheriff came back and took care of it."

On a separate occasion McAreavy and a seasoned employee attempted to collect on a debt, and the customer made them wait several hours before coming out of the house drunk, flinging himself on the hood of their car and pounding on the windshield.

"I learned how to handle difficult situations," McAreavy says. "Some people I was very empathetic with. They had real problems, and they really were trying to work things out. And other people, not so much. There were people who couldn’t make their payments, and there were people who just didn’t want to."

McAreavy spent roughly two decades with GMAC. The last six years with the company he worked as the executive in charge of field operations for western and central New York and western Pennsylvania, based in Pittsburgh. He received his MBA while working with the firm.

During his time with GMAC, McAreavy made connections with area auto dealers. After leaving the organization he became president of Hoselton Auto Mall, where he stayed for two years.

"It was really helpful to me with this job," McAreavy says. "But it just wasn’t for me. The retail car business is kind of unique. Some parts I was able to handle easily, and there were other parts that I just couldn’t get."

McAreavy then decided to go back to his education in finance and took a job with AXA Advisors LLC selling insurance and securities. A short time later, in 2007, RADA’s fourth president, John Lyboldt, left the association for a vice presidency with the National Automobile Dealers’ Association in Washington, D.C.

McAreavy returned to the automotive industry in June 2007 as RADA’s president.

"The path has always been something that’s worked out well," he says of his varied career. "I think I’m well-suited for this job … because of my two years in the retail business. We’re an insurance broker and we do benefits, so even my time with AXA turned out to be very beneficial. So it’s all led to where it is today."

A bumpy road
Given the current situation in the auto industry, McAreavy says things have become much more short term.

"Things that we’re pretty heavily involved with are all going through a transition right now," he says.

The area’s annual auto show has been affected by the economy and turmoil in the industry, he explains. Manufacturers typically purchase floor space at auto shows to display their vehicles. Last year, when Nissan stopped participating in shows, local dealers and advertising associations were forced to kick in the money Nissan traditionally would have spent.

As a result of its bankruptcy, Chrysler has said it will not participate in auto shows next year.

"So now it falls on the shoulders of the local dealers and their ad associations," McAreavy says. "That expense was historically paid by the manufacturers; it’s not anymore. And once one or two of them do it, the rest of them start looking at it as well. That makes us have to relook at how the show’s put together, how it’s funded, and really make sure that we can put it together in the way we’re accustomed to doing it."

The insurance business also has been affected by the economy. RADA offers lower-cost group health-care benefits to its members because it is able to do it on an aggregated basis.

"Instead of a dealer who’s got 50 or 60 employees trying to go out and get insurance, we take 2,000 or 2,500 and we go there and we do it for them," McAreavy says. "The health care reform bill that’s under consideration, part of that is looking at brokers’ commissions and the way people get paid within the insurance industry. And that would be an issue for us."

As a result of manufacturer bankruptcies and reorganizations, the 10-county region RADA serves has lost some dealerships. McAreavy says there likely will be additional market changes that will affect the organization’s revenue stream.

"I think in the long run it’s going to be a stronger retail market. The dealers that will continue to be in business will be in a better position to be profitable and successful, but there’s still a chance that between now and then we could see a few more decide not to continue," he adds.

Because the association is tied tightly to the economy, it is difficult to set long-term goals, McAreavy says.

"We’re kind of focused on where we are right now," he says. "I think in the association world what we’re probably going to have to consider is looking at consolidating some of the associations."

In New York there are five metropolitan associations, as well as the state automobile association. McAreavy says it would be hard to predict which locales would survive, or even if the associations in the state would be touched by consolidation.

He thinks it would be wise to be prepared for the worst now.

"You don’t want to get caught flat-footed," he explains. "We have to kind of prepare ourselves in the event something dramatic happens. If we experience a material loss of revenue through one or more (events), we’re going to have to revisit where we are and what we do and how we do it."

He points out, however, that the local car market has not been as affected by the economy as other markets across the country. While local new and used car sales this year likely will trail 2008, the gap may not be as wide as it is nationally. That may insulate area dealers and RADA.

The organization
RADA is a 100-year-old non-profit organization that began as a catalyst for the annual auto show. It incorporated roughly 10 years after the first show in 1908 and quickly became a facilitator for the exchange of used vehicles among owners and dealers.

Today RADA is involved in legislative efforts on behalf of 4,500 employees at 110 car dealers in 10 area counties. The organization also offers insurance products, training and assistance in mastering compliance work. RADA employs six full-time and four part-time staffers.

"We try to develop business relationships with companies that (dealers) then can take advantage of on a reduced-cost basis," McAreavy says.

The organization’s Form 990 filing with the Internal Revenue Service reports 2008 revenue of $987,465 and expenses of $950,667. That compares with revenue of $971,407 and expenses of $861,028 the year before.

RADA’s revenue stream is fed by membership dues, proceeds from the annual auto show and finance and insurance products offered by RADA Service Corp., the association’s for-profit arm.

"My goal every year is to make a dollar," McAreavy says. "Our role is not to maximize our profitability. Our goal is to help our members with their businesses and do it in a way that’s profitable to them, and we just need to cover our overhead.

"It doesn’t always work out," he adds. "Some years we might take a small loss and some years we might make a few dollars. We try to make enough money to cover our overhead expense and provide our members with valuable services."

Despite lackluster car sales and the recession, RADA has been a success for its members. McAreavy notes it is one of the nation’s oldest auto associations and offers its members numerous benefits that many others do not.

RADA’s success is a result of its employees and its members, McAreavy says.

"Most of the people have been here for quite a long time, and they have the right attitude about what we do," he explains. "It is a very customer-focused group of people. Every person here is all about helping our members."

Several of the group’s employees have been with the organization for two decades or more, says Pat O’Neil, director of fixed operations. That means employees know their jobs backward and forward and have built good rapport with area dealers.

"I think the services that we provide our dealers and knowing they can look to us for advice on what’s going on in the industry (make RADA successful)," she says. "We always make sure that our members come first."

Each of RADA’s staffers is cross-trained.

"If one person doesn’t know something, another person does," receptionist Mary-ellen Knapp says. "I think we service our clients well because along with the normal work we do, we do follow-up. And people really appreciate that."

RADA employees are all about being RADA representatives, McAreavy says.

"We’re all things to everybody, whatever you need," he adds.

Area car dealers also contribute to the organization’s success, McAreavy says.

"The group of dealers that are in Rochester are as good as any place I’ve seen when it comes to needing to put (being competitive) aside for the greater good of the business and for the area, the community," he explains. "They do it better than anybody I know, as a group of dealers."

Many of them are friends, he notes.

"They’re competitors and they’re friends. That’s unusual. You don’t get that camaraderie typically among competitors," he adds.

Because RADA has a small number of employees and so many of them have worked many years together, O’Neil says, the atmosphere is close-knit.

McAreavy is a numbers person, O’Neil says, and not a micromanager.

"You’ve got a job to do and he lets you do it," she says.

Adds Knapp: "We were all independent when Brad came because we’ve all been at our jobs a long time. We pretty much know where we’re going, but as far as leading us, he does. If we need him, he’s there."

McAreavy keeps his staffers involved and informed, Knapp says.

"Say he’s gone to Albany to lobby for somebody. He will come back and tell us what he did and what happened and who was there," she says.

McAreavy describes his leadership style similarly and says his communication style is a strength, like his analytical mind.

"And I think I’m pretty consistent in my approach to things," he adds. "I try not to be the type of guy where you walk in one day and things are great and the next day things are a disaster. I think that’s hard for people to deal with."

Richard Dorschel, the Dorschel Group president, calls McAreavy intelligent, well-educated, competitive and intense.

"Of all our past executives (at RADA), no one has come to us who is better equipped to help us through the times we are now experiencing than Brad," Dorschel says. "He was the guy who was making decisions about who GMAC would lend to; suddenly now he’s defending those people who need those borrowings. So we literally could not have had a better executive for these times who understands both the manufacturers’ and lenders’ side of the coin.

"He is exactly what we need," Dorschel adds. "I think a guy with his experience, on both sides of the ball, offense and defense, is in real demand."

McAreavy says dealing with the government is what he finds most frustrating about his job.

"It’s difficult to understand how decisions get made and why they get made," he says. "You need something to happen and you just know it’s not going to happen fast enough-something that’s very urgent-it’s going to be months down the road."

What is most challenging in the industry right now, McAreavy says, is what is happening with the domestic automakers.

"I would say that it’s very important that the domestic car business recover," he says. "We represent all franchises, but I think for the good of the industry and the good of this country, it’s very important that we have a domestic auto industry. It’s good for competition. It has a lot of implications."

The best part of his job, McAreavy says, is the dealer members.

"They’re so entrepreneurial. They’re so resilient. They just find a way to get it done, to survive. And I admire that about them," he says. "I’m not sure I could do what they do. I’m kind of a risk-averse kind of guy. So when you deal with people who put it all out there, they risk everything they have personally and professionally, that’s pretty impressive. I enjoy working with them."

McAreavy says his philosophy is that the more you learn, the more you realize how little you know. Yet people do not realize what they are capable of achieving until they are put in a position where they have to do it, he adds.

"I believe that you never really know what you’re capable of achieving until you’re confronted with that obstacle," he says. "Don’t sell yourself short in what you’re capable of achieving."

At home
McAreavy was born and raised in Iowa and during his time with GMAC lived in several areas of the country. He currently calls Penfield home.

Growing up, McAreavy wanted to be a professional athlete and participated in several sports throughout high school and college. Even after college he played softball. His father played minor league baseball and traveled with the Harlem Globetrotters as a member of the Washington Generals, the team the Globetrotters played against.

"I’m a pretty competitive person. Some would say too competitive in some ways. I want to win at checkers," he says with a laugh, adding that he got that trait from his father.

"He thought winning was a learned skill," he says.

But McAreavy says he has learned that not everything needs to be a battle.

"There is some middle ground there," he explains. "But it took me a little while to mature to the point where I realized I don’t have to win everything. I can compromise."

In his free time McAreavy enjoys golf and staying physically active. He also has worked with several charity organizations through RADA, including the RADA Charitable Foundation, which raises money through its annual gala for local children’s charities. Next year’s gala will benefit the Rochester Rotary Club’s Sunshine Camp.

McAreavy says he is not alone in wanting to help out locally.

"I think the auto dealers in this area are a lot more involved and a lot more caring about what happens around here than groups of dealers in other parts of the country," he says. "They genuinely care about things. I can tell you, that’s not the way it is in a lot of other places."

Bradley McAreavy
Title: President, Rochester Automobile Dealers’ Association Inc.
Age: 48
Home: Penfield
Education: B.S., business administration, Winona State University, Minnesota, 1983; MBA, Wayne State University, Detroit, 1997
Activities: Golf, fitness, sports
Quote: "My goal every year is to make a dollar. Our role is not to maximize our profitability. Our goal is to help our members with their businesses and do it in a way that’s profitable to them, and we just need to cover our overhead."

12/4/09 (c) 2009 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail [email protected].

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