Digital Edition Subscribers: Read Roadracing World Magazine Now >
Roadracing World.com - An Online Service of Roadracing World Magazine
SHARE:
Jan 27, 2010

AMA President Rob Dingman Interview Part Three: Answering The Question, Where Does The AMA Go From Here?

By David Swarts

Here is the third part of my taped, transcribed interview with AMA President and CEO Rob Dingman, covering the state of the AMA and its future.

Roadracing World: what are some of the biggest challenges the AMA is facing today?

Rob Dingman: We've had unprecedented attacks on motorcycling in the last couple of years. At the end of the Bush administration President Bush signed into law the Consumer Product Safety Improvement Act, which brought us the ban on the sale of youth model ATVs and off-highway motorcycles [due to lead content]. That had a tremendous effect for a period. We were fortunate to get a stay of enforcement, but that's by no means over. That's a tremendous assault on the motorcycle industry at a time when we're experiencing a very difficult economy.

And then this administration, President Obama has signed into law a number of public land pieces that have shut down land to off-highway vehicle enthusiasts. That's going to continue.

Like I said, we have an unprecedented assault on motorcycling, and the AMA is the only national organization that exists that can help rally the support of the motorcycle community to fend off these attacks. That's where we need to focus our attention.

Some of these discussions about racing in the future may seem quite petty if motorcycling ceases to exist or motorcycling as we know it ceases to exist. If there's horsepower restrictions or requirements for all kinds of safety equipment that make motorcycles look completely different than what you see on the racetrack today it will change racing maybe to the point where maybe there won't be racing. So we've got to protect motorcycling if we have any hope of protecting racing.

RW: Is the state of the industry affecting your attack on those challenges? Manufacturers' sales are down double digits across the board. I would have to imagine that has an impact on them contributing to the AMA like they have in the past?

Dingman: You raise an interesting point because I think there is this perception that the industry contributes all these resources to the AMA. We do have corporate members in the AMA, we do have OEs that participate at a higher level than some others in the industry in the AMA, but we're not the Motorcycle Industry Council (MIC).

The Motorcycle Industry Council is where the motorcycle industry does their government relations programming and thing like that. Our support, we rely on the industry for corporate membership, but beyond that there hasn't been a whole lot of support. There's been support through advertising and those kinds of things, but in terms of where they are going to spend their resources for government relations it has traditionally been with the Motorcycle Industry Council.

I don't think we've seen a reduction in that because there hasn't been a whole lot of that in the first place. I think there was this mentality where, 'Well, we contribute to the AMA because we make a significant investment in road racing.' That's not the same as helping to support some of the things we do.

We do have manufacturers that do support a number of our programs through sponsorship. We greatly appreciate that, and that helps us do those kinds of things. We hope that they will continue to participate with us in that way.

RW: So the AMA's activities are largely supported by those $39 membership fees?

Dingman: Absolutely. And that's in addition to trying to refocus the organization to be more of an advocacy organization. We're trying to put the focus back on our membership, that we are a membership organization. We're not a racing organization that happens to sell memberships. We're not a magazine publisher that happens to sell memberships. We're a membership organization that happens to sanction racing events and social events, and we put out a magazine, and we do government relations activities. But first and foremost we are a membership organization.

RW: What's happening with membership? Membership is down. When people talk about the membership crashing and burning some people theorize that it kicks back to AMA's actions and policies in certain areas. What is happening with membership and what's the cause?

Dingman: I'm glad you asked that. We have experienced a reduction in membership that is directly attributable to basically one cause. The AMA had a program that was started just before I got to the AMA that was a program with Nationwide Insurance Company where Nationwide would provide a discount to AMA members but would provide a free AMA membership to anyone who purchased a policy with them.

While that program was very well intended it had some unintended consequences. It was a program that was funded out of the headquarters office of Nationwide in Columbus, [Ohio], but it was implemented by the 15,000 agents that Nationwide has to sell insurance products. In a typical situation you would call your Nationwide insurance agent.

Remember the insurance market is very competitive. The insurance companies are constantly trying to get business from the other insurance companies. And if somebody calls for an insurance quote what the insurance companies do is stack discounts. They may have a variety of different programs that have discounts, and this happened to be one of those programs where they said, 'I can get you another discount by making you a member of the American Motorcyclist Association.' Although typically they wouldn't call it the American Motorcyclist Association, because none of these agents were trained to know what the AMA was.

I heard one story from one of our staff members that he decided that he would switch over all of his insurance to Nationwide because he felt that was the right thing to do to support the AMA, and when he did the agent said, 'We can make you a member in the National Riders Organization.' He said, 'What's that?' They said, 'I don't know but we can take care of that for you.'

So there was a total disconnect between the people who were selling these memberships, essentially, and the people who were getting the memberships. And because of the stackable discounts situation we had a bunch of people who weren't even motorcyclists who ended up on our membership roles. And many of these people didn't know they were AMA members. It was just part of the deal for the agent to get them a discount.

It was well intended. It wasn't the agents' fault, necessarily. They didn't get the training and the information necessary. There weren't resources dedicated to this in order to train 15,000 insurance agents.

So we had an artificial spike in membership that when we stopped the program they went down. And I think it was roughly 49,000 members, which is why we crept up to 300,000 and now we're down around 250,000 245,000 now.

It's important to keep in mind that these memberships, as part of the arrangement with Nationwide, were purchased by Nationwide at a reduced price. So these weren't full margin $39 members. They were significantly less than that. So when we lose 49,000 members it's not 49,000 times $39. It's significantly less than that, number one.

And the cost to renew essentially an un-renewable member is exorbitant, particularly when many of these people don't know they're members of an organization and, two, many of them have no affinity with the organization because they're not even motorcyclists. So that's not how we want to grow the membership. That was a failed marketing program, and we don't intend to do a program like that in the future.

RW: So if you've got a blogger out there saying the AMA membership is crashing due to your policies, how do you answer that?

Dingman: Our membership has reduced over the last year by about 19%. If you include the Nationwide free memberships that have now trickled out of the system. If you take those out, our membership has gone down 5%. And yesterday the MIC announced the industry numbers, and the industry was off 37%, or something like that. So if we're down just over 5% in an environment where everything else is down close to 40% we're not doing that bad, quite frankly.

The other thing to keep in mind is when the AMA reached 200,000 members we had this huge celebration and we put the 200,000th member on the cover of the magazine. When we hit 300,000 we didn't do that, because I knew right away that this Nationwide program was a house of cards. And I remember telling the Board that this Nationwide program is going to reverse itself and we shouldn't be promoting the fact that we are 300,000 because we can't sustain 300,000. This is not a program that's going to allow us to sustain 300,000.

We're trying to set up a situation where our memberships are sustainable, like the roadside assistance program. That is a first for the AMA. We've offered free roadside assistance [for all family members and family vehicles including cars, RVs, etc.] to everyone who is willing to sign up for automatic renewal, and we're paying for it with the savings of not having to send out renewal notices. We've got about 40,000 people signed up for automatic renewal right now. And our renewal rate of those individuals is about 96%, which is higher than we thought it was gonna be. Those areas are where we're making a lot of progress with real membership.

It's a difficult economy to grow membership. The people who did leave the AMA, we called a sample of the people who left, and we had some who said, 'I'm not a motorcyclist. I don't know how I ended up a member of the AMA,' which are clearly Nationwide program related. And we had some who said, 'I sold my motorcycle.' If you sold your motorcycle you're not likely to retain your membership in the AMA. So clearly the economy has an effect, but the fact that we're only down just over 5%, if you exclude the Nationwide freebies, in an environment where the industry is down significantly more than that, we're doing OK.

RW: Is the Nationwide deal still active?

Dingman: No. We still have a partnership with Nationwide where they will provide a discount for AMA members, but they are no longer offering free memberships to people who call them and request a quote. And they have pretty much trickled through the system now. We stopped it last year, and the remaining ones just came out here in the last month or so.

RW: How is the financial health of AMA?

Dingman: The financial health of AMA is very good. We have ample reserves. In the past, the budget infrastructure had relied on the spool-off from the reserves to pay for operational expenses, and what we've done is we've altered the budget process so that the revenue from interest, if you will, from investing our reserves goes back into the reserves and allows us to do things like these endowments rather than use that money for operation expenditures. That's how the organization was budgeted in the past.

RW: So your investments didn't really take a hit with the stock markets last year?

Dingman: Actually, our investments took a significant hit when the market did what it did here a year ago. We took a hit like everyone else. The organization did not have an adequate investment policy or strategy, and what we have done is we, working with our Finance Committee of our Board, came up with a strategy and a policy that was a very conservative approach, appropriately conservative for a membership organization, and moved investments from where we were to what we have. And we've recouped much of the loss as a result of that change.

RW: What is your strategy to grow the membership now?

Dingman: Again, it goes back to improving the value proposition of the AMA. The menu of benefits of the AMA just three years ago was really inadequate. You could go in our building and our staff would be hard pressed to explain why somebody should join and be an AMA member.

You really have to have tangible benefits, and the roadside assistance is the best example. We have all kinds of discounts and partnerships and things that we've added in addition to that, but that's probably the most significant one. Here, you're clearly getting more than $39 in value for the roadside assistance.

But the real benefit of the AMA is our government relations work and our activity to protect the future of motorcycling. It's a nebulous kind of idea. It's hard for people to get their arms around. It is an intangible, and people only appreciate it when the AMA has helped them, whether it's helped them save a riding area from being closed or something else. Until you have that personal experience, it's, 'Oh, yeah they do that government relations stuff also.' So you also have to have the tangible benefits to help attract the members. And that's what we've tried to do, is we've tried to grow the tangible benefits.

We're trying to come up with new programs to get people, to reach out to other groups. Female riders is the fastest growing segment, and we're trying to do outreach to women and other groups to try to get them to come in.

You know the truth of the matter is we're at a point now where it's not an option any more for motorcyclists to stand on the sidelines. You have to protect your right to ride, and the best way to do that is to join the AMA. We're trying to improve our message and to get that out there as well.

RW: If the MIC does government relations why do we need the AMA?

Dingman: Well, because the MIC represents corporate interests. They don't represent the interests of individual motorcyclists, and those interests are some times at odds with each other. There may be something that benefits a manufacturer that may not necessarily benefit an individual rider.

RW: So if you're talking to a U.S. Senator does it make a difference to him whether you represent the industry or a user group?

Dingman: Absolutely. If you go in and can say, 'Hey, I represent 250,000 voters,' that's way more significant than to say, 'I represent the American distributorship of a Japanese product.' To me they're going to be much more responsive to voters than to an interest that may be pretty far foreign from their home district. And that's the other thing, we can represent individuals in every single congressional district, which is not something the Motorcycle Industry Council is able to do. There is a significant purpose for them, and they are protecting commerce and that aspect of it, where we're protecting the rights of motorcyclists.

RW: Anything else you wish to add?

Dingman: I guess the one thing I would say is that it has really been frustrating that we've had a number of people running the AMA down over the years. This has gone on since long before I got to the AMA. Part of the reason we decided to sell the professional racing assets was to try to shed some of that negativity, and clearly we haven't been able to achieve that objective yet.

It's important to keep in mind that the AMA is the only National organization that exists to promote the motorcycling lifestyle and protect the future of motorcycling. And you have to put aside for a minute any dissatisfaction that anybody might have with the AMA's activity in racing, whether it's AMA as operator of the series or AMA as selling the assets to DMG, and you have to think about what happens if the AMA isn't here.

To me the attacks that have been made on me personally and the attacks that have been made on the AMA have been like throwing rocks at a fireman who's coming to your house to put out a fire. It doesn't make any sense. And most of the attacks have come from people who have an ulterior motive, and nobody's ever explored those ulterior motives.

You guys did a multi-series piece last year some time exposing one of these attackers for getting paid from one of the OEs who clearly had a stake. This was someone who was in controlling position with the AMA, was able to control Pro Racing, and was all of a sudden no longer in control and clearly had a motive for attacking the AMA. And then to have a freelance writer who is also paid by this OE attacking the AMA without disclosing that, I think, is pretty unethical.

Again, all of these detractors, I would like people to consider their motivation. One publication printed an opinion piece from a disgruntled former employee as if it was fact. That's just not good for the AMA, and if it's not good for the AMA it's not good for the industry because again the AMA is the only entity that's out there that represents motorcycle enthusiasts, that can go to Congress and say, 'We represent this number of people.' The larger we are the better we will be at protecting the future of motorcycling.

RW: Has there ever been a program where OEs gave away a free AMA membership with the purhase of a new motorcycle or ATV?

Dingman: I'm glad you asked that question. I had a former Board member who worked for an OE tell me that he and another Board member, who worked for a different OE, they had a conversation about whether or not they could get their companies to provide a free membership with the purchase of every new vehicle. And each of them came to the separate conclusion that neither of them, although they were both Board members at the time, neither of them believed enough in the AMA to sell it to the leadership of their organizations.

To me, that speaks volumes. Here, you have people on your Board of Directors who don't believe enough in the AMA to be able to do something like that. That's why the AMA has been broken, and that's why we're doing everything we can to fix it and why we're doing everything we can to remove those parochial interests from the Board.

When you go to the MIC Board and you're a manufacturer you should be there to protect the interests of your company. When you come to the AMA Board you really need to take that company hat off and say I want to do what's in the best interest of the AMA, not what's in the best interest of my company.

We've had a lot of people who have sat on our Board who did a great job of representing their employer but they did a horrible job assisting the AMA. I'm really pleased with the corporate members that we have on our Board now. They all understand they need to take a corporate hat off and say, 'Let's do what's in the best interest of the AMA and not what's in our best interest as a company.'

RW: Some blogger will say how terrible it is that an employee has been at the AMA for 30 years then they were laid off and it's a shame, it's terrible. It's almost like advancing the concept the AMA is some full-employment program or something. How do you address that?

Dingman: Another great question. Again, most of those negative comments came from people with an axe to grind, people with a personal motivation to tear me down, to tear down the AMA because they didn't want the AMA to succeed without them or something. But I will tell you that every person who was let go by the AMA had the opportunity to help be part of the solution at the AMA.

There were people who were long-term employees at the AMA, but they were never going to help change the AMA. They were part of the problem, and they were part of the reason the AMA was where it was.

I will tell you in response to comments about them being treated poorly, they were treated unbelievably well. The AMA has an extremely generous severance policy that was established many years ago, long before I got there. All of these long-term employees got big, fat severance checks when they left, and they were treated very well despite what people wrote. It's not true. It's just not even factual. It's not even remotely true that they weren't treated well. They were treated extremely well. In fact, one of these individuals we allowed to continue to serve in a capacity with the FIM after they were terminated, yet I was accused of treating them poorly. Again, it goes back to consider the source of the information.

I never responded to any of that because it's inappropriate for me as a CEO to talk about the circumstance of someone's termination, but just in general terms I'll give you an example. I found out after somebody was terminated that they had been plotting with their staff against me. I was told this particular individual said that I was out to get him and he planned on being there long after I was gone and that he had been through a situation like this before where the staff essentially had a coup and they were able to get rid of the president and replace him with someone the staff wanted.

That's not how you operate. If you come in and you are going to try to undermine the organization and undermine the new leadership it shouldn't be a surprise to you when that's discovered, that you no longer have a job.

RW: Do you think it's fair to say that the AMA is now being run more using accepted business principals than it was prior to your arrival?

Dingman: Absolutely. The AMA had become sort of this what I call the world's largest club based in central Ohio. And if we're going to grow this organization we absolutely have to be more professional. We have to operate in a more professional manner and use best practices in the industry. And when I talk about the industry I'm not talking about the motorcycle industry. I'm talking about the association business.

We've instituted a lot of new changes. Many of the changes we've made are virtually invisible to the public and to our membership, but they are going to enable us to be more efficient and be able to deliver more and better member benefits. Some things are as simple as a basic computer system, to have a robust association management software system as opposed to an archaic computer platform that we had been working on with homegrown software that provided guaranteed employment for these code writers. You can't do business like that in this day and age. The organization today is much more professional than it was.

If our goal is to grow membership, which it is, it has to start with the ability to sustain that membership. I was shocked by the depth of deficiencies. I viewed the AMA as a tremendous opportunity. I looked at the growth of the industry since the 1980s -- I think it's like a 357% growth rate -- yet the AMA was pretty much flat during that whole period. You have to be able to sustain a larger membership before you can hope to grow a membership, and the truth of the matter is the AMA wasn't set up to sustain the membership is had let alone grow its membership beyond what it was.

RW: So basically you're talking about infrastructure deficiencies, but what about in real simple terms the fiscal health of the organization before and after? Have there been any advances in the fiscal health of the organization that will allow it to have long-term sustainability?

Dingman: Absolutely. I think the sale of Pro Racing was"¦one of the primary motivations behind that was to have a situation where you could be more predictable in budgeting. You have to know whether you're going to lose a ton of money or break even or get money. Clearly that's an element of it.

We changed our investment strategy to enable us to have a more conservative approach to managing the reserves so we're not worried about losing money in a down economy.

Racing is a great example. What happens when the economy goes into the tank? We were fortunate that we had closed on this deal [to sell AMA Pro Racing] before the economy went south. And one of the main reasons we did it is because the economy is always cyclical. There's always going to be peaks and valleys. The AMA just wasn't set up to withstand the valley.

Sure, we have ample reserves, but why should we put ourselves in a position where we are risking our members' money year after year so that when we do go into that trough we are dipping into those reserves?

DMG has faced that in this economy. Their operational stumbling has caused them some real economic issues aside from the economy, and then add the poor economy on top of that and that could be the AMA there suffering those losses. Fortunately, we are not. We made the deal at the right time.

RW: When you walked into the door of AMA"¦let me rephrase that, when you actually took control [Dingman was hired in December 2006 but did not take control from Interim CEO Patti DiPietro until March 2007], when you actually took over the reigns and were in charge and running the place and you looked around did you find that the level of staffing was consistent with a prudently run business or was it something else?

Dingman: The AMA was overstaffed. I think we had about 115 employees, and we have in the 80s today. Part of that [decrease] was with the sale of Pro Racing. Some of the folks who were involved in that are no longer there. Yeah, I think it was overstaffed. We had people in the wrong jobs. We're still trying to find the right mix and the right positions. We've brought some people in from the outside.

It's nice to have longevity in a place, to have people with 30-year tenures but what happens with that is you never have any fresh insight from outside. You never have people who come in with other experiences or disparate experiences that can say, hey, I worked at this place and we tried this. You never get that when you've got that longevity.

I'm glad you brought up the day I walked in the door versus when I got control because that was another issue. The Board [at the time] was so focused on presenting the image of this seamless transition from one executive to another that I never got the opportunity to come in as the new guy with new ideas, come in and say this is the guy who is going to clean this place up, try to correct what is wrong with the organization.

It was, 'Oh, no. We want to have an interim CEO, and we're going to let this interim CEO make all of these changes, and it doesn't matter whether the new guy likes it or not.' It was, 'Let the new guy follow the path of the interim CEO's choosing.'

The reason they went outside of the organization to hire me was because they did want to have some fresh insight rather than have somebody who's been there for 30 years dictate what was gonna happen.

Top 5 This Week