Tariffs & The Right to Repair – External & Internal Advocacy in the Auto Industry – with Eric M. Johnson – [Ep. 252]

Linda J Hansen:  Welcome. Thank you for tuning in to this episode of the Prosperity 101® Breakroom Economics Podcast. My name is Linda J. Hansen, your host and the author of Prosperity 101® Job Security Through Business Prosperity: The Essential Guide to Understanding How Policy Affects Your Paycheck, and the creator of the Breakroom Economics® online course.

The book, the course, and the entire podcast library can be found on Prosperity101.com. I seek to connect boardroom to breakroom and policy to paycheck by empowering and encouraging employers to educate employees about the public policy issues that affect their jobs. 

My goal is to help people understand the foundations of prosperity, the policies of prosperity, and how to protect their prosperity by becoming informed, involved, and impactful®. I believe this will lead to greater employee loyalty, engagement, and retention, and to an increased awareness of the blessings and responsibilities of living in a free society. Listen each week to hear from exciting guests, and be sure to visit Prosperity101.com.

Thank you so much for joining with me today. It is just a pleasure to have you listening or viewing. We have an exciting broadcast for you today because all of us drive a vehicle, or at some point in time, we either drive or ride in a vehicle. So my guest today has something that is important to every one of us. 

But before we get into the interview, I want to say a special thank you to our prosperity partners, those who help provide financial support to keep the podcast on the air, and thank you for supporting our strategic partners. Today I'd like to mention the U.S. Christian Chamber of Commerce and our newest strategic partner, Mother Nature's Trading Company, with natural products for your health, filled with cranology. So please visit the show notes to look at those two strategic partners and please support all of our strategic partners and you can find their websites and information in the show notes and their links on our website as well.

So today, as I mentioned, I have someone who will bring information for everyone who cares about transportation and their vehicles and what we should do as business leaders and consumers in this changing political climate. So it is my honor to welcome Eric Johnson. He is the President and Managing Partner at Arnold Motor Supply, based in Spencer, Iowa.

It's such an exciting company. It was started in 1927 by E.P. Arnold. The history of the company is really inspirational and really fascinating when we think about how this company has been in business so long and has grown and how Eric came to be in this position.

So Eric, thank you so much for joining with us today and sharing your own history, but also the history of Arnold Motor Supply and then important thoughts for business leaders in today's economy. So thank you for joining us.

Eric Johnson: Yeah, thank you for having me. It's my pleasure to be here.

Linda J. Hansen: Well, it's great. It's been nice to get to know you over time, and Arnold Motor Supply has brought breakroom economics® into the business.

I'm really grateful for that, and I'm thankful for the tour and everything you gave us and met great team members, what a fine company. Tell us a little more about Arnold Motor Supply and how it all began in 1927.

Eric Johnson: Sure. It's one of my favorite things to talk about. So that's the easy thing to do. It's really a fantastic company, great culture. And are we perfect?

Absolutely not. You know, we have our challenges. We have all kinds of things that we're working on that we want to be better at. But we really do remarkably well in terms of, we do a survey every year of our associates and we usually get 80% plus participation in the survey telling us: how are things within the company, what's going well, what's not going well. We historically have done an exceptional job compared to other companies. You know, there's tens of thousands of companies that take this same survey, and we routinely are among the very, very top. So I think that goes back to the founding, Mr. Arnold founded this company in 1927. It really is a story of entrepreneurship. When he started this company, the automotive industry was in its infancy and he had the foresight to recognize that this was the up and coming thing, so he got in early.

When you think of 1927, you have to recognize in the very early days of this company, he encountered the Great Depression, the stock market crash. He started in August of 1927, and we all know what happened in October of 1929.

So he was just getting his feet under him when the Depression happened. The Depression really was not a bad thing for his business. He grew well through it.

Of course, once that was done, we hit World War 2, so there was a lot of things going on in the first 15- 20 years of the existence of this company and the foundation that he established, really set us up for success. You know, we'll be celebrating our centennial here in two years.

In there, it really is a testament that there are correct ways of doing things. He wasn't perfect either, but he did a lot of things right and established a foundation that we still rely on today.

Linda J. Hansen: Well, you know, leadership makes a difference and he definitely exhibited fine leadership and good character. His idea was you build a business with people, and he realized that his team and his customers were the core of the business. That is how you build a business, by keeping your team well taken care of and your customers well taken care of, and he learned to pivot. You mentioned the Depression. His story is so interesting.

Before we get on to other topics, I want to make sure that people know how to read the story of Arnold Motor Supply through the book that you just recently published. If you want to hold it up and share the title.

Eric Johnson: Yes. You build a business with people.

You build a business with people, which is, you know, this is not my words. These are his words. It really is true. That is what,there are some really core principles that he lived by. 

And I spent a year writing this book. I had no intention of writing a book.

When I started digging into what was supposed to just be a real short article for Wikipedia and it was going to be an afternoon project and then we were going to go on to something else, it just was so fascinating and then I had the pleasure to meet our very first employee.

This was about 12 years ago, she was 102 at the time. She was the first employee that Mr. Arnold had back in 1930, and she was amazing. Florence Rush was her name, and just to sit and listen to this wonderful woman and talk about her recollections, which were amazing, the precision of her memory at 102 was awe inspiring, honestly.

But just to get an understanding of what was what was culture like, what was the economy like, what was the business climate like and what was Mr. Arnold like in the midst of that. Between her and then multiple other people I had the chance to interview over that year, the story was just amazing. It almost wrote itself. It was so interesting. 

I really enjoyed the process of writing, you build a business with people. I really tried to aim it towards entrepreneurs, you know, people who are finding themselves in the same situation that Mr. Arnold was in. The best way to learn a lesson is to learn it from somebody else rather than have to fall down and make the mistake yourself. So, anybody who is interested in economy, transportation, just entrepreneurship or history in general, it is really a cool story. I appreciate the opportunity to talk about it, because, again, it's a fun thing to talk about.

Linda J. Hansen: Well, it is, and especially if you're in the Midwest, you can really see all the Arnold Motor Supply stores around the Midwest and you can envision the growth and the tenacity that had to be present in order for him to keep growing through all of the changes in our country, in each state. It's a great inspirational story.

I know the book, you can find it on Amazon. We'll mention it again at the end of the broadcast. But then how did you get involved with Arnold Motor Supply?

Eric Johnson: I really was not seeking a job at all, and I didn't have any particular pull into this industry either. But I had a former co-worker who was working here at the time and somebody that I had a good relationship with and worked with for a long time and trusted his opinion. He called me probably three times and said I needed to come over here and take a look at an opportunity that they had within this company.

The first two times I just politely declined because I really wasn't interested in making a change. But finally, because I had a good opinion of his opinion, I agreed to come over and meet with the people and kind of talk through it. Ultimately, one of the best decisions I've ever made in terms of changing to a company, that out of all the, I would say I've had five jobs in my career and this one is by far the best company that I've been associated with. Today I'm the president. I didn't come in as the president, I just came in like anybody else. So the experience I had was very positive. 

It was really more about the reputation that the company had as an employer that drew me more so than the nature of the industry or the nature of anything else. So there's a lesson in that, too. Its reputation precedes you, whether it's positive or negative.

Linda J. Hansen: Absolutely and to the listeners, I just want to let you know, that I have been at Arnold Motor Supply, as I mentioned earlier, and really had a great chance to interact with many of the employees, not all of them, but, you know, many of the employees and got to hear why they love working for the company. 

It's exciting. You know, leadership matters and it just makes such a difference and we can see that in the history of the company. But, you know, kudos to you as well, because there's an awful lot of really happy employees there now, and that speaks well to your leadership and your own desire to build a business with people.

So it's really great. Now, for the listeners, they don't know how we met. So we met actually after I gave a webinar to a business group, Ignite Christian Business, and I just gave a free webinar to them about being involved in politics and policy as business leaders and how important it is to educate employees about public policy issues that affect their jobs.

And you reached out to me afterwards, and I'm just so grateful for that interaction and for the opportunity to work with you and your company. You had such a heart for advocacy and for making sure that you not only build a business, but you build growth and positivity and you build an advocacy for the things that will help not only your industry, but your community and all the families that you serve. So can you tell me a little bit about what led you to be so driven to the advocacy mindset?

Eric Johnson: Yeah, certainly. Well, in our case, it's a pretty simple rationale. There is legislation that we've been working on, within the industry, for probably a decade, in rough numbers. It's essentially right to repair. In our case, you know, to kind of simplify it, if you think back 20 years ago, 40 years ago, even when the little OBD2 port, the little dongle that you can plug in underneath your dashboard, where if you get an error code on this on your dashboard and you want to know what it is, you take it in and the mechanic plugs in the code reader and deciphers the code for you and tells you what's wrong with the vehicle.

As we move forward, you know, we're really moving into a wireless age where the access to those diagnostic codes is no longer determined by simple proximity to the vehicle. As we start getting into telematics and the wireless connectivity from your vehicle to the cloud, you are now getting moving into a space where the diagnostic information is flowing to servers on the Internet rather than just to a device that you plug in under the dash. That can be an existential threat to independent repair facilities if they are starting to have to jump through extra hurdles to access that diagnostic information.

So here in the Midwest, we hear a lot about it in the ag sector. We probably hear about it more in the ag sector than in the automotive, but it's the same issue in both places as, farmers are, specifically with John Deere is the one that's been in the news the most, where they're unable to do some of the maintenance repair things themselves that they would like to do because all of that diagnostic information is flowing back to the manufacturer. So what we're working on in the same space in the automotive industry is we want to make sure that the vehicle owner or leasee, if you're leasing your vehicle, you're the one who is creating all of the data that is being generated by the vehicle. Your vehicle will know things like, how often do you brake aggressively? How much do you weigh? All of those kinds of things, your vehicle knows and is reporting.

We want to make sure that your information and in our case, specifically the diagnostic information for any codes, errors, failures are at the control of the vehicle owner or leasee so that you can direct those codes to any repair shop that you choose and not be forced to take it to wherever the vehicle manufacturer would prefer you take it. So at its core, that's probably a way to define what the right to repair is. And because, I typically don't want to find the federal government as the solution to a lot of problems.

I think we're usually better off when we can try to solve those things more at a local level. But in a situation like this, it probably is going to take some level of federal intervention one way or the other to kind of settle this dispute between the vehicle manufacturers and the independent repair type facilities. So we have been traveling to Washington, D.C., regularly and talking to legislators about this. I've probably gone 8-10 times to sit down with different legislators to talk through the rationale behind our position, and undoubtedly we are seeing progress from when we first started, or at least when I first started making these trips 10 years ago, this was an unknown issue. Really, the people we were talking to had not heard it before.

They were not very sympathetic to what we were trying to explain because the objection to this tends to wrap around intellectual property rights, which I totally understand. We don't want to violate the intellectual property of the manufacturers. That's one of the tenants that our whole economy is built on is intellectual property rights. I absolutely recognize that they need to have their intellectual property protected. But what we're trying to get to, is free access to the diagnostic information, any personal information that is generated by the vehicle to make sure that the vehicle owner has that. Over time we are seeing that our advocacy is working.

We actually got to the point of a bill in the last Congress. It made it through to the committee and we thought we were going to get it through the committee to the House floor and it didn't happen. Typical election year, you know, things get a little squirrely in an election year in terms of priorities.

So, the bill's been reintroduced and we're back at it again, trying to get it through the House so that we can get it through committee to the House floor and then hopefully get it over to the Senate. But without question, the advocacy has been effective. It's not happening as fast as I would like.

This is why I'm not in politics, because I don't have the patience level to wait for all of that stuff to happen. I just want it to be done right now. That works great in the business world, but in the world of politics, it's the art of the possible. So you just got to keep playing the game.

Linda J. Hansen: It's true. I often say that trying to get regulatory reform is like climbing up a seven layer spiderweb and you have to touch every single intersection of the spiderweb, every single connection. By the time you get up to the seventh layer, that's just when somebody leaves Congress or it's the end of the term or whatever and then you have to start over. It's just so frustrating and you're back down at the bottom. It's like climbing a mountain over and over again. But eventually it does get done. You just try to get farther and farther and educate more people. It really has to do with education. 

The right to repair bill and that whole issue. So listeners, I want you to know if this is something that concerns you, please call your Congress person, your elected representative. It's H.R. 1566. That's H.R. 1566.

You can just call the Capitol switchboard 202-225-3121. You can ask for your elected official and just say you want to leave a message about the right to repair and you can give the bill number and ask them to support it. If you are a vehicle owner or someone who leases a vehicle, you don't even have to be in the automotive industry or the ag industry. Just everybody who maybe wants to just fix their own car, and get their own auto parts and go fix their own car. This is very, very important as we move forward. It's really about consumer choice, independent freedom, and then also just the economics of it. It helps people save money as well, and it helps support small businesses. It isn't then just the large manufacturers who are deciding who can work on a vehicle or farm equipment or any kind of large truck, anything like that. It's just really important legislation, I think.

In addition to it being at the federal level, wherever you're listening from, there is legislation in all 50 states that is at some level of movement through state legislatures. So you could just contact your state officials and say what's the status of the right to repair bill? Or you can just look it up. It's easy to find, but a lot of people don't know about this. I really didn't know a lot about it before I got to know you. I mean, it's another one of those things that is, in my mind, common sense.

It's common sense, so I think there's a lot of things that we're advocating for nowadays that are common sense. And that is good, but that really affects your industry. So I'm glad we could talk about it. Another thing that we wanted to talk about was tariffs. And we may actually have you back again soon once everything about tariffs kind of unfolds here.

We're recording this before the reciprocal tariffs have taken effect and things. But, there's been a lot of fear about tariffs and especially with the automotive industry. I know even the United Auto Workers and others are in favor of these tariffs. They say it's great for the industry, and we're starting to see some of these automakers bring their production back to the U.S., which will bring more jobs back here, and it will really help not only the American worker, but the American economy. So your thoughts on the tariffs?

Eric Johnson: For us, I tend to default to free trade. You know, I think everything is better in a free trade environment. So by default, I'm not a fan of tariffs. Now, that said, if we are pretending that we're in a free trade environment today or were prior to any tariffs, we're also kidding ourselves because, free trade, the implication is that it's free in both directions. So I do understand that the reciprocal tariff makes sense in the way of trying to get to a level playing field. As far as how the tariffs are impacting us, it's creating a lot of work for our analysts and our pricing department, those kind of people that have to continuously process new costs and recalculate prices.

It is an inconvenience from that regard in terms of, is it increasing some of our costs to the consumer? Yes, there are some, because we have no choice. We have to pass it on. We can't just eat the difference. But, it's my hope that if done well, done strategically, that it will have the result of increased production within our economy. We're in a production driven economy. We left the gold standard back in the 70s. Basically the value of the dollar is determined somewhat by how effective we are at producing things. I do think that there are some possibilities.

So while I am on the surface, a proponent of free trade and don't like tariffs, I do see that there is some potential for some good to come of it. It's my hope that the tariff, if used as a scalpel, can be very effective. If used as a sledgehammer, it maybe not so much. Right now it feels a little too sledgehammer-ish, I don't know if sledgehammer-ish is a word, but we'll use it. But I understand what we're trying to get to on the other side. I do see a path to get there. So, right now I'm cautiously optimistic about the way the tariffs are being applied.

There are a few that are going to be more painful than others, and I'm hoping that we can work through those more quickly and get some of those to be smoothed out. As a distribution company, we don't manufacture anything. So we aren't going to see a movement of manufacturing to the United States. That really doesn't impact us directly because, as someone who is not manufacturing anything, we don't employ people overseas. We don't employ manufacturing here. But again, as an economy that's really based on what we are producing, there certainly is some potential upside to seeing a movement of jobs back into the United States and the accompanying economic growth that comes with it. 

So a long winded maybe is my answer to your question. I don't think it's certainly not anything worth panicking over. I think we need to stay the course and let the tariffs work their way through the system. I do hope in the long term that we can step away from the tariffs or at least with being quite as aggressive with the tariffs and get back to a more free open trade environment.

Linda J. Hansen: Yeah. When I think of free trade, it's like fair trade. I would really like to have it be fair and I like the idea of the reciprocal tariffs because it's just fair. Like, that's great. I think, for a long time, we have not been on the side of fairness. The American taxpayer has been the purse for the world in so many ways. We need to stop that. We need to be America first, not necessarily America only, but America first and think of American workers and the American economy and everything first.

So it's like in any situation when you think, even of self-care, you can't take care of someone else unless you're healthy yourself. So we need to make sure our economy and our businesses, businesses drive the economy. It isn't the government that drives the economy. It's business that drives the economy because the government has nothing unless business creates it, really. I think this is just helping people to understand that more because it's causing people also to just look at the issue more.

I think, like we've talked personally before about DOGE and what DOGE is finding out. We're seeing how much money is being wasted in our government and we can look at the difference in what should be spent versus what is spent and all of that.

It's just a really important time in American history where we're all waking up to these things. I do think the tariffs are kind of waking people up a bit and people are saying, whoa, I get that. And people are willing to do hard things. People can do hard things. Like you said, it's a little disruptive. It's a little hard in some ways.

But it's just like if you're ill or, you know, something needs repair, right? You sometimes have to go through an unsettling time first, but you know, a remodeling time before you can get to the desired result.

Eric Johnson: So one of the positives that we've seen is, even for me, I pay more attention to these things than most, I didn't know the extent to which our goods were being tariffed overseas. I mean, I knew it was happening, but I didn't know the extent to which it was happening. I found that to be interesting, as the administration has tried to get that message out. I do appreciate the fact that they tend to be wanting to use the tariff as leverage, as opposed to just saying, well, we're just going to raise revenue by slapping on a tariff, because that's just as inflationary as if you're trying to raise revenue by slapping on an income tax.

That's probably what I meant earlier, when I was talking about using it like a scalpel. So that is, I would say, a positive that it's bringing more awareness to what other countries are doing from a tariff perspective. Again, if free trade is our goal, then anything we can do to apply pressure to other countries to remove some of that tariff is a good thing.

Linda J. Hansen: It is. It really helps everybody. It helps the nations, but it helps, you know, the individuals in the nation. So, it's great, and education is good. I think the transparency that we're seeing now, so much more of this is out in the open and if people want to learn, it's available. I think that's exciting. I would like to have you back to discuss the tariff situation especially, and even to give an update on the right to repair at some point in time, because your industry touches everyone.

There is, you know, really no one who doesn't drive in a vehicle or ride in a vehicle at some point in time, right?

Eric Johnson: And buy goods that were carried in a vehicle.

Linda J. Hansen: Exactly, exactly. It touches everyone. Before we close, I have one last question. I know you chose to make a point to educate your employees and you brought me in you you are using the Breakroom Economics® course, you are very concerned about making sure your employees understand about, you know, the issues that affect their jobs, you know, not only at the federal level, but at local and state levels as well. What would you say to other employers who feel hesitant or unsure. What would you say to them about the importance of not only advocacy outside of your company, but inside as well?

Eric Johnson: Yeah. Like I said, I have long advocated outside, but I don't think most people within the company really understood. I would talk about the fact that I was doing it. I don't think anybody, many people really appreciated that it was important. What has kind of changed my mind, I've actually been reading the book ownership thinking, and ownership thinking at its core, I would define it as the importance of educating employees, and a lot of it is just transparency. So we are engaging this year in kind of a three pronged educational initiative, where we're trying to educate the entire company on finances, just at a real core basic level. 

You know, when we sell a dollar's worth of products, what happens to that dollar, how much of it goes to the bottom line, how much of it goes, and without getting into great detail or anything, we want to try and help them to understand help everyone within the company understand what happens to the dollars as they flow through here, where do they go? What things do we measure? What is important? Why are we measuring those things? What does that measurement mean? I might put it on a website or talk about it in a company update. But if I've never really defined what does this measurement mean, the value isn't there. So that's one piece. 

Then we also are educating, and we've always done the second one, but it's things within the industry, things like right to repair, things that are important to training on things that are new technology to things that we may be selling or whatever else. So that's the second one.

Then the third one is the economy and policy and how we fit into the big picture, and why we do things like, send someone to talk about, or why I might send a message out to all the people in Iowa District 1 saying, hey, your representative is on this committee and it's really important for you specifically to call. I want the whole company to call, but really you in that district are the most important. So please call.

Why is that important? Because you're going to get a lot more buy-in when they understand the why. A lot of that is driven by this ownership thinking book, which has helped to shape my thinking about it and help to put it in concrete steps that we could take. So that's where the Breakroom Economics® fits into that third piece is helping them to understand the economy and policy and how it could affect us as a company.

Linda J. Hansen: It was such a blessing to me the first time you talked to me after you went through my course and reviewed it. You said it really helps them think like an owner, and you told me it really helps them get the big picture. My goal is to help people not only understand that, but then understand the big picture in terms of their role as a citizen, making sure they understand how it all fits into citizenship and everything. It's just a blessing to work with your team. I'm thankful for that and thankful for your advocacy over the years for important legislation like right to repair. So if people want to visit an Arnold Motor Supply store, where would they go?

Eric Johnson: We are located about 80 facilities from two thirds of McCook, Nebraska, who we just added yesterday, they are our newest store, they are also our westernmost. So from McCook, Nebraska, all the way through Omaha, and then on through Des Moines and into the Quad Cities into Illinois. We have a few in the southern tier of Minnesota, Northwest Missouri, but primarily it's in Iowa and Nebraska.

Linda J. Hansen: It's exciting, and people can go to arnoldmotorsupply.com to find out more information. Of course, if you are in the repair business, you definitely want to be working with them. Do you have any other final comments before we close?

Eric Johnson: No, as you know, I do want to again, just shamelessly talk about the book, it is a great story. If anybody has an interest there, it is on Amazon. Anybody that wants to further conversation, to get ahold of me, the easiest way to do that is via LinkedIn. With the name Eric Johnson, unfortunately, there are a lot of us on LinkedIn. So, it might take a little bit to find me. But, if you search for Arnold Motor Supply, Eric Johnson, you'll find me. That's where I'm most active in the social media space. I love talking about the company, love talking about the history of it, and there's some good lessons there for anybody who's an entrepreneur in business.

Linda J. Hansen: Well, it truly is, and you're a great example and a great leader, which is evident when you meet your team, and you're there on site. So thank you.

Thank you so much for your time for the podcast, and thank you for taking time to educate your employees about the important issues that affect them every day, and thank you for being an advocate for the issues that affect your industry.

A lot of people don't, they'll just complain, they're not part of the solution. They're only part of the problem. So thank you for being someone who wants to be part of solutions, and that's just a great example as well. So we'd love to have you back. But, everyone go to Arnoldmotorsupply.com. You can find him there or on LinkedIn. Thank you, Eric Johnson for being on the podcast today.

Eric Johnson: Thank you and appreciate it.

Linda J. Hansen: Thank you again for listening to the Prosperity101® podcast. If you enjoyed this episode, please subscribe, share and leave a great review. Don't forget to visit prosperity101.com to access the entire podcast library, to order my newest book, Job Security Through Business Prosperity, the Essential Guide to Understanding How Policy Affects Your Paycheck®, or to enroll you or your employees in the Breakroom Economics® online course. You can also receive the free ebook, 10 Tips for Helping Employees Understand How Public Policy Affects Their Paychecks. Freedom is never free. Understanding the foundations of prosperity and the policies of prosperity will help you to protect prosperity as you become informed, involved and impactful®. Please contact us today at prosperity101.com to let us know how we can serve you. Thank you.