The Automotive Service Association (ASA) is concerned about inequities in the Texas Tax Code. Currently, in the Texas Franchise Tax Code, automotive repair and collision shops owned and operated by new or used car dealerships are taxed at half the rate used to tax independently owned automotive repair businesses doing identical work. The tax code classifies dealership sales as "retail" and allows their service and repair business to be included under that banner. Texas independent repairers are seeking similar treatment.

ASA is asking Texas repairers to contact their state legislators and urge them to help stop further audits of the automotive service industry until this issue is resolved.

Dallas-based Service King plans to embark on an ambitious national expansion led by new president Cathy Bonner that could double revenue over the next five years according to reports in the Dallas Morning News.

The chain of collision-repair centers, founded in 1976 by company chairman Eddie Lennox, recently opened seven shops in Houston and the success of those centers—some were profitable after three months— prompted Lennox to consider the leap outside Texas.

Most of Service King’s 31 shops and 1,000 employees are in the Dallas area. The privately held company, which says it has a 20 percent market share in the area, expects to repair about 70,000 vehicles and earn $150 million in revenue this year.

“We were able to experiment with a lot of things in Houston that might work for us nationally,” said Lennox, 57, a former body-repair man who started Service King in a three-bay tin building in West Dallas.

Bonner, a Dallas native, has no experience with auto repair. But she served as executive director of the Texas Department of Commerce from 1991 to 1994, founded The Women’s Museum in Dallas and has started and managed three marketing and communications firms.

She also is Lennox’s sister-in-law so she knows the Service King culture, Lennox said. Bonner’s primary responsibility will be to develop a strategic plan for growth, determining which markets Service King should enter and overseeing that plan.

“This relates to growth and getting someone who can help us achieve it — and not ex-technicians like myself,” Lennox said.

He believes that planning for major growth requires knowledge that he and his managers don’t have.

“Eddie approached me and convinced me I don’t need to know how to fix a car,” said Bonner, 60, a finalist in 2007 for The Dallas Morning News’ “Texan of the Year” award for her work to pass legislation creating the Cancer Prevention and Research Institute of Texas. “I just get to build on their success.”

Bonner said she intends to have a growth strategy plan completed by the first of the year.

“I had a lot of experience identifying new markets and bringing in corporations when I was with the state,” said Bonner, who was part of a team of officials in the early 1990s that helped convince General Motors Corp. to not close its assembly plant in Arlington.

Service King offers several programs that Lennox says are unique— including a computer program developed by vice president Jeff McFadden that allows insurers to monitor and audit the entire repair process.

“We also have some operations programs that [vice president] Danny McKinley put into place that no one else does, and those products really made me more bullish on growth,” Lennox said.

Despite its moves to get larger, Service King has no interest in going public, said Lennox, who holds 80 percent of Service King’s stock along with his wife. Managers throughout the company own the remaining 20 percent. “We’re well capitalized, and we have good banking relationships,” he said. “We envision doubling our revenue in three to five years.”

The new-car dealer groups in Dallas and Tarrant counties have merged into the Dallas Fort Worth Metropolitan New Car Dealers Association according to reports made by the Dallas Morning News.

Dealers voted overwhelmingly to approve the merger, which is significant because the association will represent about 250 dealers in 11 counties with annual sales of more than $10 billion. The new association is the largest dealer group in the state and should have a strong voice in state and national legislative affairs that affect the auto business.

“D-FW is now viewed as a single market, with many of our dealers having franchises in both Dallas and Tarrant county areas,” said Sam Pack, former chairman of the New Car Dealers Association of Metropolitan Dallas and a driving force in the formation of the new group.

Pack, who owns Ford dealerships in Dallas, Tarrant, Collin and Denton counties, and other dealers began considering the merger about nine months ago after Drew Campbell retired as president of the New Car Dealers Association of Metropolitan Dallas after a 25-year tenure.

Lee Chapman, 50, the former president of the Tarrant County dealers association, will head the new association. The primary goals of the new association are largely unchanged — promoting and representing new-car dealers.

“I’m really excited,” said Chapman, who was president of the Tarrant County group for 26 years. “This is one marketplace, and we want to help dealers sell more cars and help consumers have a positive sales experience.” Among other initiatives, the new association intends to call more attention to dealers’ good deeds — “everything they return to the community, from supporting Little League teams to donating to hospitals,” Chapman said.

Fort Worth and Dallas-area dealers will still put on separate new-car shows. With annual sales approaching 400,000 vehicles, dealers in the Dallas-Fort Worth region sell as many vehicles as those in some small states.

“It just made sense to combine two smaller associations into one of the biggest and strongest in the nation,” said Tom Durant, a board member of the former New Car Dealers Association of Greater Tarrant County and owner of Classic Chevrolet in Grapevine.