As you’ve probably already guessed after reading the title of this month’s article, I will be mentioning Jim Press somewhere in the following paragraphs.

I just returned to Atlanta last night after two days training on-site at the Dick Nourse Family dealerships in southern Ohio and I am leaving next week to work with the John O‘Neil Johnson Toyota dealerships in Meridian, Mississippi. That will be directly followed by a visit to the Kia AutoSport dealerships in Florida. Most recently I’ve been working with Park Cities Ford in Dallas, and the Chris Auffenberg stores in St. Louis. The reason I mention those dealerships is to demonstrate that when I write these words it’s more than conjecture, supposition, speculation or projection. I am out there week after week, all over the country, working and training in virtually every type of dealership. I am living what I write, not guessing what it must be like.

Cash for Clunkers was an incredible shot in the arm for our entire industry. And, regardless of what detractors may claim it was totally revenue neutral for the government and the taxpayers. In other words, this program paid for itself in sales tax revenues it generated for the states…plus registration fees…a lot of unemployment payment was eliminated and employment was created when the manufacturers and suppliers brought workers back to meet demand, which created additional payroll taxes. Not to mention the additional taxes created by increased sales commissions paid to salespeople. Of course it even extends to the junkyard that scrapped the cars and other vendors up and down the food chain. And, the government’s own claim that cleaner cars with greater fuel economy is one of the greatest economic and green benefits of the program.

What I strongly disagree with is the cacophony emanating from industry experts, including my friends at J.D. Power and Associates and other assorted observers and statisticians suggesting that September automobile sales really-really sucked because we pulled so much business ahead. No offense to these pundits and researchers, but I’m saying that is totally wrong.

I speak to literally hundreds of dealers and even more managers and salespeople and other dealership employees every month, and on top of that, I am out there in the field actually working in these dealerships all over the country. What I have heard repeatedly, and what I saw first-hand was that the Cash for Clunkers customers were not people that would have been in the market, not now or in the future. For a large part, these were more upscale, mature, and financially secure consumers than we were customarily used to seeing in the showrooms.

September didn’t just marginally suck, actually it mega-sucked, but let’s face it, dealers were also out of inventory with little to nothing in the immediate pipeline. You can’t sell off empty shelves.

I believe what we’re experiencing now is going to be with us for the rest of our lives and will only gradually emerge as we return to normalcy as we once knew it.

Think back to your parents, grandparents or great grandparents that lived through the Great Depression of the ‘30s. That horrifying experience permanently changed the way they lived for the rest of their lives. People of the depression generation were cautious… overly cautious…and overly frugal for the rest of their lives.

When prosperity returned and the economy rebounded, they still held back and were afraid to take any type of financial risk. Even though they were financially secure, they lived the remainder of their lives procrastinating in fear the depression would return so they continued to live ultra-conservatively. The average car on the road today is 10.4 years old according to recent research by Lange Marketing Research. People are hanging on to them longer and they’re built better.

Mark LaNeve

This man is my friend. Don’t ever challenge me on that; I am unwavering in my affection for this man as a personal friend.

Not only do I really like Mark personally, I think he has been a valuable asset to General Motors and a friend to the dealers.

Today, October 7, as I write these words, Mark LaNeve’s resignation was announced in a press release from General Motors’ CEO Fritz Henderson, “Mark has contributed significantly to GM in several key positions, including transforming the Cadillac brand and leading the Vehicle Sales, Service and Marketing organization during one of the most challenging periods in GM’s history. In the interim, Jim Bunnell, executive director of sales operations, and his team will continue to follow through with GM's dealer network plans.”

Short and sweet, “Mark's going to join another company to pursue an interest outside the auto industry.” That was Henderson’s announcement to the dealers.

Well, I spoke with Mark on his cell phone a few moments ago at length, and let me assure you, it was his choice and an opportunity that was difficult to pass up. By the time you read this you’ll know where he’s headed. I have promised not to tell.

Mark LaNeve and I had several long one-on-one meetings in Atlanta and Detroit, several times at Renaissance Center with various top-level GM execs. I could talk to this guy and express to him concerns dealers were communicating to me. And he would listen…something I’d never experienced from any other GM executive at this level.

He and I got into heated debates complete with raw language and colorful expletives from both directions about what I thought was screwed up about General Motors. The guy listened and was receptive to ideas.

Although Mark never said it to me, I heard it repeatedly through the grapevine…the exclusive Ziegler grapevine…when they took the “marketing” responsibilities away from him and gave it to Bob Lutz, it sort of pissed him off. Now, it wasn’t Bob Lutz’s fault, but all the same it was the final slap across the face to a loyal soldier.

Lest we forget, this is the guy that pushed Cadillac back into the spotlight with edgy stealth-designed styling and Led Zeppelin music in the commercials. He led the division’s return to prestige.

Well, Mr. Bunnell may have set a world record for holding this position for the shortest amount of time in GM history because before the sun set they announced that Susan Docherty is the new vice president of U.S. Sales replacing Mark LaNeve (Bunnell?). I really hope she and I will establish a dialogue and an open channel of communication as I had with her predecessors. Hey Susan…call me!

I wonder how Brent Dewar received the news. Susan is no doubt qualified and deserving of the position, but I’m sure many insiders were thinking Brent would be LaNeve’s replacement.

All of the indecisiveness and continual reversals are giving me a headache… déjà vu… is Fritz the guy? No doubt that General Motors needs a strong leader with vision and charisma. I’m wondering if Fritz will be eating Thanksgiving Dinner at Renaissance Center?

What happened with Mark LaNeve? First of all, he was the guy who inherited the dirty work cleaning up Rick Wagoner’s legacy…General Motors’ bankruptcy.

It was LaNeve in charge of overseeing the disenfranchising of hundreds of General Motors dealers. I assure you these orders came from higher up. This was never LaNeve’s idea.

Mark LaNeve acted as a soldier under orders. It literally tore his heart out because he knew every one of these dealers personally …they are his friends…he truly is a dealers’ guy. He has spoken to me on occasion most recently about the pain of the job. Mark loved dealers and was your best advocate. It was a heavy burden and it wore on him. I’m sure this also played into his decision to leave.

Let me be clear where I stand on this issue. There was never a financially sound business reason to terminate any dealer that was profitable, financially solvent, was not out-of-trust, and treated their customers well. But, that is exactly what happened. The majority of forced dealer terminations, Chrysler and GM, were calculated, political, and repercussion-driven.

I believe what we witnessed here was vengeance under the protection of law…especially those dealers terminated by Chrysler Corporation under the inept leadership of Bob Nardelli and Jim Press. With Chrysler, it was never a business decision; it was a vendetta.

When Jim Press told the dealers, “We will have a long memory”…I personally believe he made good on that threat.

When I watched Wagoner, Nardelli and Mulally testify before Congress…I knew then that Alan Mulally at Ford Motor Company was the only one who walked away with his personal honor and integrity intact.

Then when Jim Press testified, every word smelled like a lie to me as he sat there with that trademark hang-dog look on his face, of course I might be wrong about that…but, I don’t think so.

Excuse me! Where was the board of directors when Rick Wagoner was losing more than $85 billion dollars? I believe they were sitting on the sidelines with their thumbs in wet dark places. They even gave him several “votes of confidence.”

This limp-membered General Motors’ board of incompetents allowed their corporation to swirl down the toilet under the guidance of the most documentable incompetent leadership in the history of the corporate world. Bear in mind the board is being replaced, but we’re shutting the barn door too late. Mark LaNeve inherited an impossible job.

Saturn

Every article, every speech, every newsletter, I’ve been cheering loudly for Roger Penske’s vision to rescue Saturn by creating a new, agile “virtual corporation” with outsourced manufacturing.

On September 28 the Detroit Free Press announced that Penske and General Motors would close on the sale of Saturn on September 30, two days away. Jill Lajdziak, head of GM’s Saturn division, had already put in for an early retirement package, evidently in anticipation of working with Penske.

This deal would have saved 350 Saturn retailers that have been hanging on since GM made the announcement to phase out the brand.

Then, September 30, the date of the closing, at the last moment, just as champagne corks were popping and it looked as if the deal was done, the announcement came that Penske had backed out and there was no sale.

Penske’s vision was to outsource production of Saturn vehicles to Samsung, a South Korean manufacturer owned by Nissan-Renault.

According to the Detroit News and others close to the situation I’ve spoken with, it was the Renault-Nissan’s board of directors that pissed backward on the deal, pulling out at the zero hour. I could make some sort of comment here about doing business with the French.

Roger Penske was fully dedicated to making this work. People close to him that I know and trust have told me he did everything possible to pull it off. We can only offer him the highest praise and gratitude for making the effort…he was “all-in” on this one, personally involved and committed.

And, I’ve heard rumors that General Motors may have sabotaged the deal to eliminate another competitor. That is totally untrue.

Wasting no time, General Motors immediately began the process of liquidating the division. Meeting with the surviving Saturn retailers they discussed a plan to put it to bed with financial assistance from General Motors as they disposed of 12,000 units still on the ground.

Truthfully, Saturn lost more than a billion dollars every year since its inception after a $3 billion start-up.

It was extremely profitable for the dealers early on even though the manufacturer took it in the shorts. Many dealers blamed the manufacturer’s dogged support of the unprofitable Saturn division, trying to make the failed concept viable, for the closing of Oldsmobile, which was a profitable nameplate when they shut it down.

The original Saturn theory failed miserably in spite of great intentions…it was a flawed Pollyanna concept. I said so in many articles. Then, more recently the Saturn philosophy was adjusted, and re-adjusted more in line with the hard-cold realities of the market.

Regardless, the Saturn retailers were great dealers who invested heavily, bought into the concept, and drank the Kool-aid – many of them personal friends of mine. Personally, I feel great sadness to see these stores shuttered. Many of my friends are once again feeling the pain after the elation of hope being lost.

In recent years I have gone from being Saturn’s worst critic to actually consulting and training quite a few of these dealerships. This Penske deal was their last hope. There’s no other white knight on the horizon and these dealers are out of time.

Jim Press is a bogue

Say it ain’t so! No secret, I really dislike this guy, but that’s a personal thing between him and me and several thousand others. But, who would have ever in their wildest dreams have thought Jim Press is a bogue?

For those of you non-car-people reading this, a bogue is car business slang for a person that has bad credit because they live beyond their means and don’t pay their bills. In some dealerships in other regions of the country, bogues are referred to as drecks, roaches, credit-criminals, ropes, get-me-dones and lumpies.

In some more socially correct circles people have tried to sanitize the stigma of being a bogue by creating such polite language as credit challenged, sub-prime customer or equity-impaired.

Excuse me! Bogues are bogues…and catering to bogues has collapsed the entire world economy. Wasn’t it the sub-prime mortgage business that started the economy swirling down the commode? Bogues brought the world economy to our knees.

I am sick of bogues, sick and tired of being nice to them. Pay your damn bills and lose that smart-ass entitlement attitude. You did it to yourself. We didn’t buy all that stuff you didn’t pay for. Feel sorry for you? You want sympathy, I got your acorn right here.

Oh well, excuse me. I got carried away and lost track of the subject for a moment. I was talking about Jim Press’ financial problems and went off on a rant about bogues that had nothing to do with Mr. Press and his problems.

When I read the article first in the Detroit News, and then in just about every other industry publication in the world, I was shocked at the headlines proclaiming Jim Press owes the IRS and a credit union more than $1.4 million. Nearly a million and a half…wow!

And, get this, he is allegedly being sued by the credit union for defaulting on a $609,000 loan, which was then Toyota Federal Credit Union before it merged and became part of Western Federal Credit Union. They claim he made a couple partial payments and then stopped.

In the car business we know that every bogue has a story. They view themselves as “victims of circumstances.”

Well, last November a year ago, Press allegedly penned a letter on Chrysler stationery begging to the credit union to back off and give him more time… "In this terrible credit environment, I have exhausted other avenues of getting a new loan which would allow me to pay you off. My last and least desirable alternative is to notify you of the situation."

According to everything I’ve read about the situation, Press blames his situation on a nasty divorce and that Chrysler Corporation had eliminated his anticipated bonus (evidently the bonus he expected for doing such a great job).

Reportedly he has an ex-wife pulling down $40,000 a month in alimony plus $16,000 in child-support. And reportedly, Press also bought…now get this… a $13.5 million dollar townhouse when he went to work for Chrysler. Nope, not a typo, thirteen-and-a-half million dollar townhouse. Also it’s been reported that he and his ex-wife own a $2 million home outside Los Angeles, and also reported that he owns a $470,000 condominium in New Orleans.

All of that on a salary of $2.4 million from Chrysler. This guy knows how to stretch a dollar.

Oh well, keep checking those exit ramps looking for the guy with the cardboard sign.

Toyota

I heard about this first from Toyota dealers I’m working with, and then, when it came out in the mainstream media it was no less astounding. Toyota is budgeting $1 billion for marketing and advertising in the fourth quarter. These guys (gals) are playing hardball. This guy has an intense focus on doing what must be done to reverse the market shift Toyota has experienced. With the company’s losses expected to exceed $5 billion this year, Toyoda is apparently making all of the right moves. Currently the company is still sitting on cash reserves in excess of $20 billion.

In recent months I’ve written in almost every article and speech that Toyota’s new president, Akio Toyoda, was going to completely re-invent the company by going back to core competency. Look for heavily subsidized leases and financing coupled with huge cash incentives and more dealer advertising co-op at the local level.

Also you’re going to see Toyota making an even greater commitment to producing a full line of Prius hybrids.

A side note: In an unprecedented gesture, Mr. Toyoda actually apologized publicly for the death of a California family that may have been caused by a Toyota defect when the floor mat jammed the accelerator. As a result, Toyota is experiencing the largest recall in automotive history, recalling more than 3.8 million Toyotas to correct the floor mat defect.

Social media gives rejected dealers a platform

I am a huge advocate of using social media: Facebook, YouTube, My Space, etc., to sell cars and perform customer relationship management. That’s what I will be speaking about at NADA next year, but now some of the terminated Chrysler and General Motors dealers are fighting back…getting their message out there on YouTube. Follow this link and see what it’s all about: http://www.youtube.com/rejecteddealers. I especially like the part where they show videos of Jim Press testifying, as well as videos of other factory executives.

Tammy Darvish, vice president of DarCars Automotive Group in Silver Spring, MD, a regional NADA director, member of AIADA and co-chair of the Committee to Restore Dealers Rights, said her daughter came up with the idea…go figure. You’ve got to admire Tammy. She is an in-your-face, no-nonsense professional who will tell you exactly what’s on her mind.

Most recently Darvish has been extremely vocal and active in getting congressional investigation of the methods and processes the manufacturers used to single out which dealers they would terminate through the bankruptcy. Her organization and her efforts have exposed issues that won’t go away, especially with Chrysler’s handling of the selection of which dealers to terminate and the fact their franchises were given to other dealers in the same communities. It’s going to be airing some extremely dirty laundry as Chrysler’s criteria comes to light.

And now, according to a link on the NADA web site, a coalition has formed including the NADA, ATAE (the organization that represents automotive trade association executives), NAMAD (the National Association of Minority Automotive Dealers) and CRDR (the Committee to Restore Dealer Rights) have united behind a common proposal to restore dealer rights. These powerful groups are now working together instead of independently, arm-in-arm, to achieve a common goal of restoring the rights of dealers who may have been the victims of reprisals and repercussions for not always going along with the manufacturers. I am pleased to see these organizations communicating in harmony instead of working separately for this just cause.

Presently there are congressional efforts in motion to reverse dealer terminations completely if General Motors and Chrysler refuse to negotiate in good faith some sort of equitable deal.

Well, this article has taken two full days to write. The Mark LaNeve announcement and the collapse of the Penske Saturn deal caused me to have to scramble and rewrite a lot of it. I’ve had several snifters of Remy Martin Louis XIII cognac each of the last two nights.

I’m speaking at NADA again this year and I strongly urge all of the dealers to please make your reservations to be there. We need to support the NADA and you need to get together and support each other, learn new industry best practices and just see what’s happening. Do not miss the convention. It’s too important. The NADA needs you right now, and believe me, we need them, now more than ever. As the manufacturers flex their muscles and try to overrun dealers’ rights and do an end-run around state franchise protections, the NADA and the other organizations listed in preceding paragraphs are your advocates; don’t fail to show them support. Be there! Get up right now and make your reservations.

Also, I am keynote speaker for the Oklahoma Dealers Convention and the Massachusetts Dealer Conventions in November and December…as well as I was the keynote speaker for the AICPA Convention in October.

Bummer! I just had to turn down the keynote speech for the New York Dealers Convention because of a scheduling conflict. I have keynoted that convention four times in years past and I love that group.

Keep those e-mails and phone calls coming, I want to hear from you.

Jim Ziegler is the president of Ziegler Supersystems, Inc.