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Affirmations of Determination
The sun was rising slowly over Atlanta silhouetting the buildings against
the skyline in the dim early morning half-light. Tired and wired, I was
running on caffeine and doughnuts as I drove into town for the first time.
Seven hours on the road, I had left Jacksonville just after midnight.
Atlanta rush hour traffic would scare the hell out of Richard Petty…we’re
talkin’ eight lanes in each direction…everyone’s driving 85 miles per
hours…weaving in and out and everybody’s changing lanes constantly. Here I
was driving this old beat up buy-here/pay-here car with the mattresses
tied up on the top of the roof and my every earthly possession in the car
with me. You might say all of this was a little overwhelming for a
Jacksonville boy from the Westside. Broke, divorced and angry, I was
experiencing the lowest point in my life…thirty-five years of age…starting
over again…again.
Alone in the solitude of that car, driving through the night, I had a lot
of time think. I made two decisions that evening. The first decision was
that I was going to be a success. You see the revelation came to me that
success is a conscious, top-of-the-mind decision a person makes and
commits to.
The second decision was more complex, certainly less simplistic, but it
was the most impactful decision I have ever made. I made a lifelong
commitment to study my profession (the retail automobile business…sales
and marketing) as surely as if I were studying for a masters degree in any
other profession. I read every book, attended every seminar, listened to
every tape…modeled myself after successful people…and eliminated losers,
whiners, wimps and criminals from my life. You are who you think you
are…and you’ll have what you think about…and you’ll be who you hang
around. I blew into town with $400 in my pocket and within five years I
was a millionaire.
In my quest for knowledge a friend gave me a copy of the book Think and
Grow Rich by Napoleon Hill. Even though that book was written nearly
seventy years ago, I have read it at least a hundred times. Many times
when I am alone in the car I still play the recorded version. The theme of
the book is subtly interwoven throughout… “Anything a man (person) can
conceive and believe he can achieve.”
From the vision to the decision onward to actualization…the power of
bringing excited conceptual thinking into reality has catapulted my life
toward greater success.
Which sort of brings me to the point…imagine my frustration when I see
slow, plodding, unimaginative bean counters, clueless MBAs, treacherous
alleged research firms, and an army of assorted low-energy techno-geeks
dicking around with the dealers and dragging our industry deeper into the
toilet.
General Motors’ renaissance is product driven while Ford continues to look
for accounting and decontenting solutions. Maybe that’s why the Bob Lutz
culture at General Motors has filled the air with electricity while Ford
is reaching deep into the well dusting off and recycling retired
executives like Bob Rewey and Ross Roberts for guidance. There was this
article on the front page of Auto Snooze with a picture of Bill Ford
smiling (God knows why this man would be smiling?) and pictures of retired
Ford guys he was tapping for advice. Maybe Billy read my article last
month pointing out Ford’s lack of depth on the bench.
Excuse me, I really like Ross Roberts, in my opinion he’s a great “Car
Man” and a fine human being. He was responsible for Ford Motor Company’s
domination in the light truck market starting in the early nineties…BUT…he
was also in charge of the Auto Collections, a double-cross of monumental
proportions. We all know how that train wreck turned out.
On the other hand…when I think of Bob Rewey… (Now this is just my personal
opinion, some people may actually like this guy) When I think of Bob Rewey
I envision the poster boy for perceived treachery and bumbling
incompetence. In my opinion this guy was the Darth Vader prototype. I
heard a rumor once that Bob holds a masters degree in “Hench”. Scuse me
folks…wasn’t Rewey the guy that was at helm, jumping off the ship just
before it ran up on the reef? I always thought of Bob as being the father
of the Auto Collections…and the father of Blue Oval Certification…and the
father of Ford’s commitment to two-year leasing. Unless I really misread
Bob, I always thought of him being the anti-dealer guy. As far as his
track record…what track record? Now I’m no MBA here…just a high school
graduate from the Westside of Jacksonville…I could be wrong but it appears
to me that almost everything Bob touched lost Ford millions of dollars
(probably billions) and created the massive problems we are facing today.
I always thought of Bob as the reverse King Midas…every golden thing he
touched seemed to turn to poop. At least that’s how it appears to me
anyway.
The heat is on! As you may or may not be aware; I receive hundreds of
emails every month from dealers and industry insiders. On any given month
I probably speak with at least 200 dealers, managers and reporters. I have
been the keynote speaker for 38 State Automobile Associations’ annual
conventions in the last year and a half. I have many good friends who are
writers for some of the top national newspapers and magazines, in and out
of our industry. As a result of my contacts, many of the breaking
front-page stories you see in national publications were a result of a
phone call I made. Most recently I have received dozens of correspondences
and emails about Ford’s heavy-handed tactics concerning the NADA Dealer
Attitude Survey. It seems like dealers are receiving dozens of calls and
letters from factory representatives urging them to send in the survey.
Get this! There is even an “in-house survey” being done by the regional
managers that directly mirrors the NADA Survey. This is the most shameless
blatant intimidation I have ever seen or heard of…this is the “thought
police” at work. Even Steve Lyons sent out correspondence urging dealers
to send in their surveys. Now, I am hearing that national representatives
on the Ford Dealer Council are sending out similar correspondences and
phone calls (confused about allegiances maybe). It seems that Ford is in
denial here…they believe that the bad surveys they have been getting is
because enough people weren’t sending them in. In other words the confused
factory spin on their bad surveys is that the only dealers sending in the
surveys are malcontents and troublemakers. This is overt, on the table
survey rigging if you ask me. Well, I suspect the Ford Dealers are going
to continue to use this survey to send Ford a powerful message. “Dear
Ford…we have raised your VOC score requirements another two points and you
failed therefore we are decertifying you.”…Signed: your customers, the
dealers.
I strongly suggest that dealers forward all factory survey fixing
correspondence directly to the NADA. Oh, by the way…I agree with Steve
Lyons. You should send in those surveys…and be sure to tell the truth.
In a related item…I just read where Bill Ford will be the keynote speaker
at the 2003 NADA Convention in San Francisco. The article said he will be
talking about his company’s relationship with their dealers, speaking at
the opening session. Did they say his company’s relationships with their
dealers? That ought to be a real hoot.
I’m going to get off of Ford’s back for a couple of paragraphs here and
write about something positive.
The strong stench of testosterone filled the air as buyers lined up at
showrooms nationwide to catch a glimpse of the new H2 Hummer. Wow! Didn’t
I tell you this was going to happen? I have heard dealers already have
deposits and backup deposits on the entire 17,000 unit first year
production. General Motors has a winner here that will continue momentum
deep into the millennium. We’re not talkin’ about some kind of pansy-ass
cheap little one-price car here. I doubt you’ll ever see a silly bunch of
alleged sales people standing around singing their goofy little “Hummer
Song” to a buyer taking delivery.
Passages…Hot rumors from informed sources tell me you can expect to hear
Bill Lovejoy announce retirement at the 2003 NADA convention in San
Francisco…according to sources close to the source his replacement will be
John Smith, the man who spearheaded the new momentum breathing excitement
back into Cadillac Division. I will miss Lovejoy. He is one of the few
factory executives I have an open and honest dialogue with. On the other
hand, maybe I’ll be able to build similar rapport with John Smith. I know
I admire his work. Big change from the Zarella era huh? I love Lutz and
Lovejoy…Wagoner is a leader with direction and good decisions paying
off…but, you know, these guys aren’t half as much fun to write about as
Zarella was. I miss Ron.
More passages…if you follow my column, you know I have said repeatedly
that Brain Kelley was better qualified to supersize fries than to run
Lincoln-Mercury. Well, for whatever reason Kelley has resigned and moved
on. Reportedly, Brian left to assume the position…he is now the CEO of
some Global Moving Company. Cool Dude! That sounds like a big step up to
me. I always thought of Brian as being one of the last of Nasser’s
dangling mistakes still hanging around.
The headline on the front page of the Snooze said… “Hazel heads LM.”
It seems Hazel replaced Brain Kelley. Now I’m thinking, I didn’t even know
Shirley Booth was still alive…well, guess what? They weren’t talking about
the maid on the television series…this is Darryl Hazel they’re talking
about here, a lifetime Ford veteran who may actually know something about
retailing cars, as in the guy who probably should have gotten the job in
the first place.
Daimler-Chrysler has returned to profitability but informed insiders tell
me it is almost 100% the results of cost-cutting NOT through dramatically
increased unit sales. In truth, the new introduction Chrysler Group
products are world-class but the public perception has not yet completely
caught up with that reality. The new Jeep Liberty is a well-built,
well-engineered product with a lot of appeal, an incredible value with
current incentives but once again sales are flaccid. The new Chrysler Town
and Country and the Quad Cabs are still the bread and butter sellers for
the Group. Durango is dead in the water at the wrong price point and weak
incentives. In my opinion, the Chrysler 300M is the best value in the
passenger car arena…price, quality, value and incentives. The real
excitement is not yet in the pipeline.
I am really starting to warm up to this guy Deiter Zetsche. (Cool
mustache, sort of looks like he should an actor in the remake of the
movie, Willie Wonka and the Chocolate Factory) He’s made a molehill out of
a mountain. When he took over amidst scandal, distrust, poor product and
weak sales and a $3 billion loss…who woulda’ gave him a snowball’s chance
in Hell of pulling this ox out of the ditch? Chrysler’s stupidest
miscalculation was cutting back the dealers’ profit margins to
unacceptable levels. This ill-advised strategy alienated many dealers and
gave Chrysler Dealers less of a competitive edge in structuring deals the
banks would accept. Of course, the wild card is still in the deck back in
Germany. Juergen Schrempp is still under siege from attacks by disgruntled
stockholders and the $9 billion lawsuit spearheaded by Kirk Kerkorian is
still moving forward. Assuming the Daimler-Chrysler merger survives
critics and lawsuits, there is a lot of premium competitive product on the
drawing boards. From concept the Crossfire sports car is going to be a
showstopper. If you’ve followed this column…I have been excited about the
high-performance hemi V8 and the possibilities that go with that
territory. Deiter Zetsche plans to return to rear wheel drive passenger
cars, which is an idea long overdue.
“If I only had a brain”… Sung by the Scarecrow in The Wizard of Oz.
Speaking of Strawmen…In an obviously apparent (to me anyhow) end run
around the spirit and intent of the law…the Texas Motor Vehicle Board
turned “thumbs down” Don Hudler’s application to operate Saturn
Dealerships in Houston and Dallas. What’s wrong with that you ask? Well,
first you’ve got to realize that Mr. Hudler is the recently retired
Chairman of Saturn Corporation who conveniently retired just at the right
time to apply for ownership of these dealerships which are currently being
operated by the factory. Holy Golden Parachute Batman! You see sports fans
the factory has owned and operated these stores for a year, which is the
maximum, allowed by Texas State Law. What an incredible coincidence
Batman! So Hudler retires but does not step down from his position as CEO
of the Saturn Retail Enterprise (factory ownership front) unless the deal
is approved by the state. Then they finance the sale through Motors
Holding using Hudler as what I perceive to be a straw purchase for the
factory.
Texas ain’t buyin’ it pal…it is against the law for the factory to own and
operate dealerships in that state no matter what kind of puppet dealer
they use to try to front the operation. If you’ll recall, Saturn got away
with it several years ago in Florida but in that case they used a minority
dealer as the front guy, which gave the deal a little (very little)
additional credibility.
I predict that you’ll see General Motors install a minority dealer
(probably Hispanic) in those stores (still fronting for the factory) when
Hudler’s appeal is finally rejected, as it should be.
Looky…looky…looky! Guess what I got here? I have a memorandum to all KIA
Dealers, General Managers, and Sales Managers. It is dated July 10th,
2002. It says it is extremely confidential…in other words, I assume that
means don’t be sharing it with reporters and columnists like me. The
originator is Terry Mahoney Southern region sales Manager for KIA.
The Memo appears to be an endorsement for the Power Information Network
(PIN). It says that PIN brings the information revolution to the KIA
Dealer network. Get this…it says “Best of all, for KIA retailers the
service is free.” Here’s how it works …sorta maybe…”Dealer sales staff
completes F&I screens as normal part of sales process. Sales are stored
for overnight transmission to PIN. Whoa there big fella! J.D. Power and
Associates is getting these dealers to sign up to send them all of their
sales records showing what they sold…what bank…what customer…new and used.
AND, they promise that your information is confidential. J.D. Power and
Associates (PIN) promises to aggregate, coagulate and un-constipate your
precious customer data and financial information and provide you with
useful statistical information regurgitated from your raw data by this
stellar impartial source of indisputable renowned high integrity.
Remember, this is the same J.D. Power and Associates that inspects dealers
for some factories’ certification programs for pay.
Excuse me folks…I have to disclose out front that I really don’t like
anything about these people…nor do I trust them. Of course that’s just my
personal opinion based on my personal perception and may vary from
individual to individual. I am not saying that J.D. Power and Associates
or their officers are disreputable, nor that they are criminals, nor am I
saying they are dishonest and not trustworthy. I just don’t like them or
trust them as far as you could proverbially throw them. BUT, remember,
that’s just me. What I am saying is, that if I owned a car dealership it
would be a cold, cold day in Hell before I would ever allow J.D. Power and
Associates with their strong ties to the factories to have access to my
data. Of course many dealers might feel differently about that. It’s a
free world.
Archiving back seven years ago…I said at the time that one-price selling
was blatant price fixing…and when sponsored by the manufacturer, I said I
felt it was an anti-trust laws violation. I have repeated that in articles
through the years. Of course, at the time I was talking about Saturn with
their protected territory and stated one-price. Of course Saturn says
their dealers are free to set their prices…well, we’ll see.
Now, word is out that The U.S. Department of justice is investigating
Mercedes Benz USA for price fixing and potential anti-trust violations
stemming from practices initiated when Michael Jackson (Currently with
Auto Nation, not the former African-American guy that sang Thriller) cut
the margins a few years back and initiated one-pricing guidelines. At the
time I said this was going to happen and now it’s here. Grand Jury
subpoenas have been served and discovery is underway…let’s see how this
washes out, it could change the industry. It would certainly upset some
factory schemes.
The biggest impact this case might have is that the government’s issue is
that the factory cut margins down to levels that prevented consumers from
being able to negotiate. If Mercedes is charged and loses, this could mean
that all manufacturers would be required to establish reasonable profit
margins and not restrict negotiation. This might be an earthquake.
Told you so…a solitary tear rolled down my cheek as I read the headline
stating that the “E-era” at Ford is over. It seems like Ford has finally
given up and folded Ford’s ConsumerConnect unit. This is the division that
coordinated all of Ford’s E-crap left over from the Nasser era. Once
again, there’s another instance where I might have saved Ford another
several hundred million if they would have read my column with an open
mind. Earlier this year GM phased out it’s E-GM Unit in a similar move.
Am I mistaken, or was it J. D. Power and Associates predictions that led
the industry into the e-marketing mania that proved to be such a
monumental disaster financially? I need to research some of the claims
made by Chris DeNove, a senior partner at J.D. Power and Associates at
some of those e-commerce symposiums he spoke at. Seems to me I remember
something about “Wave of the Future” rhetoric…I have fuzzy recollections
about some kind of statements about Dealers that weren’t tuned in were
going to be dinosaurs being sucked down into the tar pits (or something
similar) when the technology revolution starting selling all of the cars.
Do me big favor readers. I need your help. Just for laughs…I have some
material but I’ll bet you can dig up some more. Send me all of the J. D.
Power and Associates literature you can find from a couple of years ago
that was about the future of technology and the Internet in Auto
Retailing. I have the notes and handouts stashed somewhere from DeNove’s
presentation in Washington at the UCG event as well from the First
Conferences event that was held in Atlanta.
Well the sun is coming through the blinds and I have been sitting here at
the word processor most of the night…it is now August 1st and I am excited
and optimistic about the business and sales into the future. Oh, I know
there are wars and rumors of wars as well wild fluctuations in the stock
market. Who would have thought that Ford Motor Company stock would fall
this low? My teenager could buy a share with his lunch money and still buy
a soda. Recently I staffed up to eleven employees and we moved to a
larger, upscale facility. My plan is to aggressively attack the business
and take my share. You see I have vision and focus. If you are saying
“Business Sucks” then, guess what? You will be 100% right. In coming years
there will be extreme winners and severe losers and it is your choice to
control your destiny. Anything a man (person) can conceive and believe you
can achieve.
More Food for Thought
As I was putting these thoughts to paper, as usual; I was sipping at a
snifter of premium Remy Martin XO Cognac. It’s not like I drink day in and
day out like that…it’s just become a tradition when I write these
articles.
In the month of June I was the keynote speaker for seven State Automobile
Association Annual Conventions. On June 28th, I spoke to the Maine Dealers
at the beautiful seaside resort at Samoset in Maine. Before my speech two
dealers asked to come forward for a special presentation. I was expecting
they were going to honor one of their members. Imagine my surprise when
they presented me with a bottle of Remy Martin Louis XIII cognac in a
beautiful Baccarat Crystal Decanter. This is a 100 year-old premium
cognac…the best in the world. They said it was in appreciation for my
stand on the behalf of dealers everywhere…in appreciation for being the
dealer advocate. Now, I am far from a soft and cuddly sort of guy but it
sincerely choked me up that you, the dealers, my friends have held me at
this high level of esteem. I want to express my deep appreciation to John
B. Darling of Darling’s Automotive in Bangor, Maine and Jack Quirk Sr. of
Quirk Auto Park in Bangor. I know they had searched all over and I was
told they had to drive sixty miles to buy that bottle of Rare Cognac to
present to me at that convention. It is deeply appreciated…I am touched by
your friendship.
I am speaking again at this years’ NADA Convention again in San Francisco
and I am inviting everyone to please attend my session and help support
the message. FYI…I was rated in the top ten at the 2002 convention with a
92% rating. Thanks!
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