Ziegler Supersystems, Inc. January 2004 Dealer Magazine Article

Business Really Sucks!

You know me. Now I'm not one of those perpetually happy sappy smiley bubbly plastic phony people, always smiling, never down, bouncing and laughing and dancing my way through life. I have my moods; quiet times, angry times, and sad times. But through it all you gotta say, I am an optimist.

Whenever someone asks me how I'm doing my standard answer is, "Man I'm excited...this is the best day of my entire life."

When people do business with my company, our energy level is contagious. I couldn't tell you how many times we've received compliments on our staff and the high-energy, friendly enthusiasm people feel over our telephones when they call our offices.

Well, let me tell you, I love what I do and that attitude drives everyone around me. I am one of those people who can't wait to get to work and I usually drive home in the dark. In my company, we live and breathe success.

Traveling more than 250 days a year, when I am in town in my office it is not uncommon for me to speak to more than 100 people in a single day. That's not counting e-mails and written correspondence. Recently, I told a reporter that I believe I can get more automobile dealers on the telephone than any other living human being on the planet. Life is all about the awesome power of relationships isn't it?

Okay Ziegler, where is this going?

Today was one of those days where the office was alive with activity. We are coming off of another record year and our big dilemma today was that our Sales Manager school has already nearly 70 registered and paid students and we are still two weeks out. Usually, the last two weeks account for the majority of the attendance. Where are we going to put them? My wife Debbie, and Bill, my technology guy, were on the phones all morning buying more furniture for the classroom. What a great problem to have. My consultants are booked, our classes are over flowing, and I have speeches and consultancies booked wall-to-wall all of the way into the spring. I love this country.

My day started off returning messages left on the service over the Thanksgiving holiday (Today is December 2). The first dealer I spoke with was a General Motors dealer from Texas. Exchanging the normal pleasantries, I asked innocently enough "How's business?"

"Oh man," he said, "business really sucks! Is it this bad everywhere or just here?"

Now, bear in mind, I had just returned from presenting to a General Motors 20-Group that met the week before in Florida. There were some Texas dealers in that group that were raving about how good their business was, and their numbers backed it up. I know dealers selling every make and model of car imaginable import and domestic highline, midlines, and economy in every state and, I've got to tell you from experience, it ain't all that bad. Some dealers are pumping out units with good profitability while others are hunkering down waiting for the storm to pass.

The point is that business is what you make happen. Some times are tougher than other times granted, but your choices are simple. You can aggressively attack the market or you can lie down and die. It's still all about attitude isn't it? Regardless of your current reality, you cannot allow negativism to infect your dealership especially if it's coming from the dealer himself/herself. Recently I've visited dealerships and listened to managers telling me why you can't make any money on these cars in this market because the competition has whored up the market so we're gonna whore it up right back at them. Does anyone remember when we used to make our money selling cars and trucks?

The Fudd Factor strikes again

My secretary just plopped the latest issue of Auto Snooze on my desk and I immediately turned to page 12 to read Keith Crain's editorial feebly attempting to defend Dave Power. In the editorial, Crain said he sort of agrees with Dave Power (J.D. Power) that selling all brands of cars in one retail location is probably a good idea although Crain admits that, in reality, it probably wouldn't happen anytime soon.

The gist of the editorial as I read it was that Dave is just a basically nice guy who expressed his opinion and we shouldn't jump all over him because he's done the industry and the consumers such a great service over the years with his research and analyses.

I wonder if Dave Power pulls all of those wonderful statistics and analyses he's evidently so famous for out of the same orifice where he found those bogus numbers he was spouting in the Wall Street Journal?

Of course, I subscribe to the more direct old western style lynch mob mentality.

I sort of expected Crain to ride to Power's defense, even though Power's position is indefensible. They have been cronies running in the same circles for years. I suspect, as he stated, that Crain probably agrees with a lot of if not most of what Power said in the Wall Street Journal about our archaic protective franchise systems.

Me personally, I am still trying to figure out exactly what great services Power has rendered to our industry. It is no great secret that I have been saying for years that J.D. Power and Associates is the dealers' and the manufacturers' enemy. In my opinion, you'd have to be a stone cold certified, registered-with-a-government-agency moron to think otherwise especially in light of Dave Power going on record, in the number one business publication in the world, saying that the franchise laws should, in effect, be torn down and be replaced with a Wal-Mart model selling multiple brands. The gospel according to ole Dave sounds like we're going to sell cars like they was candy bars.

No matter what they say or do this thing with the dealers and J.D. Power and Associates ain't gonna go away. I suggest that you don't allow yourself to get caught up in the damage control Power's spin doctors are trying to put on this incident. His words in print have exposed who and what he really is. They would have you to believe that he is just this benign, harmless, well-meaning nice guy simply expressing his personal opinion. (Barf)

I have said in the past that Power and his company apparently have a perceived agenda to put franchised dealers out of business. It appears to me that Power was deliberately and consciously trying to poison the public further against the dealers by blaming the franchise system for the high price of cars as if we are cheating the consumers by existing. We're talking about the same dealers and manufacturers who he charges vast amounts to measure their customers' satisfaction while he is, at the same time, stirring up consumer dissatisfaction in major national publications this appears to be a classic double-cross. My perception of what we are seeing here is the man is creating bad feelings against an industry he has sponged and leeched off of for decades. All of this is just my opinion, granted but I for one believe this guy and his company are pure calculated evil.

Even after reading Dave Power's weak retraction in the Snooze he still didn't back off now did he? Nope, ole Dave's flimsy pseudo-apology was just an explanation of why his first article was right and (Ziegler paraphrase) why we're just too stupid to get it on his superior plane of perception and enlightenment as to exactly what the consumers really want and need according to Power 3:16.

Reading the Dave Power regurgitated excuse for an explanation stirred up many feelings and emotions within me. Help me out here; is there still such a word as "Nincompoop" in Webster's dictionary?

Road trip

Here's a little food for thought. What if the Chrysler nameplate were phased out and a new brand would emerge called Daimler? We'd be talking about German engineering and American manufacture and distribution. The old historical Chrysler stigma of poor quality put to rest once and for all. Far-fetched you say? Oh, let's just say there are faint rumblings that I am hearing from somewhere way out there in the distance.

With their backs up against the wall, the Germans took their dog and pony show on the road in November blitzing eight regions over a six-day period.

One dealer writes, "Mr. Ziegler, check this out: I just attended the regional DaimlerChrysler dealer meeting. Gary Dilts, Dr. Zetsche and the entire DaimlerChrysler management team were there. The meeting was upbeat and enthusiastic with very impressive product coming in the near future, but then they announced changes to the Five Star programs. Of course, they're raising scores to qualify again. Secondly, they are now requiring us to sell Chrysler Certified Cars! Before it was just a benefit of Five Star -- now a Requirement! They can't run their new car business, yet they are going to dictate to us how to run our used car business! Now it's a good program, don't get me wrong; but it is a major intrusion into our business to force it on us. I'm not sure if you think this is an issue or not. Thanks again for your voice."

One outrageous Gary Dilts quote when he was speaking in the Midwest hit me kind of hard several dealers said that Dilts announced "....we just aren't going to hang Five Star signs in front of dual-franchised dealerships anymore. It just doesn't make sense!"

That quote cracked me up when I heard it. Does it strike anybody else that here we have DaimlerChrysler chasing J.D. Power customer satisfaction numbers by forcibly (maybe even illegally) eliminating dualed points and penalizing and punishing those dealers, when, at the same time, we've got ol' Dave himself in the national press saying he wants every dealership selling everything under the same roof. Go figger.

Am I wrong or has Dave Power really double-crossed these manufacturers? (Especially Ford). I wonder what his company's fate as Blue Oval Certification administrators is going to be.

Now here we have Dieter Zetsche and company facing the end of their three-year turn-around plan that didn't (As in still in toilet and fighting the swirl).

Back in April 2001 in an article titled Defiance, I wrote the following: "As a commentator and a futurist, I feel that Chrysler executives will create a lot more pain as a result of their apparently asinine business plan to restore the company to profitability."

Then in September of 2001, still commenting on their three-year turn-around plan, I wrote at the time:

"Hardly worth mentioning but still bleeding money out of every artery, DaimlerChrysler posted another 58 percent loss in net profit in the second quarter bringing losses for the first six months of this year to more than $1.3 billion, compared to a profit of slightly more than $3.0 billion at this point last year. Dieter Zetsche voiced a warning, 'Don't expect anything dramatic in the short-term.' As a matter of fact, DaimlerChrysler doesn't even plan to return to profitability until 2003. These German guys, they crack me up. Dieter and Jürgen are trying to cost-cut themselves into a profit; these guys are congratulating themselves in press conferences because their billion-dollar-plus losses were less than expected

as a matter of fact DaimlerChrysler doesn't even plan to return to profitability until 2003."

Now I am vindicated (again still as usual...history has validated what I was saying three years ago).

You see, Dieter's ambitious cost-cutting has saved the corporation more than $7 billion. Wow! That's impressive. He should be awarded the Jacques Nasser/ Nick Scheele trophy for aggressive accounting. Of course, in the meanwhile revenues are off more than 20 percent over the same period last year and new products are moving slowly (As in serious lot rot). The Pacifica and the Crossfire (hope of the future product) are the subjects of some serious "Days Supply" discussions.

And what about Celine Dion you ask? Well-ll-ll...According to Automotive News, Celine wasn't even mentioned during the whirlwind road trip. Evidently Celine is sort of like out. This is evidently the second time she's sang the theme song for Titanic. Who would have guessed that? Me!

In the September issue of DEALER magazine I wrote, "Great new product bad marketing concept the Pacifica launch featuring Celine Dion was weak and flaccid. So, before he resigned as Chrysler group executive vice president of global sales, marketing and service, Jim Schroer renewed Celine Dion's contract to the tune of $14 million for more artsy-fartsy, cutesy, low-key image commercials."

Now Chrysler executives are saying the company will not use her image in their commercials just expensive-ass background music evidently.

What's with all of this renewed pressure to sell Chrysler Program Cars you ask? Well, my curiosity was tweaked by a headline that read

Chrysler Waives Lease Payments to Boost Sales

Whoa there Big Fella! I think I am getting a clue here. Chrysler is emulating General Motors early termination program that waives several payments and allows customers to opt out of their leases early if they buy or lease a new car. If Chrysler is successful at pulling in leases ahead of schedule then excuse me, I might be a little slow here maybe we need to force the dealers to sell these puppies for us as certified cars. Hey, let's make it a Five-Star requirement. Yeah, that's the ticket.

In other news

Laughing about the Steve Lyons Bobble Head Dolls that Ford Motor Company issued last year featuring the caption "It's all About Share" (Market Share) "Well, one dealer sent me an e-mail saying that Jim Press at Toyota was thinking of putting out a Toyota Jim Press Bobble Head Doll with the inscription "It's All About Profit."

I couldn't help but shake my head sadly when I read the story in the November 17 Automotive News by James B. Treece titled Losses force Mitsubishi to rethink turnaround plan. According to the article, Mitsubishi lost another $687 million in first half of its fiscal year, compared to an operating profit of $193 million for the same period last year. Of course, if you've followed my columns, you know I was all over those bogus numbers every step of the way. Losing $935 million in credit losses as a result of those goofy zero-zero-zero programs it was running last year while posting those bogus paper profits while, all the while, it was storing huge losses in bad paper.

Mitsubishi President Rolf Eckrodt said at the press conference announcing the results that the U.S. losses were a "one-time" and a "temporary" effect. "I never expected a situation like this," he said. "You could call the U.S. a business accident. But things happen."

Did he say, "a business accident?"

I think what he meant to say was "a catastrophic train wreck."

Ziegler speaking here of course, I told you so. I was talking to a man last week who is in the repossession recovery business "da repo" man. Not actually. This guy owns a corporation that does a lot of Mitsubishi's recovery. He told me that the biggest problem is Mitsubishi put some really hardcore credit criminals in these cars with one year to the first payment date and now he can't find them. Most of them are apartment dwellers with a lot of mobility. The truth is they can't find a lot of these cars. I have heard reports that more than 60 percent of Mitsubishi's loans last year were zero-zero-zero or balloon payments.

As I wrote in last month's issue, I have a lot of confidence in the leadership and management ability of Finbarr O'Neill and his management team. Unless I am totally off base here, my impression of the problems at Mitsubishi is that everything from here will be uphill. If anyone can turn this thing, those guys are up to the job.

I said it and I am sticking by what I said

In last month's column I wrote several short sentences that prompted a lot of phone calls and e-mails. I said that I predict that Suzuki is about to become a major premium franchise and I suggest if you have a reasonable opportunity to get one of those points, I wouldn't hesitate to jump all over it. Of course, I could be wrong I've been wrong before (but not very often).

I received a correspondence from Suzuki's ad agency asking me if they could use that quote in their literature; I said "Sure." After all, I said it. But Just to be sure we all understand each other I said it long before I knew anyone at Suzuki.

Zig speaks to 60 Minutes

By the time you read this article you will most likely have seen or heard about the interview I did with the CBS News program 60 Minutes. The program is scheduled to run in December, but I am honor bound not to write about it until after it has aired. Needless to say, the show is about issues in the car business and is negative about our industry. My role on the show was to attempt to put some balance in the story from a positive viewpoint. My interview with Steve Kroft of the 60 Minutes team lasted more than two hours, of which they will edit down to seven minutes on-camera. I think my interview was positive for the industry in light of a story about bad practices. My heart was in a good place and I hope the editing was kind to me...after all this is 60 Minutes we're talking about here. Nothing is certain until I see the actual show. My thought was that if it wasn't me, someone else would have been sitting in that chair. In the event that the show might run in early January instead of December, I have already written my article for the February Convention issue of DEALER magazine. In that article I will be explaining why I was on 60 Minutes, what the issues were, and what I was attempting to accomplish.

Talk about a hot car...

I have never ever had a car that drew so much attention in public. About three weeks ago we took delivery of a new Cadillac XLR. This is the most incredible car I have ever experienced. Everywhere we go it draws an enthusiastic crowd. It's always the same question "What is that?" My wife and I crack up because I find myself giving walk-arounds to total strangers at hamburger stands and in the middle of shopping center parking lots. Young kids, teenagers and seniors are all over it everywhere we go.

So, now my wife (blond) drives the XLR most of the time and I still drive my testosterone-fueled Escalade with the wheels and grille package. I am so grateful for all of these blessings and pleasures. Isn't life great? You know my business is incredible.

But You know maybe business really does suck. Or maybe if you think business sucks it might be that something you're doing sucks or something you're not doing sucks. Maybe your training and your processes suck. Maybe your advertising sucks. The truth is that if you believe business sucks then you are going to be 100 percent correct and you can go out of business with the righteous knowledge that you were right about that. Regardless if I were a dealer, I would never allow creeping negativism to infect my sales department. Recently I have met dealers who were infected with this disease themselves and others who are carriers.

Believe me it's all about attitude.

On the road again

I have now performed keynote speeches at more than 51 state automobile dealer association annual conventions most recently I was keynote speaker for the New Jersey Dealers NJCAR Convention, the AICPA Convention and the Oklahoma State Dealers Convention. I'd love to speak to your state convention this year who do you know that can help make that a reality? I need your help. Many times my speeches are fully-sponsored and my fee is paid in advance.

At this year's NADA Convention in Las Vegas I will be presenting a seminar workshop titled Are You Ready to Run With the Big Dogs? I will also be the keynote speaker for the annual AutoTeam America event being held on the Friday before the convention, with a speech titled "Shock and Awe" I promise that that presentation will be irreverent and obnoxious. Please try to sign up for that one early in that there are usually more than 500 to 600 in that audience.

I will also be doing some work for Motor Trend conducting seminars in the spring.

Taking my last swig of Louis XIII Cognac, I glance at the clock, 4 a.m. - fantastic! The best day of my life starts in a few hours...

This Man Means Business!