Ziegler Supersystems, Inc. March 2004  Dealer Magazine Article

American Decency Alive and Well

Call me a sentimentalist perhaps, but I think there are values, ideas and concepts worth living, fighting and dying for. Most recently my articles have been at the center of many discussions and debates within and without our industry. Needless to say, I have never been accused of laying back or holding it in.

January 13 marked the 22nd anniversary of one of the most moving events I ever experienced in my entire life. Even now as I write these words my eyes are tear-filled and I am once again experiencing the powerful emotions these memories evoke.

In 1982 Air Florida Flight 90 crashed into the 14th Street Bridge on takeoff, landing in the Potomac River in Washington D.C.

As chance would have it, I was in Washington at the time attending a one-day F&I conference. Although I didn't see any of the events of that day first hand (actually I watched it all live on television with the rest of the world), being there in Washington as it happened brought me closer to history.

There was a terrible snowstorm, heavy ice and deep, freezing temperatures the plane crashed due to icing. The tail section of the plane was sticking up out of the freezing ice-filled water and four survivors were clinging to it as their lives slipped away I saw it live on television when the fifth survivor came up from beneath the water and joined them. I was less than five miles away in a hotel.

Fireman and rescuers stood helplessly on the banks of the river with no way to save the few survivors who were running out of time. A helicopter overhead dropped a lifeline to them and a man quickly grabbed it and was pulled to safety. It was after 4 p.m. and the survivors had been in the water for nearly an hour.

That's when it happened. When the helicopter returned and dropped the lifeline to a second man, he passed it to a flight attendant and she was lifted out to safety. Upon returning, the helicopter once again dropped the line to the man and once again he passed it to another injured passenger and stayed behind as the other man was lifted out to safety. Another helicopter attempted to lift out two women on a single lifeline, but they both fell back into the freezing water.

As for the man who had so selflessly handed off the lifeline three times the world watched in horror as he fell unconscious, released his grip and slid into the freezing water. He could have gone first, as another man had chosen to do, but instead he made a decision. The news reports referred to him only as an anonymous balding middle-aged man.

God Bless Lenny Skutnik

As for the two women who fell back into the water, a rescue pilot jumped into the water and tied the line around one of the women and himself the other woman, Priscilla Tirado, had climbed onto a floating sheet of ice and was lying there calling for help her head went under as firemen stood helplessly watching on the banks. Then, out of nowhere, there was this guy I remember it like it was yesterday A guy just ran out of the crowd of bystanders. This guy just pulled off his coat and shoes, ran past the police and firemen, and jumped into the freezing water with no regard for his own life and swam out to the woman. God, I was cheering so loudly there in my hotel room as he swam with her toward shore. A fireman broke ranks, defied orders, tied a line around himself and then jumped in to help him as they neared the bank.

The man who just appeared out of the crowd was Lenny Skutnik just an average working-class guy on his way home from work who became an accidental hero because he did what was right when it had to be done. President Reagan honored him later as his guest at the State of the Union Address.

My heroes will always be the "Lennys" of this world. And, in my own way, many times I have found myself jumping in at great personal risk in a sincere attempt to help others so sometimes when this column is really out there and over the top remember it comes with great risk, and I sometimes pay a heavy personal price.

I just returned from the NADA Convention in Las Vegas. I felt a lot of renewed positive energy and optimism on the convention floor and in private conversations. On Friday morning I had the honor of addressing the General Motors Minority Dealers annual conference at the Aladdin Hotel and that afternoon I was the keynote speaker for the prestigious Auto Team America CFO conference at the Paris Hotel (and casino). Several hundred executives were in attendance.

I reminded the audience that I had spoken to that group three years ago and I revisited with it some of the predictions I had made at that time before I launched into a rant about perceived poxes and plagues, rogues, scoundrels and criminals, as well as morons, idiots, bumblers, Fudds and incompetents who are infecting our industry. I believe I may have mentioned J.D. Power and Associates, Honda Excell, Saturn Division, Jim Padilla, Pierre Gagnon, Scion, top box scoring, the Honda Elephant, Ford's business plan, Jürgen Schrempp, and Dick Colliver, in the course of my presentation as well.

During the balance of the convention I performed five NADA workshops, which I felt went exceptionally well.

I had a one-on-one visit with my pal, Pete Gerosa, for about an hour. We discussed industry trends and I presented Pete with a "Jim Ziegler Bobble head Doll," which I am assured now sits in a place of high honor on his bookcase. Pete is an exceptional guy God help us, I think we bonded. Could you imagine anyone asking me or Pete a question and being unprepared to hear the answer?

Really sorry that I missed Jim O'Connor this year we usually have communion and share something at these conventions. I hold him in high esteem.

As of this writing I still haven't seen the 60 Minutes program that my February column addressed. The show was originally scheduled for the first week of December and then it was pushed back because of Saddam Hussein's capture and then again because of Michael Jackson and then the playoffs and then the Super Bowl who knows it may have aired by the time you read this.

It's all about product and, for the first time in years, Ford appears to be on the comeback trail. The new F150the 500the Futura the 2005 Freestyle sport wagon and the incredible new Mustang as I walked through the Ford exhibit there was once again a feeling of magic in the air as dealers stood around talking excitedly about future product.

The new Mustang is a show stopper. My first car was a 1966 Mustang and, even though I am married to my Cadillacs, I will have one of the first 2005 Mustangs in my third garage space.

The only negative I am hearing is that the new Freestyle looks like a regurgitated Windstar. Of course, a Ford representative told me" You just have to drive one!" Excuse me; that's what they all say about the Honda Element and the Pontiac Aztek and several other butt-ugly cars. "You just gotta drive one!"

On the other hand, I walked through the Toyota exhibit and took another look at the Toyota Scion I carefully walked around it and objectively weighed all the negatives and negatives in the end coming to my previous personal conclusion that yes that sucker is definitely one ugly son-of-a-bitch.

Of course, I read the press releases and the puffed up articles about this allegedly phenomenal car the official barfline had this quote: "Scion's target buyer is information rich, time poor and highly technology savvy," said Jim Farley, vice president of Scion in a company press release. "Scion caters to this influential generation with unique products, a distinctive dealership environment and a revolutionized sales process, all complemented by an astonishing sticker price."

Excuse me don't you guys know when you're being hyped? Toyota has the hard sell in high gear to get dealers to sign up for this abomination and I predict it's going to bite the big one. Toyota's rolling out a 23-state blitz in nearly 400 showrooms. You guys and gals are going to get burned.

Remember I said this there ain't no such thing as "Generation Y" buyers. What will happen to Toyota dealers is what Honda is already experiencing with the Honda Elephant. You are going to be systematically moving your own existing customers down into cheaper, less profitable cars ugly-ass square little cheap cars at that. The average buyers of the Honda Element appears to be in their 40snotice when the Element arrived in Honda showrooms that Civic sales immediately started to take a major dump.

In recent articles I have predicted a market share slide for both Toyota and Honda. Even though Toyota has recently overtaken Ford Motor Company in the number-two position for global sales, I don't expect that title to hold. I know what I am writing here is going against the grain of every industry analyst and expert. Of course, Ford is on the ropes barely breaking even in the U.S. market and bleeding money out of every artery in foreign markets. Ford Motor Company is trying to dodge many bullets right now an easy target.

What I see is Toyota and Honda losing market share to other foreign competitors like Nissan, Hyundai and Kia, as well as to renewed competition coming from General Motors' barrage of great new products. Bear in mind that I am in no way saying Toyota and Honda are going to take fatal hits I am simply saying they can't maintain current levels especially Honda. As predicted in previous columns over the last three years, Honda is already seeing erosion globally, especially in Japan. And now, American Honda has announced an increase in first quarter advertising budgets by more than 50 percent over last year. Look for Honda to spend somewhere in the neighborhood of $160 million advertising in the US market in the first quarter. Also look for increased incentives on the Honda Civic approaching $1,000 a car.

If I were a Toyota dealer, I would double check the alleged sales figures coming out of California. You might want to check with some of your California counter part snot the factory bell cows call around before you stroke a check.

I looked up Scion in the Japanese dictionary; it roughly translates into "Saturn".

Coincidentally, the word Camry in Japanese means "Buick."

Archiving past articles I have written for DEALER magazine over the last 10 years, I have on many occasions discussed the fact that the Saturn Division of General Motors cannot justify its continued existence operating the way it has been. I invite you to revisit my article titled Twist and Shout published in the magazine last November.

Speaking of Saturn

The Associated Press headline read, Changes at Saturn Mean New Identity.

It seems that Jim Ziegler along with Business Week magazine, Bloomberg News, and USA Today -- and now the Associated Press -- all seem to be in agreement that Saturn is a pig without wings trying to make everyone believe it's a bird.

According to an AP article, "Saturn once billed as "a different kind of company'' making "a different kind of car,'' is losing its distinct identity and becoming just another division at General Motors Corp."

Well, damn haven't I been saying that for at least a dozen years?

Okay, let's examine the facts here. First of all, Saturn is now just another division of GM sharing platforms, production, design and labor. Oops! That ain't very Saturn-like, is it? I heard that Saturn is eliminating the space-age composite body panels that have always been the Saturn's trademark the cars will now have sheet metal bodies...with counterpart models in the Chevrolet and Pontiac lines. The union is now transitioning to more or less the standard national UAW agreement, and Saturns are no longer exclusively built in Spring Hill, TN. And, as I have written previously, look for other non-Saturn cars to be built at the Spring Hill facility.

The company originally bragged about no incentives as part of the Saturn mystique, remember? Now Saturn is allegedly offering some of the most heavily prostituted incentives in history. In other words, Saturn is just another (yawn) division of General Motors. Every unique happy-clappy, warm and fuzzy, propeller-head innovation it tried to shove down the industry's throat at great loss and expense to the corporation has definitively failed! Or least that's the way I see it, anyway. As for no-haggle you ask? Quit it! You can wheel and deal, wiggle and negotiate at virtually every Saturn store in the universe especially when dealers are sitting on more than a hundred days'-plus supply as those puppies continue to accumulate lot rot.

According to the AP article "Last year, Saturn represented only about 6 percent of the GM vehicles sold in the United States, and it has made money in only one of the last 13 years."

What does all of this mean? Well, it means that in the future I will probably back off of Saturn because now it is just another division of General Motors as far as I am concerned. I think I might just embrace Saturn as it joins the rest of us in our day-to-day retail struggles. Saturn needed a little humility as it condescended from looking down at the rest of us.

Thirteen years ago Saturn came on the scene and punched all of us in the nose and spit in our faces. Saturn went after us and openly attacked and insulted every traditional dealer in every ad and commercial inferring we were not customer-friendly and Saturn dealers were. General Motors took heavy financial losses birthing and supporting and, ultimately subsidizing, this defective concept at the expense of the other divisions. Saturn has been the documented biggest financial drag on General Motors since its inception. Losing right at or approaching a billion dollars a year nearly every year of its existence. I blame an unprofitable Saturn for the demise of a profitable Oldsmobile. Well, now everything I ever said or wrote about Saturn is vindicated and I am validated. There is no sense in beating dead horses. One thing Saturn did prove to me beyond a shadow of a doubt in my mind is the total lack of validity of J.D. Power alleged research (my personal opinion).

Unless something Saturn does or says really pisses me off again I think I'll try to be nice to Saturn in future articles.

Speaking of Dave Power (J.D. Power III), in January Steve Lyons (Bobblehead fame), president of Ford Division, said Ford might fire J.D. Power and Associates as Blue Oval Certification Administrator in light of Dave's anti-franchise slant in the Wall Street Journal. In my opinion, that's a good thing. Lyons acknowledged that Ford dealers have an adversarial relationship or at least negative feelings about J.D. Power and Associates. Nearly 94 percent of all dealers actually despise or detest J.D. Power and Associates, according to accurate Ziegler alleged research that I paid a dollar a survey to get back (plus or minus 80 percent variance).

Excuse me Steve let me put that another way many of us here in the industry dealers managers salespersons many factory people my Labrador retriever we despise that company and everything it stands for. Steve, you know how many of your dealers wrote and called you and spoke to you at meetings lobbying you to get rid of J.D. Power and Associates. If you keep these people you are doing so knowing full well it is an insult to many/most/some of your dealers and you are deliberately antagonizing the situation by bringing J.D. Power back into your dealers' stores. That is my opinion of the situation as I personally see it anyway I might be wrong.

Since the convention I heard that Ford sort of patched it up with J.D. Power and Associates since you did that interview back in January. Believe me Steve nothing's changed with your dealers. You were on the right track before. This is your opportunity to start with a clean slate. I believe J.D. Power and Associates is the biggest single obstacle you are facing in factory-dealer relations. I might be wrong, but I bet if you fired J.D. Power with the bad reference the company deserves your dealers would be elated.

Oh oh and while I am visiting Ford I told you guys (gals) this was going to happen. The 1 percent Ford took to fund Blue Oval Certified well it's not going to be put it back from where it was taken from, is it? Nope! Ford is going to put it back into the sticker price margin for now anyway. Unfortunately, Ford will take that back after a while. I told you that you were going to get screwed on this issue way back there when Ford stole the money out of your invoice in the first place.

For some unknown reason

I had an opportunity to get the script from Jim Press' keynote speech at the infamous J.D. Power Industry Roundtable, which took place during the NADA convention last month.

Paraphrasing here, "The auto industry must take steps to cleanse its reputation for poor customer service and find ways to 'weed out the bad apples' who are cheating buyers!" Jim Press, Toyota Motor Corp.'s U.S. executive vice president and chief operating officer said to industry executives in the audience. "It's imperative that we quit making enemies of our customers and work together to speed up, simplify and improve the buying process. There can be no trace of trickery and deceit!" He went on to say" Right now we're losing the battle in the court of public opinion. We are an honorable business, but it's up to us to prove it all over again."

Allegedly, Press also said that a few bad operators can "create an air of distrust" that clouds the entire car business. According to the Wall Street Journal, Press said that the manufacturers should get more involved in stopping the dealers who were guilty of causing the problems.

Well excuse me Mr. Press referring back to the case in Memphis where Toyota Motor Credit apparently and allegedly allowed Covington Pike Toyota to mark up the interest, showing nearly $7,000 rate reserve profit and then to mark up the $300-cost service contract to right at $2,000more than $12,000 profit on a single deal. Is that the ethical and pious customer fairness you were bragging about at the J.D. Power sound bite conference? Was the list of similarly abused customers who are participants in that class-action that 60 Minutes showed me are those people exempt from the list of customers that Toyota now wants to treat fairly? Don't talk down from your haughty perch about dealers' ethics when your corporation was or is allegedly a participant in what stinks. You can make pretty speeches to get some good ink in the Wall Street Journal or to slap backs with other equally pompous, full of themselves, industry Pharisees but the question is and still remains Are you and your company co-conspirators in all that you claim is ugly about this industry? I agree with you that we need to run bad ethics, con artists, thieves and criminals out of our industry, and I have a suggestion where we can start. You're right it's all about decency.

American decency alive and well

When Lenny Skutnik threw off his coat and jumped into subfreezing water to save an unknown woman it was pure instinct absent of conscious thought. He was doing the right thing as his emotions drove his actions.

One thing that really bothered me was the man that passed the lifeline to the other passengers he saved everyone except himself. For years I have been haunted knowing that he was never identified, simply known as the middle-aged balding man. He did have a name one preacher in a sermon said "God knows his name." Well while researching this article I found out that his name was Arland Williams and he was an investment banker from Atlanta. The fireman who disobeyed orders and jumped into the freezing waters to help Lenny rescue the woman his name was John Leck. The rescue pilot who jumped in and tied the woman and himself to the lifeline was Gene Windsor.

You see, these people were important and their names have meaning.

Nearly three years ago, Todd Beamer and other passengers and flight attendants rose up and attacked armed hijackers with kitchen utensils, coffee pots and food carts. They died selflessly so that plane could not be used as a deadly missile.

Many times heroes just happen because circumstance presented them with a course of action that was the right thing to do.

Slowly and steadily swirling the amber liquid in its glass, sniffing the rapturous vapors of Louis XIII, I take my last drink whilst wrapping up my post-NADA 2004 column, courtesy of John Wendkos of Castle Dealerships in Castle, DE. John gave me a bottle on January 16. This now makes three dealers who have presented me with one of these treasured bottles of fine cognac. Sure, I can buy them myself...but words cannot describe how much it means to me receiving them from dealers like you.

This Man Means Business!