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Mayhem
in Mayberry
Otis,
the town drunk, comes stumbling into the Sheriff’s
office and he walks directly to his cell. We’ve all
seen him book himself into jail in at least a dozen
episodes. Aunt Bee has just won another blue ribbon
for her prize recipes and Floyd Lawson, the barber, is
so naïve that he never does quite catch on that
he’s the butt of Goober’s latest joke…again.
Barney’s
about to have a nervous breakdown because Sheriff Andy
Taylor just released Opie and his friends after Barney
had caught them red-handed riding their bicycles on
the sidewalk again. Ernest T. Bass is nursing another
broken heart and Gomer Pyle has run off and joined the
Marines.
Most
of us grew up with Andy and Opie and the residents of
Mayberry. Through the years, they’ve all become just
like our own personal friends. Remember when Andy
stopped seeing Ellie Walker and starting dating Helen
Crump? Most of us were hoping that Andy would have
married Ellie.
Walking
around town now, there’s Mayberry Union High School
and Walker’s drugstore. Aunt Bee always did her
shopping at Crowley’s market and you were always
most likely to bump into Mayor Pike coming out of the
Mayberry Courthouse. Barney and Thelma Lou, Goober and
Flora, Andy and Helen; there was plenty of wholesome
romance and family life in "Main
Street America".
There’s
Andy now. He’s pulling up to the curb in his squad
car, which has always been a brand new "Ford
Galaxy". Sheriff Taylor and all of the
characters in Mayberry drive Ford products. Even
Deputy Barney Fife drove an Edsel. Why not?
Since the very beginning, Ford Motor Company has
always prided itself on the image that a Ford was "the
car for the common man." A Ford
was supposed to be "Every Man’s Car"
that was Henry Ford’s vision that originally made
the company great?
Okay,
okay already, I’ll get to the point. The burning
question in my mind is… "Why is Ford
Motor Company apparently so willing to crap all over
Mayberry right now?" Maybe it’s
only a perception, but I am beginning to believe that
it’s the truth.
Ever
since Ford originally tried to compete directly with
their dealers with that sloppy abortion they called
the "Auto Collections", it’s
becoming increasing clear to me that was just the
first shot of a smaller battle in a much larger war.
Then,
in another show of ineptitude, Ford actually had the
testicular fortitude to take on the State of Texas in
an effort to circumvent the law by retailing pre-owned
vehicles direct over the Internet. Once again they got
their butts handed to them in a recent decision in
U.S. District Court for the Eastern District of Texas.
This cracks me up. Judge Sam Sparks minced no words.
In
its ruling against Ford, the Court stated, in part: "Based
on valid legislative findings, the Texas Legislature
has enacted a statutory scheme that attempts to
equalize the market power between manufacturers and
dealers, and further the public interest of the
citizens of Texas, by prohibiting manufacturers from
acting in the capacity of a dealer. Thus the plaintiff
(Ford) is prohibited from selling motor vehicles to
consumers by mail, phone calls, leafleting, skywriting
or drum signals …as well as on a plane, on a train,
in a house, or with a mouse."
I
had the honor to be the keynote speaker for The Texas
Automobile Dealers Association annual convention in
Galveston in July. I love those guys (gals)! When they
say, "Don’t Mess With Texas!"
they mean it.
Over
the last eighteen months I have repeatedly predicted,
in speeches and in print that the showdown was at
hand. In recent issues I said that they were going to
position this as an e-commerce issue and that
high-powered lobbyists and other assorted
factory-lackeys disguised as consumer advocate groups
were going to take this issue to the public. Well, I
am sure by now that we are all aware of John Stossell
on ABC television’s 20/20 and that one-sided,
slanted piece he did painting the dealers with an
image of seedy, anti-internet, protectionists. I am
sure that advertising revenues from the factories
never entered their minds at the network when they
turned their rabid attack dogs loose.
Well,
now we are seeing "The Alliance of
Automobile Manufacturers" and "The
Association of International Automobile
Manufacturers" seeking an injunction and
repeal of the new strong Arizona State Franchise Laws.
Ford and General Motors can publicly say and insinuate
that they have abandoned plans for "Factory
Ownership" of retail dealerships but
their actions are louder than all of the bullcrap and
press releases. The manufacturers own these
organizations. They are the manufacturers. An
interesting side note for all of you import dealers
who thought you were not part of this fight, please
note that the Import Manufacturers’
lobbying arm was also involved in the injunction?
Of
course, all of the manufacturers are carefully
following the battle over Ford’s latest shot at
their dealers…"Blue Evil
Certification". I have to guess
that it’s probably just another foul witches brew
most likely whipped up in Rewey’s cauldron.
One
thing that appears obvious to me is that Ford’s Blue
Oval Certification Program is going to put most of the
little guys out of business. In my heart, I believe
it’s designed to do exactly that, to get rid of
small town dealers. I get hundreds of emails from all
types of dealers every month. You can’t imagine the
horror stories I am hearing from the little guys, "The
Select Ford Dealers" about the way the
factory is treating them. It’s bad enough that they
can’t get the hot selling inventory, now the factory
has put them directly in the cross hairs with this "Blue
Evil" program and is about to pull the
trigger on them. The factory is throwing up every
obstacle from requiring expensive mandatory signage to
having J.D. Power agents inspecting their personnel,
parking lots and toilets. Excuse me; I think this deck
is stacked. The program is designed so the little
guys, the small town dealers can’t afford to
compete.
This
is not a customer satisfaction issue. It stopped being
about customer satisfaction when they reached into
some dealers’ pockets and grabbed their money then
turned around and gave it back to their favored
selected dealers in the form of pricing advantages.
Now, I am predicting that Mayberry is going to be
screwed. Main Street America which has bought Ford’s
trucks, cars and tractors for nearly a century, which
has already been receiving second-class inventory and
field representation, is now going to be getting
higher prices when their local dealers can’t afford
to buy the certification. Many small town dealers are
certainly going to disappear, which I personally
believe is Ford’s plan (and General Motors plan).
Some of these dealers have served their communities
for more than three generations, eighty and, even
ninety years in business. How many of these small town
dealerships were originally set up by "Old
Henry" himself, who offered their
grandparents his personal handshake and his word as
well as a contractual agreement? You know it was
different then. Henry Ford’s word was worth
something.
As
predicted in my article "To Serve Man"
which appeared in the July issue of Dealer Magazine,
Ford is going to initially relax the requirements to
attain "Blue Ovary Certification
Status" but just remember this; I have
also predicted that they will start to ratchet up the
qualification requirements once they have successfully
disbanded your defenses. I think you’ll see that it
is going to become increasingly harder to qualify if
you are not one of the preselected favorites.
Unfortunately, there are already a number of naïve
dealers who have already prequalified who believe that
this is the way it is always going to be. I believe
that "Blue Obstacle" is the
biggest single attack on dealer rights we’ve ever
faced, no matter what franchises you have.
On
other issues, did you read the article where Saturn
came in, right behind Lexus, as a solid number two in
the prestigious J.D. Power survey results in customer
satisfaction with dealer service? Wow! That’s
incredible! People still really love those Saturns and
those Saturn dealerships and that allegedly goofy
sales process so much after all these years. Their
J.D. Power certified customer satisfaction rankings
should be a testimony to their great marketing
strategy. Who would ever dare to even question the
validity of J.D. Power results, even if they seem to
defy logic? Let me ask a question here (meekly
squeaking it out) "Excuse me, Mr. J.D. Power, if
Saturn customers love those Saturns so much, how come
nobody seems to be buying those little suckers?"
Am I alone in my thinking here or does this make sense
to anyone else? Now, I am not meaning to imply that
J.D. Power surveys and results could possibly be
bought-off or inept or tainted or bogus and corrupt in
any way. There is not meant to be any inference here
that J.D. Power or the company or their alleged
results are criminal. Heaven forbid! All I am saying
is that perhaps there is some kind of mistake here. I
am simply honestly questioning how come it seems to me
that every time I turn around that I seem to be
reading about Saturn shutting down this plant or that
plant because their dealerships are allegedly ghost
towns with inventory stacking up and apparently
rotting on the lots. Am I imagining it, or have Saturn
sales been in the toilet for the last couple of years?
Of
course, the last few years have been record-setting
sales years for almost every other car line in the
universe? Of course they are number two in customer
satisfaction.
I
also saw some industry news where Saturn is getting
another one and one-half billion dollar transfusion
from General Motors in yet another attempt to revive
the dead. How come those fabulous, fun-loving
Marketing Czars in Detroit don’t get it? They have
thrown billions of dollars down the toilet since 1985
trying to prop that pig up but it’s never going to
fly. I’m sorry (not really) but it appears to me
that Saturn has been branded with the stigma that
it’s a "Geek Car". Whenever
I see someone driving a Saturn I always look twice to
see if they’re wearing a propeller beanie. Their
marketing approach and sales processes have
justifiably earned Saturn most of that reputation with
the consumers.
You
talk about an insult! Zarella chastises the Oldsmobile
Dealers as if the fact that their sales are also in
the dumper was their fault. After nearly two decades
of neglect and bad product, how can General Motors
ever blame the Oldsmobile Dealers when it was General
Motors that threw all of that Research and Development
money into Saturn? Now they are going to be giving
Saturn premium new product first, at least a full
model year ahead of the other divisions, and they are
dumping another billion and a half into trying to pull
that pig out of the toilet. It is never going to
happen. I don’t care if you were to give Saturn an
SUV and a luxury car; people just aren’t going to
buy that brand name. Wake up! The public has rejected
the car, the concept and the whole Saturn experience.
No matter what all of that authoritative J.D. Power
alleged research says…we all can see the
truth…Saturn is dead. Let it go and move on!
Hey
did you see where Roy Roberts is on the road again? I
can’t believe that "Good Ole Roy"
who I affectionately refer to as "The
Father of Voms" had to fold his tent and
move on…again. It seems like Roy’s new company "M-Xchange"
sort of bit the big one after only seven months in
business. In the article that I read, Jesse Jackson
was sort of quoted as saying something to the effect
of that it was a bad sign for minorities when someone
with Roberts’ experience and background can’t
raise enough capital to make a venture work. Excuse
me, Reverend, if you’ll take a moment and check the
man’s resume’ you might discover a clue here.
Speaking
of stray cats with nine lives, Bob Thomas is alive and
well and in charge…again. Now I know what you’re
probably thinking…"Oh Gawd, not Bob
again!" Well sports fans, you might
remember that Bob was president of Nissan of North
America at a time when their market share was solidly
diving into the toilet. Then he pulled a brief stint
as one of the top executive kingpins at Republic
Industries at a time when their stock was experiencing
the first gyrations of an uncontrolled freefall
tailspin. After his distinguished career with Republic
Industries, Bob became the president and CEO of Dreamlot.com,
an Internet, dot-communist startup company that,
evidently, also bit the big one back in June under his
leadership.
Now,
(drum roll here) Bob’s back, returning to the
industry as CEO of North American Operations of Edmunds.com.
I am looking at his picture in one of the big
automotive weekly publications as I write this article
and it’s cracking me up. It’s the same picture
that they have used to announce his last three or four
new fabulous, rapid-succession career moves. Doesn’t
anyone check anybody’s resumes anymore?
I
just had a great inspiration! Wow! This is brilliant.
Why doesn’t Bob Thomas hire Roy Roberts to help him
run Edmunds.com? That would certainly shorten the
cycle for Edmunds.com. The outcome would take place
considerably sooner than if Bob just did whatever is
inevitably going to happen all by himself. There are
still persistent rumors that Ron Zarella may soon be
available. Man, if they could only get Ron onboard at
Edmunds.com. Wouldn’t that be something? (Advice to
big weekly automotive publication, save that picture
of Bob)
Trying
to build a case for those GM factory partnerships, I
can only say that the Rydell dealerships in The San
Fernando Valley should stand as an example at what can
be achieved if you only put your heart and unlimited
resources into it.
Remember
I am writing this article on July 29th,
2000. Let’s for the sake of argument imagine that
Wes Rydell’s California dealerships in partnership
with General Motors were only averaging somewhere
around…oh, let’s just make up a random number
here; Let’s pretend that Rydell was averaging
somewhere around $833.00 per unit retailed, front and
back combined, all incentives included, on the
statement.
Remember,
I just made that number up. We’re just using $833.00
per retailed unit as a fictitious example. Now, I know
what you’re thinking here. Nobody could possibly
have numbers in a General Motors Store in that
affluent California market that sucked that bad.
You’re right; of course no one could possibly do
that crappy of a job and stay in business without
being heavily subsidized. So, using this invalid,
fictitious, worst case example, I am sure that General
Motors would only proceed with more of these alleged
strategic partnerships only if they were profitable.
The factory would never knowingly be a partner in
anything that simply whored up a market and didn’t
increase market share penetration, would they? Of
course not! From the beginning, the Rydell project has
been an experiment to increase General Motors Market
share in Southern California. I am positive that Wes
Rydell’s increases in market penetration must be
spectacular for General Motors already. Why would they
put any dealerships in direct competition with their
loyal, fully invested dealers if the only thing they
were accomplishing was to steal another dealer’s
customers by advertising and selling cars at prices
that cut deep into the holdback? General Motors must
be doing some very strict accounting here. Of course
they must have already realized incredible surges of
market share growth in the Rydell experiment. That
would be the only reason to continue or to prop up
additional partners to compete with their loyal, fully
invested dealers in Boston, Baltimore, Houston, and
other cities.
Well,
the shadows on the wall tell me the sun is going down.
Pouring myself a cognac, my mind seeks relief from all
of this heavy thought. My mind returns to the peace
and tranquility of Mayberry, only this time it’s
Mayberry in the future after "Blue Navel
Certified".
This
is Mayberry in the year 2003.
Walking
down Main Street past Floyd’s barbershop, you
can’t help but notice all of the out-of-work Ford
technicians sitting on the bench out in front. They
quit the dealerships long before the Ford Dealers were
forced to pull out of the small towns. Most of the
qualified techs quit way back in 2000 when Ford
continued to screw with their allotted hours per
repair.
Now
that Goober’s Ford dealership has gone
out-of-business, his old garage is now a flea market.
All of the professional Ford Car Sales People went to
work at Honda of Mayberry after some alleged impartial
third-party inspector told the dealers to cut their
commissions so they could afford to try to get
certified.
Barney
Fife is no longer trying to catch Opie riding his bike
on the sidewalk. Nowadays Opie is driving a new Toyota
Avalon. Most of the folks in the rural markets
switched to driving imports after most of the small
town and rural dealers went under in what later became
widely known across the United States as "The
Ford Blue Oval Massacre" or, in some
towns it is still referred to as "Jac’s
Ambush".
As
we approach Andy’s house, the old Galaxy
is up on blocks in the front yard. It’s quite a
curiosity these days. A lot of people used to drive
Fords around here. Like most Fords in Mayberry these
days, the only thing the old Galaxy is good for is
when the pigeons use it for bombing practice. Can’t
get parts for a Ford unless you travel to the big city
anyway.
As
matter of fact, you seldom see any kind of Ford Cars
or Ford Trucks in these parts anymore. Nobody in their
right mind wants to drive all of the way into the city
and pay those big-city monopoly prices. Can you
believe that some of those overeducated Jackasses
actually thought we were going to buy our cars and
trucks on the Internet after they got rid of our local
hometown dealers?
There’s
hardly any Chevy’s and no GMC trucks to speak of in
Mayberry anymore neither, not after General Motors
followed Ford Motor Company’s lead and continued to
mess with their dealers. It seems like there was some
guy named Zarella back then.
Andy
Taylor drives a Dodge Durango now. He always admired
German engineering. His diesel Durango was custom
ordered direct from the factory in Stuttgart. Of
course, Ernest T. Bass is still driving that Fiat
Catera Deville he bought back in 2001. It spends most
of the time in the shop in Charlotte while Ernest
walks most places.
Recently,
Andy’s been getting a little concerned about his
Durango. After all J.D. Power and Associates just
re-released some recycled research that was left over
from somewhere around 1998 that the SUV phenomenon is
still finally over.
Sitting
at home in their living room watching cable
television, Aunt Bee and Helen are shaking their heads
as they watch a big-city television station which is
advertising the new Ford Excursion Eddie Bauer Urban
Assault Vehicle for only $85,000…or lease it for
only $1875.00 a month plus tax and dealer fees. "Seems
to me that cars used to be a little cheaper than
that," Helen commented. Aunt Bee simply
stared wide-eyed shaking her head… "Oh
My" she said!
More
Food For Thought
The
glut is coming. Industry experts, including me, all
tend to be in agreement on this issue. Don’t be
heavy in used car inventory going into September and
October. With an estimated 400,000 additional late
model units being dumped in the retail arena before
year’s end, you can expect used car values to
experience freefall. Remember, I said this in July.
Yawn…AutoNation
has changed its logo again. Who cares! AutoNation has
become the most major non-event in automotive history.
With its stock in the tank and their revolutionary new
Internet strategy, recently
re-re-revised…again…maybe...Until further notice
anyway.
All
AutoNation has conclusively proven to the auto
industry is that P.T. Barnum was right. There’s a
sucker born every minute. Unfortunately Wayne proved
that theory to be true way back at the beginning when
he got some dealers to sell their life’s heritage
for Republic Industries stock.
I
see where the Maroone name is now on thirty some odd
South Florida dealerships. Remember this, I said they
would disband this debacle and go "Poof" in
about two years. You will see AutoNation sell off all
of its dealerships and disappear. Remember I said
that.
Hold
the presses! CarMax says they’re profitable. I
can’t believe it but, according to Austin Ligon,
president of CarMax, they are finally in the black.
CarMax has lost incredible money from its inception in
1993 up to the 1999 fiscal year. Now, Ligon appears as
proud as punch that they made a profit at the end of
their fiscal year which ended February 29th,
2000 (not audited by me) of somewhere around 1.1
million dollars on revenues of somewhere around $2
billion dollars. As best as I can make it out, that
was $1.1 million dollars profit on somewhere around
129,000 retail sales. Boy, that dog’ll sure hunt!
Think, just try to image what competent dealer
operators would have made with that sales volume?
These alleged retailers sold $2 billion dollars worth
of cars and only made $1.1 million? Quit it! Wait a
minute here…could it be that Wes Rydell is
consulting these folks on the side? I am sure Circuit
City is proud of this stellar achievement. Ligon
boasts that it will take 20 to 25 years for CarMax to
roll out the national program. Wow! No wonder their
stock is hovering just above three dollars a share. CarMess,
I salute you!
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