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The
Quarter in Twelve Flat
Over
two hundred spectators lined both sides of the road
that cold December night in 1968. Some people were
sitting on their car hoods leaning back against their
windshields while others stood around in small groups,
shoulders shrugged with their hands in their coat
pockets. You could see their breath rising above their
heads in clouds of steam. There may have been some
Budweiser present.
I
was in the "Outlaw Lane" lining up against a
55’ Chevy with a "Rat 302" engine. This
was my second run that night. I had just blown by a
1968’ SS Chevelle by more than two car-lengths in my
previous run. A flashlight started the race and my
tires smoked as the backend tried to come around,
fishtailing wildly as I came spinning off the
line...the posi-traction kicked in, the car
straightened out and I was off the line...ahead by
half a length.
Subtly
reengineered by Stanley Mizell, the Jacksonville-based
MoPar genius, my 1968 Dodge "Super Bee" was
fast…real fast. The police were impressed. As soon
as our tires turned on that second race, more than a
dozen patrol cars with flashing lights and sirens came
streaming out of hiding. The police were staking out
the drag races, after me in particular, hiding in the
City Dump with their lights out. That Dump Access Road
was perfect for drag racing because it was a straight
two-lane, almost a mile long, with no intersecting
roads or cross traffic and it was isolated at 2:00
A.M.
Twenty-one
years old, young and foolish, I thought that
maybe...just maybe I had a
chance to outrun them. Fourteen miles later, I was
retired from drag racing forever. Going to the strip
on Saturday nights, I used to love watching Stanley
Mizell run his world record breaking 426 Hemi "Cuda".
Now
I see where Daimler-Chrysler is re-introducing the
"Hemi". The production version of the
Chrysler 5.7 liter "Hemi-engine" concept car
from all accounts is going to be a real
"Smoker". That’s the magic and the
imagination that has been missing in the car business.
Chrysler has the most imaginative engineering team in
the car business today. I believe that one of the main
reasons that Chrysler is capturing major market share
gains is because they are so far ahead and
"out-of-the-box" with sheet metal design and
performance innovation.
I
have seen the new Thunderbird and I must admit that
Ford has a real winner provided they can put a
performance engine in it. The car is going to be
sensational. Finally, Ford is making some styling
progress, even if they did have to borrow heavily from
the past. My opinion, the new Taurus and the new Sable
are not nearly as "Butt-Ugly" as their
predecessors BUT they are still more of the same, a
giant yawn. The Taurus is once again redesigned to be
nothing more than a program car.
On
the other hand, General Motors will probably
discontinue the Camaro, totaling abandoning that
market segment...a stroke of incredible ineptitude in
face of spectacular Mustang sales which proves that is
a viable demographic.
In
all fairness, General Motors is coming out with some
spectacular product. In truth, I am considering buying
one of the New Generation Cadillac Escalades myself.
Remember, I have had seven new Town Cars, an Eddie
Bauer Explorer and I am currently driving an Eddie
Bauer Expedition...But now, for the first time, I am
strongly considering buying a new GM product.
Saturn
continues to excel at failure. Despite glowing J.D.
Power research about customer loyalty and customer
satisfaction, Saturn is recalling another quarter
million cars for yet another round of safety and
quality related reasons.
Saturn
LS and Chevrolet Malibu just took major crash test
hits earning only a two-star rating (out of five) in
side impact collision tests. Excuse me a second here,
are you dealers having as many problems with rebadged
Opel products as I am hearing? I would appreciate some
letters on Catera, Malibu, Saturn LS, and Cutlass
quality. I drove a three year old Catera recently,
supposedly a certified, reconditioned car...What a
piece of.... Well never mind, I will just say it shook
and rattled and sputtered. Maybe it was just that
specific car but I am told that is not uncommon with
GMs Opel clones.
It
is just one week after the NADA Convention in Orlando
and I can’t believe that I am sitting here writing
this on Super Bowl Sunday. We are all iced-in here in
Atlanta. It is two hours to kickoff and I have just
broken the seal on a bottle of Remy-Martin vintage
cognac.
There’s
a lot happening and I am going to try to give you my
takes on everything that I am hearing and seeing.
Remember, as always, this is all just my opinions and
perceptions of events, people and places in the
industry.
First
of all, did you hear that Roy Roberts is retiring from
General Motors? Roy can choose to tell people that
he’s retiring if that makes him feel good, but I
have to say that "Cut and Run" is a better
description of what we are seeing here. Do you
seriously believe that he isn’t stepping down one
step ahead of the proverbial axe?
Let
me look into my crystal ball here for a
moment…something’s coming to me…yes, it’s
becoming clearer now…I don’t know exactly what it
means but the voice is saying, "Zarella’s
Next!"
The
NADA is strutting and taking bows over the
announcement from General Motors chairman, Jack Smith,
that General Motors will no longer pursue owning and
operating dealerships, and, that GM would no longer
pursue lobbying state legislatures to overturn state
franchise laws forbidding factory ownership of
dealerships.
In
similar statements, Jac Nasser and Jim O’Connor at
Ford Motor Company finally said the words that Ford
would NOT sell cars directly to the consumers
over the Internet. Of course, I would feel better
about the Ford showing "Good Faith" if they
dropped their lawsuit against the Texas Department of
Transportation.
Ford
is now contending that they intend to use the Auto
Collections as an experiment...a learning laboratory
so-to-speak, according to Ford VP, Brian Kelley (who
in no way resembles Opie Taylor of Mayberry).
"Experiment?" Wasn’t that the same garbage
they were spouting in the beginning of this fiasco
before they blitzkrieged across the country buying up
dealerships and taking legal action to defeat
states’ franchise laws? Didn’t they just buyout
Dick
Strauss in Virginia? These people haven’t let up for
a moment.
Give
me a break here. Ford has proved beyond a shadow of a
doubt that these Auto Collections are failures and
that their retail strategies and 2000 initiatives
don’t work...totally rejected by the public. In
Oklahoma City, the entire concept has fallen apart.
They are advertising traditionally and separately,
negotiating, sometimes not even referring to the Auto
Collection and they are doing business the way they
used to before Ford’s interference.
Jim
Shroer, director of Global Marketing at Ford (who in
no way resembles John Boy Walton) said that Ford is
having a hard time convincing dealers that Ford seeks
partnership, not diversity. No Crap! Imagine that.
Could it possibly be because Ford is sending out mixed
messages that indicate that their dealers are about to
get screwed here? In Psychology, rule number one
states that past behavior is one’s best indication
of future performance. If Ford would stop genuinely
stop dicking around with their dealers, maybe they
could rebuild some of that lost trust.
I
appreciate that the NADA was instrumental in the
apparent progress we are seeing here…BUT…I
sincerely hope that no lets their guard down. This is
no time to get weak. Personally, I don’t trust
General Motors or Ford.
Even
though Ron Zarella and Roy Roberts personally accepted
responsibility for the morale problems and the rift
with the dealers, I don’t believe for a moment that
Ron Zarella is sincerely penitent or that Roy Roberts
has become "Warm and Fuzzy" overnight. Read
my article in the September issue of this magazine
"The Frog and The Scorpion" and remember
this, the scorpion had to sting the frog, it was just
his nature.
The
"Dot-Communists" were all over the
convention floor proclaiming the next big "Wave
of the Future". Excuse me folks, slap some cold
water on your face, take a deep breath, now exhale and
take a look around for just a moment here. I am on
record as saying that so far the Internet has been a
major non-event as far as car sales go. Let me quote
myself… "The Internet to date has not generated
the sale of even one additional unit."
Sure,
you need to be on the Internet. No doubt in my mind
that Internet Sales are going to increase and you need
to have a professional Business Development Center to
handle all incoming and outbound phone sales as well
as internet sales BUT, Do you really need all of these
vendors turning your retail buyers into low-profit
fleet buyers and charging you for the privilege. I’d
like to see AutoByTel make a profit themselves before
they continue to interfere with ours. Just how
successful was AutoByTel.com founder, Pete Ellis, in
the retail business before he started that company
anyway?
I
just read where AutoByTel.com is getting ready to
start selling cars directly to consumers without using
a dealer in the transaction. Let’s be sure I got
this right now…According to the New York Times,
AutoByTel plans to act as a car broker, selling cars
directly to consumers in what they are calling "A
Dealerless Transaction".
Whoa
there, just a moment here! This sounds like a major
"Double-Cross". The AutoByTel.com propaganda
machine is claiming somewhere around 45,000 to 50,000
Internet sales for subscriber dealers monthly right?
Now, are they saying they are going to use that
information, paid for by these dealer subscribers to
solicit customers out of that database and compete
with their own subscribers?
First
of all, I have a serious believability problem with
the 45,000 to 50,000 sales a month figure...most
AutoByTel statistics are probably the figment of some
alleged J.D. Power research. (We all know what I think
about J.D. Power alleged research.)
AutoByTel...Remember,
we’re talking about a company whose stock has
experienced freefall down from $58 a share to 12
3/8ths a share in less than a year as I write these
words. Unless I am reading it wrong, AutoByTel.com
posted a $4.9 million-dollar loss in the fourth
quarter on only $12.4 million-dollars of revenue. Let
me look that up that model in my business textbook
here ...hmmm-mmmm...It referred me to "See...Smoke
and Mirrors".
Prediction...Even
with General Electric buying in, don’t waste a lot
of valuable brain cells storing the name AutoByTel.com
in your long-term memory. As the Fairy Godmother said
to Cinderella "Poof!"
Speaking
of "Poof"...Howabout them AutoNation Used
Car Supercenters? Remember, I predicted three years
ago that they would disintegrate within three years.
In the July/August 1996 issue I wrote... "H.
Wayne Huizenga had better stick to renting videos
because he’s about to get his ass kicked in this
business." At the time I recognized the
obvious absurdity of that goofy business plan and I
said so repeatedly. Now, I have got to tell
you...It’s not over yet. I am sincerely looking for
AutoNation to completely disintegrate and dismantle
and the stores will be sold off within the next few
years...I am going to predict two more agonizing and
frustrating years for Huizenga and company. Their
stock is in the toilet as low as $7.50 a share this
month. Their business model is flying by the seat of
their pants and AutoNation press releases feature more
fantasy than was ever thought up by the Brothers
Grimm.
As
for their strategy of building a National Brand...The
brand name AutoNation is now AutoWay in Tampa and who
knows what else...where else?
CarMax...at
a buck and a half a share...CarMax president, Austin
Ligon, is saying that CarMax has the winning plan and
that they are working toward profitability...
"Working toward profitability?" Did this guy
grow up in "Doodyville USA" or what? After
seven years, it might be reasonable to assume that a
company should be profitable...right? After seven
years they are just trying to break into the black for
the first time. To quote Groucho Marx..."If we
don’t sell too many of these, we might break
even." It might be fifty years or more before
CarMax can even make a reasonable profit at this rate.
Well,
it’s almost time for game and my son, Zachary, is
getting excited. I really need to get in there with my
family. I think I’ve said enough for one issue.
Pouring myself a snifter of cognac, I wonder if the
Auto Trader has any old Dodge Super Bees for sale.
More
Food For Thought
Is
it just me and my cynical skepticism, or did a blurb
in The wall Street Journal last week carry the ominous
tones that I read into it? The headline read "Car
Makers May Try To Alter Prices".
The
leadoff sentence stated that...Major auto makers are
weighing whether to ditch longtime pricing practices
to follow the herd of online car-retailing services by
posting invoice prices or "street prices".
Although not the only manufacturer alleged to be
considering this, Ford Motor Company was specifically
mentioned in the blurb I saw.
Street
Prices are what consumers are actually paying for a
car in the market...not MSRP. I smell the factories
interfering with the retail process again. If they
start further reducing margins and price setting, the
dealers will once again get screwed.
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