Ziegler Supersystems, Inc. November 2003  Dealer Magazine Article

Twist and Shout

Everybody’s got their own music. You know what I mean, those songs that light you up whenever you hear them. Truthfully, I believe everyone’s life is little more than a screenplay set to the tempo of music playing in the back of their heads. In other words, life moves with the beat of your music and your music never stops.

No matter where I am or what I’m doing, my music’s always playing in the background of my subconscious mind. My music is the old stuff...The Beatles and the Moody Blues...Led Zeppelin and Cream...Otis Redding, The Four Tops, and, oh yes, the Temps and the Tams. I can slow it down or speed it up depending on what’s happening now. Sometimes when I’m performing a keynote speech, it’s the orchestral symphony quality performance from Sergeant Pepper’s Lonely Hearts Club Band...or, when I am on a rant its to the beat of In Gadda Da Vida by Iron Butterfly...and, when I am romantic (yes I do still have it) my generation was the generation of the thinkers and the poets, love songs, and romantic ballads...there’s more than enough music for love.

 What does all of this mean? Excuse me Ziegler, exactly how does all of this sappy crap relate to the car business?

 Well first of all...it obviously means I’m an old guy trying to hang on to my lost youth...BUT...more importantly; certainly more appropriately, for the purposes of this article is the fact that most of you guys (gals) aren’t having any fun anymore. The factories, collectively, have taken the joy out of this business...they’ve assassinated your music. We’ve been inundated with these allegedly heartless, overtly stupid, blatantly inept, bean-counting fools, infatuated with their own self importance, perceived-to-be-morons (the majority of them anyway) with fresh MBAs …ignorance in denial…they have destroyed the pulse-pounding, endorphin-driven high-energy environments of the entrepreneurs who brought them to the dance in the first place. Your sales forces have become personality-drained robot-zombies chasing mindless CSI objectives, trying to please out-of-touch, liberal, hidden-agenda, California research firms with suspect motives and inept newly-hired pubescent process auditors being inflicted on your people and injected into your dealership by several outside organizations...all of this is collectively keeping you jumping through meaningless hoops distracting your employees from our core business (which used to be selling cars) just to achieve meaningless validations to appease these ego-centric, pompous, puffed up, middle-management factory underachievers who need these silly-ass processes just to justify their non-essential jobs. This collection of clue-impaired, out-of-touch-with-the-consumer alleged morons are stealing the music from our souls.

 (Note: The preceding may be my personal all-time record for ranting, flow-of-consciousness, run-on sentences)

 Let me ask you Ford guys and gals a question? Can you picture Nick Scheele or Steve Lyons...or even Bill Ford catching an “UP” on your lot! (Note: Jim O’Connor actually can)

Before you qualify for Chrysler Five-Star, I want to see Deiter Zetsche personally spend a Saturday managing your sales desk. I want to see Colliver actually sell a Honda to a retail customer if he can stand up that long. (He probably has bad ankles?)

 You know, somehow I think Jim Press could actually do it. (Sell a car that is...not stand up unsupported)

 (The following paragraphs are personal opinions based on observations of extreme arrogance and undeserved self-importance)

 As for the Koreans...what in the Hell were you guys thinking? You (apparently obvious) fools have absolutely blown it. Reportedly, some Korean executives, drunk with power, have been running around with those smug, arrogant know-it-all attitudes, barking orders like rabid little ankle-biting dogs and belittling your American top-management as if they were some inferior crap on the bottom of your superior Asian shoes?  It wasn’t all that long ago that your product was the laughing stock of the industry. Now, when you are experiencing phenomenal success, you act as if you were the catalyst of this monumental change. I have praised you and your products in almost every article I have written...BUT now I believe you deserve everything that’s happening to you. Tell me why we shouldn’t turn our backs to you? I am so angry I want to spit on the ground.

 Dear Korean Manufacturers... (More opinion) No one should have to take the kind of abuse my sources have told me exists within and throughout, at every level, of your corporate culture. Your alleged shameful behavior and belligerent corporate egotism has apparently run off some of the most brilliant and talented management and marketing managers ever assembled in the history of the retail automobile industry. You are disgraced and humiliated...and you should be mortally embarrassed. Have you no honor?

 Would every affected dealer with any hair on any selected part of your body be so kind as to be sure that you email or send copies via FAX of the preceding two paragraphs to the proper Korean Management Individuals who might be so kind as to forward this message all of the way up the chain to those pompous fat cats in Seoul who I am directly speaking to here.

I challenge every one of these factories to require your executives at the highest levels to be required to work at the lowest levels in a retail car dealership for at least three months before you are allowed to make any decisions at all. We’ve had it up to here with condescending; removed-from-reality people in positions of authority who can’t even visualize or relate to who their customers actually are but still insist on tampering with the way we do business.

Approach the Bench Your Honor?

Ladies and Gentlemen of the jury...I rest my case.

Its Crunch Time…with their backs up against the wall, American Automobile Manufacturers need to realistically analyze every facet of their operations and eradicate waste.

 In April 2002, I wrote an article titled “Let’s Roll.”

At that time I wrote the following…I have watched General Motors blow billions trying to make Saturn profitable…still I predict that pig is never going to fly. They sacrificed a profitable Oldsmobile in favor of a dead Saturn that, truthfully, can’t financially justify its existence. Can’t help but wonder when they are going to pull the plug on this embarrassment. 

 Then…there was a recent Business Week Magazine headline I’ve been hanging on to that came out over the summer that reads… Saturn: Still Tiny, but Bleeding Like a Monster

The Business Week article opened with the words…With new models struggling, it could lose $1 billion this year. (Ziegler observation: “What’s new about that?)

In June 2001 I wrote an article titled Back to the Future. At that time I wrote an article about Saturn. This is what I said way back then…

All I have to say is it’s about time. I have repeatedly had to bite my tongue as I endured the slings and arrows and all of those stacks of wimpy, whiny, weepy letters and hateful emails from all of those hardcore, diehard Saturn fanatic crybabies. Every time I wrote something truthful about this train wreck, the whiners came out the woodwork trying to say it wasn’t so. Well guess what sports fans, it’s finally official…now…Even General Motors begrudgingly has to admit in their non-admitting sort of way that Saturn is perhaps (indeed) the “Biggest Sucking Sound” responsible for pulling General Motors down.

You see, according to the statistical analysis compliments of Automotive News and Bloomberg News Service, there are articles claiming Saturn is losing $3248.00 on every unit it sells with annual losses approaching $900 million…that’s nearly a billion dollars annual loss just to try to keep this pig afloat. They just pumped another $1.5 billion into Saturn after $4 billion plant development. Saturn is the documented Black Hole, subsidized at great expense from day one, dragging GM further down as monumental losses continue to spiral out of control.

 Of course they are still hanging on to feeble (opinion)…very feeble alleged research, and I use the word “research” lightly, by the prestigious J.D. Power and Associates that still ranks Saturn as number one in customer satisfaction. I don’t mean to in any way intentionally imply that J.D. Power alleged research is bogus, tainted, corrupt, predetermined, bought off or fixed… BUT…all I am saying is that it just doesn’t make sense to me that Saturn is number in light of their pukie wimpy numbers. Perhaps J.D. Power is in error somewhere here. Last year Saturn sold less than half of their target number at somewhere around a 14% loss of sales from the previous year.  

Then in June 2003 in an article titled Shock and Awe, This is what I said just a few months ago…

This is Ziegler speaking...I must tell you honestly...Saturn now has some of the best product in the entire General Motors line-up. For years those Saturn people have been wimping and whining that the reason they were falling on their butts was because they had no product…well guess what?  You’ve got great product now and if you continue to fall on your butt…or should I say stay on your butt and you can’t make it with what you’ve been given, then General Motors should put Saturn Division out of its misery once and for all …If Saturn can’t make it with this product line-up...then pull the plug...close the factory and turn out the lights. Saturn has been...and continues to be one of the biggest financial drains on General Motors since its inception. Now you’ve got the product…you Saturn Guys and Gals are out of excuses, put up or shut up. The industry still blames the factory propping up Saturn for the assassination of Oldsmobile.

The Business Week article also said in part…The new Ion is no hit, while sales for the updated L-Series midsize car were down 30% in April alone. Worse, the tiny Saturn unit continues to burn through money: Insiders tell Business Week the long-suffering division -- it has never made money in its 10-year existence -- could lose $1 billion in 2003. That's a lot of cash for a minor subsidiary of a giant that is expected to earn just $2.8 billion this year.

SO, with the stage now set what do you suppose General Motors is going to do about this perceived financial abortion? They’re going to pump even more fresh new product into this Black Hole of course. BUT, the new Saturn products will be crossover units shared by Chevrolet and other divisions.

Of course, Jill Lajdziak, vice-president of Saturn sales and marketing (third woman in a row to hold this position in a very short amount of time) is proud to point out that 70% of Saturn buyers are trading in foreign cars. Excuse me Jill, there was a popular song back in the seventies titled… “Nothin’ from Nothin’ Leaves Nothin”

Make no mistake about it…I love General Motors and I greatly admire their management and the direction the company is taking BUT its time to let it go and move on. Saturn is a market-tested, documented long-term failure and there’s no way you’re ever gonna’ breathe life into this corpse. The concept has failed on every mission it was created to achieve. There is no sane reason to continue to prop this pig up.

·        It was supposed to be the hot alternative to Japanese cars. Well I think, after ten years of failure, Toyota executives can best address that issue’s validity.

·        It was supposed to be this “Happy-Clappy” “No Haggle” “Low pressure” sales environment…with this “Customer-Friendly” “Warm and Fuzzy” experience that consumers would love…well, that concept doesn’t seem to have worked except you got a lot of glass trophies…and all of those glass trophies have proved worthless for creating new sales haven’t they?

·        Saturn Division wasn’t gonna’ need to offer any rebates or incentives…well we’re now offering $3000 back on $18,000 cars and giving away computers and subsidizing rates and leases.

·        It was supposed to be a unique brand not resembling anything else in the GM line-up…now Saturns will just be rebadged Chevys, diluting the other divisions sales even if they are successful. (Which history indicates is an extreme long-shot)

·        The 2005 Relay Saturn minivan will share components with three other GM minivans: the 2005 Chevrolet Uplander, Pontiac Montana SV6 and Buick Terraza.

·        Saturn was supposed to capture the youth market, targeting Generation X and Generation Y, BUT…according to Saturn’s own press the average age of their buyer is 43.

They gave Saturn the cars and their own SUV…they got the best new product in the GM lineup…and they got it first, before the other divisions. They gave them everything they wanted…everything they were whining about…and, as predicted (by me) they fell flat…again…still! With approximately 1450 laid off production workers sitting around on their thumbs while drawing a paycheck, Saturn is still hemorrhaging money out of every artery.

It seems to me that without Saturn, General Motors would have another billion a year to play with, which would be a great benefit in covering their legacy obligations. They could then concentrate more on bolstering their legitimate divisions. It would be cheaper to buy out all of their existing Saturn dealers for premium money and close the points and convert the factories to start building cars, trucks and SUVs that sell.

Last month in my article titled Thirty-Six to Nothing I wrote the following…As I was going to write in the original version of this article, look for O’Neill to completely shake up and shake out the management deep into the field levels. From accurate information coming to me over the last few weeks, I believe heads will roll and we will see Finbarr gathering up some old familiar faces he’s worked with in the past. Remember I am writing this on September 5^th, a lot of this may have already come to pass by the time you read this...just remember, I was all over it...way ahead of the curve...my sources are really good, accurate and planted deep.

Well, guess what? Page two of the snooze…dated September 29^th, 2003…an article by my friend, Kathy Jackson at Automotive News. The headline read…Hyundai loses another senior executive Michael Tocci is the first to join O'Neill at Mitsubishi

Now that makes six senior executives to jump ship at Hyundai since May. When I wrote my article back on September 5^th, I was honor bound not to write specifics about who was leaving or where they were going until it after happened. I had made a promise. Look for two more former Hyundai executives to show up to the dance in coming weeks, probably before this article is printed in November. Remember, I wrote this on October 5^th.

Its going to be bumps and grinds BUT I predict you’ll see Finbarr and company pulling this ox out of the ditch in a very short amount of time. Unless I am completely wrong, I am guessing you will see every one of Pierre Gagnon’s goofy Saturn-esque advertising and marketing strategies dismantled and scrapped.  O’Neill is talking about 100,000 mile warranties and new trucks added to the lineup.

The Koreans just didn’t get it. It was always Finbarr O’Neill and his marketing team that thrust Hyundai to the stellar levels and increases they’ve enjoyed. I am not going to go as far as to say that Hyundai is going to crash or anything like that…to the contrary, I think they have momentum…new plants…new products…and an incredibly great dealer network, some of the finest dealers in the country…BUT…a warning to our self-absorbed Korean buddies, if you screw up with your dealers…you’re toast. Stop micro managing what you don’t understand.

Ruh-Oh…

You know I am certainly swimming against the tide with my recent criticisms of Toyotas marketing strategies in the U.S. Market BUT we’ll let time be the ultimate judge.

On a positive note, one thing that’s certain is Toyota’s dominant position in applied hybrid technology with their new ecological gasoline-electric hybrid car, the redesigned 2004 Prius.  Already selling more than 600% of initial projections in Japan…expect this car’s sales to explode in the U.S. market when introduced in December. We’re talking about a car that gets 55 miles per gallon under U.S. driving conditions.

Sitting on more than 10,000 advance orders in the U.S. and 17,000 advance orders in Japan, debuting in European markets next year…U.S. dealers say customers may expect to wait months for their unit to arrive.

Now here’s something that really bugs me. Toyota is out there all by themselves…ahead of the curve with a unit in production with technology that works. In the meanwhile Ford, Daimler-Chrysler and General Motors have their projects delayed or on indefinite hold. Toyota has even contracted to Nissan to produce Hybrid engines for them. Honda is sort of in the game, but not really.

Here’s where it gets weird. Toyota has entered into an agreement to give this technology to China. According to Kyodo news service…Toyota Motor Corp. has signed a deal with Chinese Car Technology Institute to develop technologies for environment-friendly car engines such as hybrid engines that operate on gasoline and electric power.

According to Kyodo…Toyota is banking on the strategy that by lending its engine technology to China, Toyota will gain an advantage in the rapidly growing Chinese car market. Initially Toyota plans to ship its Prius hybrid-engine cars for road tests in China.

Bad Idea Dudes

Of course my Ziegler take on all of this is… “Have you guys lost your Freaking minds?”

Historically, China has double-crossed and ripped off everyone who has ever tried to do business with them. They are world-famous for counterfeiting every product manufactured and sold in the western world. From purses to CDs to Designer Jeans, the Chinese are the world’s foremost “Knock-Off” artists. What makes the Japanese executives at Toyota think they are immune to Chinese treachery? Ask those geniuses at Chrysler who gave Jeep technology to them a few years back and then found the Chinese were manufacturing and selling their own knock-off versions of the Jeep product.

I have a very good friend named Paul Denlinger who is one of the world’s leading authorities on Chinese business strategies. He speaks fluent English and most Chinese dialects. There is a strong possibility that I may be doing some consulting in China in partnership with Mr. Denlinger. We are already setting up contacts.

He and I have discussed Chinese opportunities and mistakes the manufacturers are making. Mr. Denlinger has substantial contacts in the Chinese government and business and banking community. I strongly suggest that any manufacturer looking to do business in that market hire his services as a consultant. His website address is http://www.china-ready.com.

Swirling a snifter of Louis XIII cognac, holding it high into the air signaling the end of another article. I will read and reread and refine this piece for another hour before I send it off to Mike Roscoe. I need to hear from you guys and gals. Please email me and visit the website. We’ll revisit Honda Excell next month…there’s a lot to talk about there. In my opinion, if you can get in the ground floor, Suzuki is about to be premier franchise…buy a Suzuki point if it’s available.

Sonny and Cher sang The Beat Goes On. Well…the music never stops as long as you breathe. I never laughed so hard as when I was holding a sales meeting and I made the entire sales team stand up and all whistle the tune to The Mayberry Theme Song. Believe me, nobody…but nobody…will ever be pissed off or in a bad mood if they are whistling the Mayberry theme. It’s stupid, it’s absurd the way it makes you feel happy. Picture twenty streetwise car guys (gals) standing up in a sales meeting all whistling the Mayberry song?

Sometimes I find a lot of inspiration and energy in the Theme Song From Rocky (The original)…BUT…the best…the absolute, undisputed very best…is when you play Twist and Shout by the Beatles. Nothing but nothing inspires me the way that song does. Remember the movie, Ferris Bueller’s Day Off when they played Twist and Shout during the parade and the whole city was dancing to it? I can clearly see that scene burned into my memory it is incredible. Whenever I am driving and that song comes on I turn up the volume till the windows vibrate. And, in closing…remember that song by The Kinks… Don’t Forget to Dance?

This Man Means Business!