As best I can recall, it was in the fall of 1955. It's sort of fuzzy trying to remember back to when you were eight years old. What I do remember vividly was sitting in the living room in front of that old black and white television, the one with the sort of round little green screen. Television was a family event then and Disney was on every Sunday night.
I was wearing a genuine coonskin cap, official Fess Parker moccasins, and I actually had two plastic flintlock pistols that fired one cap at a time. It was the final episode in the Davy Crockett series and tears were streaming down my face as the Mexican army stormed the Alamo. Davy's sidekick, Georgie Jessell, was already gone as well as Colonel Travis and Jim Bowieand there was Davy, out of ammo, swingin' his rifle "Ole Betsy" at the Mexicans as they closed in on him. Couldn't help himI was out of caps.
As that picture faded out on the screen the music came upI knew every word and this was the last verse of "The Ballad of Davy Crockett"
His land is biggest an' his land is best
From the grassy plains to the mountain crest
He's ahead of us all meetin' the test
Followin' his legend into the West
Davy, Davy Crockett, King of the Wild Frontier
The reason I chose that Davy Crockett flashback to open this article is because that Walt Disney goodness inspired a whole generation with principles, honor and a sense of right and wrong.
Today, the retail automobile industry is divided into three camps.
First of all there's the big-business, Wall Street consolidatorsthe public corporations like Republic Industries, United Auto Group, CarMax, Sonic Automotive, Group One, and Lithia Motors.
Of these six examples, I have subdivided them into two categories,one of which is competent automobile people. I have to put Sonic, Group One and Lithia in that category.
In the second of the three camps, the manufacturers are becoming increasingly more afraid of the consolidators.
The third group is a brave band of entrepreneurs holed up in the dealer version of the Alamo, surrounded by a well-financed, well-equipped army. These dealers refuse to sell out even though they are under incredible pressure. There is one major difference between these valiant dealers and the heroes who died in Texasthey're winning!
More than a year ago when Ford Motor Company fired the first shots and announced that they were going to buy all of the Ford dealerships in the Indianapolis market, the writing was on the wall.
In my opinion, the manufacturers have always held the dealers in contempt. After all, most of these "Car Dealers" were under-educated entrepreneurs who crawled up from the bottom and became millionaires. Dealers were living the good life while most of these factory guys and gals had low pay, good benefits and two cheap suits.
I've met very few factory guys and gals who didn't think they could run those dealerships better because they are smarter, better educated and superior to those seedy "Car Folk".
Well folks, The Ford Retail Network appears to be a disaster, exactly as I predicted in this column. They bought a "collection" of formerly-successful Ford dealerships in Tulsa, Oklahoma and promptly put them into the toilet. Market share is in the dumper and profits are making that big sucking sound.
The original deal was that Ford would not go ahead in any market unless every dealer in that market bought into the project. Then a couple of dealers held out and refused to sell in Rochester and another couple held out in Oklahoma City but Ford went ahead and formed the Ford Retail Network there anyway (or The Auto Collection or whatever the hell they're calling it this week).
Of course the biggest doublecross is that Ford will, most likely, turn the entire Ford Retail Network over to Republic Industries.
Undaunted by monumental failure after failure, Ford should be embarrassed. Informed rumor has it that they are lobbying hard in Virginia to overturn franchise laws. They've attempted to form a highly publicized consolidation play in San Diego and whether or not Bert Boeckman, the largest Ford dealer in the country, walked away in total disgust after dealing with this factory mentality is still a matter of debate in journalism circles.
Bert was supposed to head that deal up in San Diego but now, apparently, he's outand some of his comments indicate to me that he doesn't believe the project or the concept will work. Is that deal as dead as it looks?
Reports are coming to me that Ford is setting up Retail Networks in Fort Worth, Oklahoma City, Salt Lake City, Hartford, Syracuse, San Diego and The San Fernando Valley. I guess the correct name for the project is "The Ford Auto Collection"I am really not sure what to call it. Reportedly, holdouts are threatened and intimidated.
Then, on December 28th, there was an article in the Detroit News written by David Welch. The headline read"Ford's no-hassle car buying falters"a sub-headline read"Cluster of dealerships in Tulsa struggles with experiment to make car shopping easier."
The article was brutal. It was not the standard, cosmetically altered, regurgitated pap that dealers are spoon-fed by some of the national industry fish-wraps.
Welch also quoted some guy, who appeared to be supporting the concept John Hammond. Evidently he's a private consultant who used to be one of the principals of J. D. Power and Associates. (That credential gives him about zero credibility with me) Hammond was citing some efficiencies of scale rhetoric about the "bigger is better" sort of philosophy that all of the consolidators are chanting like an Eastern Indian mantra reminiscent of the Mahareshi Mahesh yogi.
Welch also quoted John Thornton, former president of the Oklahoma Dealers Association, who sold his successful dealership to Ford and agreed to head up the Tulsa Cluster. I am sure that, at the time, he wasn't thinking of the word "cluster" as an adjective.
Thornton had to admit to the reporter that they were having problems.
According to the article, the Tulsa project has lost more than 2% in truck sales although Ford is up 6% nationally and they've lost more than 12% in car sales although Ford only lost somewhere slightly less than 5% nationally.
It seems as if some of the dealers who didn't sell to Ford are taking pot shots at The Tulsa Collection. They are running television and newspaper campaigns that say they still believe in competition and if you don't trust the one-price, take it or leave it dealerships (referring to the Ford Collection), you can get a competitive price at their store.
If you read this magazine, you know that's exactly the tactic I suggested over a year ago. The way to beat the so-called one-pricers and so-called Super Stores is an advertising strategy using phrases like"We will negotiate""You don't have to pay the dealer's price""When you shop at those so-called no-haggle dealers, beware of what they try to pay for your trade-in""See us second and you'll always get the best deal""If you don't trust the dealer's price, try us and buy it for your price".
There is absolutely no doubt about it. I predicted over a year ago, in this publication, that the Tulsa Ford Project would be a disaster and that they would lose major market share. I predicted at the time that dealers on the geographic fringe would pick them apart by negotiating.I also predicted that Chevrolet would gain market share in that market as a result of negotiable pricing, and, even though it wasn't in the Detroit News article; several Oklahoma Chevy dealers have told me that they are eating Ford's lunch in that market.
Well friends, Ole Davy Crockett was right. His motto was right there on my bedroom wall in that little cinderblock house in Jacksonville where I grew up"Be Sure You're Right and Then Go Ahead". I'll tell you right now, what Ford is doing is not right...not morally right and it is just downright stupid from a business viewpoint. They are risking everything and it is going to be a disaster. Trotman's legacy and Nasser's vision will be tarnished, bitter memories.
My prediction for 1999 and the year 2000 is that we will start to rapidly see these trends reverse. Some of the public players are going to choke hard. You will see empires unravel and key players will exit down the backstairs in the middle of the night. You will see dealers buying back some of their former dealerships at fire sale pricing. What you won't see, though, is the factories apologizing and begging your forgiveness for tampering with your life.
My advice to those dealers who are holding out is to hang in there and keep swinging those muskets. Don't sell out your family's heritage.
As Mike Roscoe, publisher and editor of this magazine was quoted in the cover story of the business section of USA Today on December 29th: "Dealers will do whatever it takes to survive. Dealers are not going to just watch [big retailers] take market share away from them. They will fight tooth and nail." Don't forget, there are more of you than there are of them. Davy might have won if he had them outnumbered.
As for me, as I write these words it's after midnight, and today is now officially the last day of the year. Tonight is New Year's Eve. I am sitting at the word processor in the den with a snifter of Remy. It's been a good yearI love being so right. Funny, I just realized I have been humming"Born on a mountain top in Tennessee-e-e-e-e-e".
More Food For Thought
· Say It Ain't So JohnIt's just a rumorbutI have to tell you, it's a very strong rumor from some sources that I usually trust. Would it be wild if the Board at General Motors had recently approved a war chest ofsayoh about 900 million dollars so they could buy up some of their dealerships in a move similar to the Ford Collection?
· While we're in the rumor mill hereIs there any truth to recurrent rumors that the current owners are begging Lynn Hickey to please take his old Dodge dealership off of their hands? I heard a funny story that the offer was over one million dollars. Get thisnot to buy it but they would give a million dollars to Lynn Hickey if he would just take it back.
· By the time you read this, the Denver dealers will be in a bloody battle with Republic Industries' AutoNation-John Elway dealerships.
Republic opened with a television and media blitz, "Men in Plaid" portraying traditional automobile dealers are crooked scheming buffoons against the "Clean" John Elway image. This could get real nasty.
Jim Ziegler is President of Ziegler Supersystems, Inc. If you have specific questions or require more information about this subject, please check the appropriate box on the reader response form on page 3.