"One pill makes you larger... And one pill makes you small... And the ones that mother gives you Don't do anything at all Go ask Alice When she's ten feet tall."
You know, when I was twenty years old I actually believed those lyrics were incredible. I can remember sitting around in my garage-apartment playing that album over and over again trying to grasp the mysteries of the messages hidden in the lyrics and in between the lines.
"And if you go chasing rabbits... And you know you're gonna fall Tell em a hookah-smoking caterpillar Has given you the call... Call Alice...When she was just small."
As I sit here putting these thoughts to paper, I am shaking my head and laughing at the very thought that I once thought that song was deep and profound. It's just a stupid hippie drug song by Jefferson Airplane about chaos and confusion.
The reason I chose this flashback to open this article is because it closely parallels recent current events in the retail automobile industry.
I look at some of the incredibly asinine things that some of the factories and the public corporations are doing and I have to ask myself..."Are these people on something?"
On April 23rd, an article appeared in USA Today with the headline, "GM Managers Blamed In Strikes" by Micheline Maynard.
The article quoted General Motors Vice-Chairman, Harry Pearce, as saying that last year's devastating strikes at General Motors were General Motors Management's fault and should not have happened. (Duh!)
If you have kept up with this column, you know that I speculated, at the time, that there just may have been a possibility that someone at General Motors deliberately picked a fight with the union and provoked the strike to cover up the fact that their market share was already in the toilet. The strike became a convenient excuse for loss of market share. After all, we wouldn't want it to look like anybody was a moron or something, would we?
Is it just me... or is anyone else out there scratching your heads and wondering if Ron Zarella has the photographs? Zarella is the Marketing Czar of General Motors, right?
In reference to GM Chief Executive Jack Smith (and rumors about his resignation), Harry Pearce told the reporter that speculation that Smith is burned out and ready to step aside is "absolute baloney." My question of course is, "What prompted the reporter to ask that question in the first place?"
"When men on the chessboard Get up and tell you where to go... And you've just had some kind of mushroom And your mind is moving low... Go ask Alice...I think she'll know."
Mr. Nice Guy...No sooner do I write a nice, positive comment or two about Daimler-Chrysler than I start receiving letters from angry Mercedes dealers about the fact that Mercedes recently cut dealer's profit margins severely and they are encouraging the dealers to try "No Negotiation" selling.
Just when you thought things in this business couldn't get any more screwed up, there go those lovable, wacky Germans, seemingly double-crossing their loyal dealers. Rumor has it that BMW immediately raised the profit margins to their dealers so they can be more competitive in negotiations and put more in the trades, etc. I was told that some Chicago area Mercedes dealers are hiring attorneys to create an "Alternative Dealer Council"... allegedly because they don't trust the factory designees.
Speaking of Alice in Wonderland... I am sure you've read that Austin Ligon, president of CarMax, has announced that Los Angeles CarMax openings will be delayed well into the year 2000. Of course, as of this afternoon, CarMax stock is still just slightly over four dollars a share...recently dipping down into the high three's (in the toilet).
Personally, CarMax is one my favorite jokes. These people have stacked up monumental losses and it seems like they continue to lose same-store sales quarter after quarter and still they issue these tacky press releases describing themselves as the new way to buy a car. Unbelievable.
Excuse me Mr. Ligon, it appears to me that your model has crashed, that your concept doesn't work. Your stock is in the toilet. Your sales are in retro.
My question for Austin Ligon is, number one, "How do I get a job like that?" and number two, "Do you, by any chance, have any aspirations of becoming the Marketing Czar of General Motors?"
Along with more than 100 volunteer Chrysler dealers, my son Zachary and I are still anxiously waiting for the day when CarMax lots inevitably become big outdoor skateboard emporiums. Skateboarding across all of that empty asphalt at CarMax in Norcross...man, what a ride.
News flash! Cadillac division has announced that they plan to market a new generation of rear wheel drive luxury cars. The general manager of Cadillac division was quoted as saying that "Among the more discriminating consumers there is a conscious preference for rear wheel drive." Excuse me folks, didn't I write that in this column over a year ago? How many years in a row did Mercedes, BMW, and the Lincoln Town Car have to hammer them before the lights went off? This is an extremely smart move at General Motors. (Did I really just say that?)
Now maybe someone at Ford will finally do the smart thing and discontinue the front wheel drive Continental. Frankly, I don't see how you guys can give those pigs away.
"When logic and proportion Have fallen sloppy dead And the White Knight is talking backwards And the Red Queen's "Off with her head!" Remember what the Dormouse said... Feed your head."
"Eight Million Dollars"? The bloodbath continues in Tulsa.
The latest news is that the Tulsa Auto Collection is asking Ford and the five investing dealers to cough up eight million dollars.
Excuse me for asking, but didn't you guys start out with a fifty million dollar capitalization?
Weren't all of those dealerships profitable before Ford Motor Company started tampering with the retail process and putting in that goofy "No-Haggle" nonsense?
Ross Roberts recently told Texas Ford dealers that..."In the past we (Ford) have not demonstrated that we know how to run a retail operation."
Does this guy honestly want you to believe they've got it figured out this time? Unfortunately, I suspect that Don Thornton (who, as of the time I am writing this article, is in charge of the Tulsa Auto Collection ) is going to be the scapegoat for this debacle. I know Don Thornton. I consider him to be a good dealer and a personal friend. He's been a good dealer and a profitable operator for years. I would certainly hate to think that they would hang his good name out to dry because he couldn't make their goofy concept fly.
One thing Ross Roberts did say to the Texas Ford dealers when he was appealing to them to support legislative change in favor of Factory Ownership in Texas was-get this!-"We are not saying they need to be One-Price. We are saying they need to be No-Hassle. We did go out for One-Price in the beginning. That is not the case today. Dealers in the market make the decision."
This is the first time that I am aware that Ford or the Auto Collections have backed off of One-Price.
It's now one o'clock in the morning as I sit here in a hotel room in Chicago pounding on this laptop; I just realized that maybe...just maybe...that song does have mystical secret meanings imbedded in the lyrics.
Swirling a snifter of cognac in front of the lamp in front of me creates amber psychedelic patterns on the wall. Where are my beads? I am having a flashback here. Maybe Grace Slick was a visionary back in the sixties. Could she have been looking into the future when she wrote that song?
When I get home I am going to dust off that old album and play that song a couple times. Just sitting here humming the tune it conjures up mind-altering images of Austin Ligon...and Ross Roberts...and...Ron Zarella.
Until next time..."Peace."
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More Food For Thought
· All the news that's fit to bury. The state of California is investigating the relationship between Wes Rydell and General Motors in that state to be sure they are not violating state laws. What they are looking for is whether Rydell is a legitimate dealer or whether he is actually a front for factory ownership in violation of California law. As I understand it, the questions are whether or not he is at risk...or whether or not General Motors has guaranteed to return his initial investment if the deal fails. By the way...I think I can guess the correct answer to that question.
This story is big news and deserves to be covered in the news. One of the largest publications in the industry featured this hot story in the very back of their issue...three pages before the back cover...after the classifieds. This article was buried so deep, it is a wonder anyone saw it. I have always contended that there are certain so-called news publications in our industry that bury any derogatory articles about the factories so deep into their issues that they will never be seen.
· John Elway AutoNation...Well the numbers are in, and AutoNation has had spectacular success in the Denver market-according to them, anyway. They certainly have sold a lot of cars, I'll give them that all right...BUT...I have to ask...how much money did the corporation have to pump into that deal from external sources to sell how many cars? By the way, I know the answer to that question and I am not impressed.
Anybody with as much spare cash as they have laying around can sell cars at a loss and play "Hide the Weenie" with the accounting. I am not saying they are, I am just saying they can.
At just slightly over fourteen dollars a share, it appears Wall Street isn't fooled either.
They need to prove that they can operate "heads up" against traditional competition without cheating or deliberately losing money...without trick financing or bogus residuals on leases that hide losses until a future date. Then I will admit the goofy concept works (which it doesn't). I am so sick of hearing their numbers expressed as "revenues." I want to see legitimate profitability increases.
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. jziegler@dealeronline.com