Fletcher Jones Jr. ~ Fletcher Jones Automotive Group
Interview by Michael Roscoe
Every year at NADA Convention time, we do a Cover Story on one of the top dealers in the market of the city where NADA is held. We typically look for a dealer with a well-known name. Although he currently does business out of his Mercedes store in Newport Beach, CA, Fletcher Jones Jr. spent many of his formative years as a dealer in Las Vegas. He has several successful stores there today and is still a Nevada resident.
Fletcher, tell me how you got into the car business.
My father started in the car business in 1946. He started in the used car business and later got a Chrysler Plymouth dealership in the late 40s. In the early 50s, he got a Chevrolet dealership in downtown Los Angeles. We acquired a Chevrolet dealership in Phoenix and then, in 1966, we moved the Chevrolet dealership from downtown L.A. out to Westminster, California. At the same time, we got the Chevrolet dealership here in Las Vegas.
We got Mercedes Benz in 1972. We got Toyota in1984, and then we got some other dealerships in Las Vegas. We had Hyundai, Suzuki, and Mitsubishi all in the mid 80s. I have since sold those or given them back. We also had Isuzu during that time. We got Lexus when Lexus came out through our Toyota relationship in Las Vegas. The Ford dealership that is in Reno was acquired in 1976. I previously had a Ford dealership that my sister and brother-in-law now have in Buena Park, California.
I started working for my Dad in the early 60s, summers and holidays, and worked in the back-end like a lot of dealers' sons and daughters do. Then I went to work full time after college. I became a Mazda dealer in 1971. I got a Ford dealership in 1974, then another Ford dealership in Reno in 1976. Then I moved to Las Vegas full time in 1982. I lived here for ten years full time, and I am still a Nevada resident. I got involved in acquiring the Mercedes Benz dealership in Newport Beach in 1991, and we finished that deal at the end of 1991. The dealership was going through bankruptcy, and it was a tough time for Mercedes, but I felt very strongly about the deal. Since that time it has become the largest Mercedes Benz dealership in the country. We are number one in overall sales and also in new car volume. That brings us up to today.
Let's talk a little bit about your father. You told me it was back in the 50s that he had dealerships in different states. That was quite rare back then, wasn't it?
I don't think it was common at all at that time. He was one of the first to have multiple stores in multiple states.
You mentioned Buena Park. If I'm not mistaken, Las Vegas Ford dealers Don and Gary Ackerman have some connection to Buena Park.
Yes, they do. We bought that dealership from Don Ackerman's father-in-law, Gary Ackerman's grandfather.
George Gaudin?
Right.
Interesting. Fletcher, what was it that you think led your father to say, "I'm going to expand into other brands and other states"?
My father loved his business very much. He was obviously very aggressive. I just think he felt that if he was going to expand, that was where the opportunity was for him to do so.
He couldn't get another same-make store in his market.
That's right. And we had general managers who were partners in those deals at the time, which was required. He has had several people around California who started out as managers or general managers for him and went on to have their own dealerships.
Give me a little more detail about your getting into the business. Of course you worked during the summers and such, but at some point, it became a job, a career.
There was really never any question about what I wanted to do. I loved cars. That's really pretty much all I ever thought about, growing up in the 60s. I really liked being around the dealership. I enjoyed the people; I enjoyed the environment. I just kind of soaked up everything that was there. When it came time to decide, it wasn't a matter of "if." When I was finished with school, I got into sales and went on from there.
So you got into sales, sales management, the usual progression?
Yes, and then in 1971 an opportunity came. Mazda was just coming into the market, and nobody really knew anything about it. Rotary engines and imports were just starting to do well, but they weren't anywhere near acceptance or what they are today. That's how I got started as a dealer and then a couple of years later, we had the opportunity to buy the Ford dealership from George Gaudin.
The Mazda dealership was your first dealership?
Yes, my father offered me a lot of really good opportunities like that. At that time, it was necessary to do it that way. I remember that it was an issue when I became a Ford dealer because Ford didn't want a Chevrolet dealer. There wasn't a lot of cross-brand dealership ownership at that time. Then my father and I ended up getting involved together. I would be involved in his dealerships or he in mine, and we worked together until his death.
It must have been a source of a lot of pride for him. Not only did you come into the business and you were working with him, but you were doing it on your own.
I think it was. I think he did get a lot of enjoyment out of that. I have a son and a son-in-law in the business. I am looking forward to their involvement under the same scenario.
Fletcher, in your opinion, what are the keys to being a successful dealer today?
I don't think that they are very much different than they were when my father started in the business. Paying attention to details, having very clear business objectives and customer-handling standards, and vision; just making sure that you are always inspecting what you expect. It was important that you took care of your customers in the 40s and 50s, and it's even more important today. The expected level of service has risen, and their options in purchasing have grown. We are always trying to find ways to exceed our customers' expectations.
What is the key to managing different makes and different locations efficiently?
Of course, having a strong general manager at each of the dealerships, who has a very clear set of standards and procedures to follow, and also a pay plan that compensates them in a way that they are a partner even if, in fact, on paper they may not own stock. But compensation-wise, they are really in business for themselves without really having to have their own investment. If the store does as well as it should, they are compensated appropriately.
Are your general managers groomed from within your organization? Did you find them outside, or is it a combination of both?
For the most part, they have all come from within our organization. Our Toyota general manager here in Las Vegas started with us in 1968, came up through the sales floor, and has been with us over 30 years. The same with most of our general managers. The Mercedes Benz manager in Las Vegas has been with us since the late 70s. The Lexus general manager has been with us almost 20 years. Our partner at the Ford dealership in Reno is the son of my father's partner. That relationship goes back to 1957. Our general manager at the Mercedes Benz store in Newport Beach came on board with us when we bought the dealership in 1991.
You had mentioned that you had some stores in the Las Vegas market that you sold. What kind of acquisition mode are you in now? Are you looking for any more stores? Are you looking at just maximizing the stores that you have?
What I'm looking to do right now is to make sure that we maximize the potential of all the really good franchises, which are the franchises we have right now. We do not want to get our attention diverted on things that can't offer us the same return as a Chevrolet, Toyota, Mercedes, Lexus or Ford. If the right situation arose, in the right geographic area, we would look at another dealership, but we are not actively looking. We are not buying just to buy. We have long since abandoned the theory that more is better. It needs to be the exact right fit for us. We are blessed with such strong franchises right now that if we take our attention away to try to make something that is perhaps marginal or maybe not quite as strong, we might find that we spend as much time on those dealerships with far less return than if we took the same amount of time and devoted it to one of our current franchises.
With some of the stores you have and some of the locations you have, you must have been approached from the consolidators.
Many times.
What are your thoughts on that?
It doesn't make any sense for us right now. Like I said, I still enjoy the business. I enjoy what I am doing. I have my son and a son-in-law who are already in the business and another much younger son and daughter who may decide to get into the business. So for me, in the short term, it doesn't make a lot of sense because I still enjoy what I am doing. As much as I might get for the dealership, then what would I do?
Whenever I hear talk like that it reminds me of Dave Conant, Norm Reeves Honda. When there was the real flurry of activity with the consolidators, when Autonation was snapping them up left and right, he said, "You know, Mike, I need two, three hundred thousand dollars a year to live on. I'm not doing this for the money. What am I going to do all day? I love the business."
That is so true. In the long term, I feel I owe it to my children. I am doing it because I love it and because I need something to do now, but also I am doing it for something to pass on to my family.
What are you doing on the Internet?
Mike, we are quite active on the Internet. In all of our stores, we have a dedicated Internet department and in the case of Newport Beach, we have ten people in our Internet department.
In the Mercedes store?
In the Mercedes store. I would love for you to see that or talk to our Internet managers. I really feel that at that dealership we are state of the art as far as Internet sales. All the dealerships have at least one person who is dedicated strictly to handling Internet leads. In Newport Beach, it's up to about 10% of our business.
Strong. Are some of these sales to people whom you wouldn't have done business with without the Internet?
Yes. Definitely, most of them. I can't say 100% of the people we wouldn't have done with, but I would say that the majority of the people were incremental, plus business through that department.
Is your focus primarily generating more traffic to your web site or following up on leads from third party lead services?
We work both, driving traffic to our web site, which we have been successful at and through our factory sites also. I know that at our Toyota dealership here in Las Vegas, we get as many from our Toyota web site as we do from Autobytel or some of the outside sources for which we are paying a referral fee. I think it is pretty evenly split. Our big focus in the Internet department is to really work our leased portfolio, which doesn't get done by the salespeople on the floor as much as we think it should, even in the high lines. That is a big source of business through the Internet department. It also helps supplement that department's income, which allows us to have the right kind of staffing dedicated to the Internet department.
The NADA convention is being held here in Las Vegas. Tell me how the Las Vegas market differs from other markets.
I think there are some misconceptions about the Las Vegas market. Immediately, the first thing other dealers or factory people ask me is, "Do you have a lot of cash deals? Do you have people hitting a slot machine jackpot and coming in and buying a car?"
They are mostly losers.
Exactly. Las Vegas is not that much different than other markets. In any market, there is a core business and that is the main employer in town. Then you have the various support people around those businesses, and they are all your customers. That's how Las Vegas is too, except our core business is gaming.
One thing I had noticed when I interviewed Don and Gary Ackerman is that just a few years ago there were only two Ford stores here.
That has changed; it is a very fast growing market. At one time there were five, six thousand people coming into town a month, and a couple thousand were leaving.
Yes, but the ones that were coming in had money; the ones that were leaving were broke.
(Laughter) Exactly. But you bring up a good point, Mike, because when we started here, we were the second Chevrolet dealership. The Ackermans had the first Ford dealership. The second Ford dealership came in about the same time in 1966 when we came in with the second Chevrolet dealership and then everything else was a single point. Up until the mid 80s or late 80s there were two Ford dealerships and two Chevrolet dealerships. At that time there were two Nissan and two Toyota stores, but other than that, everything else was a single point. At that time the population was well over 500,000, probably pushing 600,000.
That's amazing. Two Ford stores and two Chevy stores for that big of a market.
At that time the market was quite a bit different than other places. It was like being in a single point town with an incredibly large population.
That was a good thing.
It was a very good thing and the business has changed because of that. Now there are four Chevrolet dealerships, and there are four Ford dealerships.
But of the four Ford dealerships, they are still owned by just two families, right?
Yes.
I guess it is a good thing for the Ford and Chevy guys that for an inordinately long time they had the whole market to themselves.
For a lot of years it was a very attractive deal. It still is a great market and a great place to be in business; it's just not quite as easy as it once was.
But it was great while it lasted.
Yes.
Fletcher, what are some of the things that you think dealers must see while they are visiting Las Vegas? They come in for NADA, they've got the seminars and the workshops, the exhibition hall, the meetings, the parties and the drinking in the bar with the friends. But if they have some time, what do you think they should do or see?
Well, one thing that has really expanded along with the number of car dealerships since the 80s and early 90s are the number of golf courses here. There are a lot of great golf courses here now.
What are the top ones at which visiting dealers could play?
Well the really renowned course now, the top of the top, is Shadow Creek. That was the course Steve Wynn built as his own private course. Since MGM has taken over all of the Mirage Resorts property, they are now managing it, of course. It is possible to get on that course now. There are some other really good courses too. Royal Links is one. It is a fairly new course, and each hole is modeled after a hole from the British Open championship, so it is really an interesting layout.
What about restaurants?
There are a lot of great restaurants that are off the strip. One of them that is not in a hotel, but it is really outstanding and gets a lot of notoriety around the world and in various restaurant newspapers and magazines, is Piero's.
What kind of food?
It is seafood and continental. Italian seafood/continental. It's on Convention Center Drive. I recommend reservations.
What are some other restaurants that you would recommend? How about Prime at Bellagio?
I have heard that Prime is very, very good. All of the restaurants at Bellagio are very good. Charlie Palmer's Steak House in the Four Seasons is very good. Four Seasons is something you ought to go see if you are not staying there. It is really interesting. It is part of Mandalay Bay, but is a real Four Seasons. You kind of walk around the corner and you are walking into a Four Seasons that is totally separated from the casino and everything else.
Do you still need to book months in advance for Picasso at Bellagio?
I don't think so. I think you can probably get in sooner than that but make reservations now.
What about shows you would recommend, Fletcher?
As far as shows, Ziegfried and Roy at the Mirage, the "O" Show at Bellagio is big. Danny Ganns, also at the Mirage, is a really good show.
