Robert J. Maguire, 2001 NADA Chairman-Elect
Interview by Michael Roscoe
Bob, how did you get into the retail automobile business?
I was born into this business. My father worked for General Motors Corporation back in the 20s and 30s. He was the city manager in New York for Chevrolet Motor Division. In 1938, he was invited to make an investment in a dealership in Jamaica, Queens. He became the dealer. I joined the business in 1962 when I completed my Marine Corps active duty assignment. I worked for my father for fourteen years. I eventually left the family business because, in reality, I was waiting for him to die in order to take over his business, and I didn't want that to happen. I also wanted to live somewhere else, so in 1976, I bought a dealership in Bordentown, New Jersey.
In the fourteen years you worked for your dad, what did you do in his dealership?
I considered myself a member of the S.O.B. club, son of the boss. I will tell you this, he was a tough S.O.B. to work for. He demanded more from me than any of his employees, because I was his son. He wouldn't give me one inch for fear that someone would say, "Ah, you did that because he is your son." I had to work 110%, not just 100%.
I worked for my father in a variety of roles. I started as a retail salesperson and then I found a niche for myself. He did not have a used car retail department, he wholesaled all of his used cars. I saw an opportunity to bring a new profit center to the dealership. I wasn't taking anybody's job, I was creating a new department. For a number of years, I functioned as the used car manager of the dealership, appraising and buying used cars for retail.
The funny part of the story is that I just went to my dad and said, "I'm willing to put all of my creditability on the line. Take the net profit that you make in the used car business today as a base line and pay me 50% of everything over that.
What did he have to lose?
He had nothing to lose. The first year he had to pay me $100,000.
What year was this?
This is in 1964. Then he came to me and said, "You know, we have got to change your pay plan." I got angry with him and I will always remember what I said to him. I said, "You are like all of the automobile dealers that I know. Every time you think a manager makes too much money, you change the pay plan."
Wait a minute, if you made $100,000, that means he made $100,000.
That's right.
And he wouldn't have made it without you.
Right, but he thought that used car managers, back then, shouldn't be paid $100,000. Maybe $50,000, but not $100,000. Anyway, in that capacity, running a used car department, I ended up regularly interfacing with the body shop and with the service department. I didn't run those departments, but I worked very closely with the management of fixed operations because they lent themselves to repairing and servicing my used vehicles. Of course, I had to take care of customers who had problems with their newly purchased vehicles. So although I was never a general manager, my father never had a general manager, I played a lot of roles.
So how did you end up in New Jersey?
I wanted to get out of New York. Jamaica, Queens became part of the blighted urban landscape. There was a lot of crime, a lot of vandalism. It was a hell of a place to learn how to survive in the automobile business. I wanted to go someplace where the countryside was more pleasant and the customer experience was more meaningful. Plus, I wanted to own my own dealership. I really didn't want to take over my Dad's dealership because that place had his signature on it. I wanted a place where I could demonstrate my own personality and business experience.
I got a phone call one day from a man by the name of Joe Rooney, whom I had never met. I answered the phone with my standard, "This is Bob Maguire, what can I do for you?" The voice on the phone said, "It's what I can do for you". I said, "Well, what is it that I can do for you and that you think you can do for me"? He said, "I am the Chevrolet zone manager in Philadelphia and I have an opportunity for you to invest in. Let's meet for lunch." So I drove down to Valley Forge, Pennsylvania where his offices were and he and I went to lunch. He offered me a dealership in Camden, New Jersey. I said, "Camden? I don't want Camden. Camden is no better than where I am now." But Joe said, "That is why I selected you. This is an area similar to Jamaica and you have been very successful in Jamaica. I figure that you could be successful here. It has a union and you know how to work with unions. It's got a crime problem but you know how to deal with that and protect your assets." I said, "Look, Joe, when I leave Jamaica, I'm going someplace where I am probably going to spend the rest of my life. That is what I am working towards. I am not going to settle for less than something better than what I already have." Joe said, "Well, that is all I've got for you." I told him I was sorry to hear that and I was disappointed, but if another opportunity presents itself, please call me. So I get in my car and I'm about to drive out of the parking lot when he steps in front of the car, walks around and says, "Would you be interested in Bordentown, New Jersey"? Well, I had already done my homework on that. I had called some friends to find out what opportunities might be available in the Philadelphia zone and I was told that Bordentown was a possibility. And I said, "Yes, I am." Joe said, "All right, let's go in and I will give you the specifications and we will go to work on you getting this deal." The rest, as they say, is history.
Early on Bob, what did you see as the keys to being a successful dealer?
Establishing good relations with the community. Trying to prove to the community that you aren't there to suck all of the money out of the community, but that you are committed to contributing. That is how I built my business. I did it by word of mouth, one deal at a time. My slogan in business is, and my signs outside simply say, "Bob Maguire, a name you can trust." That's what I wanted people to understand in their business dealings with me. If I sold them something, if I said something, if I did something, they could trust me to be truthful, honest, sincere and reliable. That is the foundation upon which I built my business.
What was your early involvement in dealer associations?
When I was in the Marine Corps, I was stationed at the Marine Corps Recruit Depot in San Diego, training recruits. It was 1961 and the NADA convention was in San Francisco that year. My father was a strong advocate of association membership. He had come out to San Francisco for the convention. He called me and he said, "Son, why don't you take some time off and come up. Get some leave, come on up here and join me. We could spend some time together in San Francisco." I went to the NADA convention with my Dad and he introduced me to the dealers, the trade association people, and representatives of the manufacturers that he knew. He introduced me to the automobile business and to the NADA at that convention. I look back upon that rather fondly because that was my first contact with the NADA, in 1961, and now, in the year 2001, I have become the leader of the National Automobile Dealers Association.
Why is it that you want to be chairman of NADA?
Over the last several years, I have been very disturbed about some of the direction and actions that the manufacturers have taken. Of course, my manufacturer is General Motors and I represent Chevrolet, so I can speak directly only about General Motors. But I talk to Ford dealers and I talk to Chrysler dealers and they've got troubles with their manufacturers too. I don't think the manufacturers fully appreciate the value of their dealers. I don't think they consider their dealers an asset on their balance sheet. I ran into numerous occasions where I was pretty much told "take it or leave it" or " it's our way or the highway". I wasn't being heard. I don't think that the manufacturers' representatives in the field really work toward the best interest of their dealers.
For example, a number of years ago, General Motors had decided to build an automotive mall on Route 1 in Lawrenceville, New Jersey, not far from my Chevy store. It sounded like a pretty good idea and I called GM's real estate division and told them I had an interest in building a Saturn dealership in their mall. I told them that I would like them to put my name on their list. I thought that put me in line for a preferred location in the mall, but when they called me in to talk to me about the opportunity, they told me that they were going to put the Saturn dealership in the back of the mall. I said, "No, Saturn has been very well received in the marketplace. It doesn't deserve the back of the mall, it deserves highway frontage." They said, "No, we are going to put Chevrolet in the front and we are going to put Buick, Pontiac and GMC along side." They told me the rent was $40,000.00 a month. I said, "No, I don't want to rent it, I want to buy it." They were not going to sell it, they were only going to lease it. I said, "There are two things about this I don't like. Number one, I prefer to buy, I don't want to lease. Number two, the rent is too high. I can't afford $40,000.00 a month." They said, "Maguire, that's our deal, take it or leave it."
So I left it. Three months later at auction, two miles from that mall, I bought ten and a half acres of land on alternate Route 1. They found out about it and called the president of Saturn, Don Hudler. Don Hudler told them he would call me and find out why I did it. So Don calls me and, (this is the reason I love Saturn, because they really do listen to their dealers), he said, "Bob, just tell me, why did you do what you did?" I said, "Don, I didn't want Saturn to be in the back of the mall and I couldn't afford $40,000.00 a month. I bought ten and a half acres on alternate Route 1, with 770 feet frontage to display my Saturns up front on the highway, not in the back." He said, "You made the right decision. Good luck, go build your building." He called them back and told them what I told him and what he told me. They turned around and told Hudler that if he was going to do business like that, they may not be able to work with him in other parts of the country. This is the real estate division of General Motors talking to the president of Saturn Corporation!
Then, this story appeared in Automotive News. A Chevrolet field rep came in and said to me, "Boy Bob, have you pissed off some people in Detroit. They read that story in Automotive News." He told me that one of the senior executives said, "As far as we are concerned, Maguire has burned his bridges with us." I couldn't believe it. I had been a Chevrolet dealer for twenty years. I had bought twenty thousand vehicles from GM during that time. I bought twenty million dollars a year in parts and accessories from them. I sold GM protection plans, I used GMAC for floor planning and customer financing. I was their customer and they tell me I burned my bridges with them? Are they telling me that they don't want my business? Is my business not good business for them?
I was so discouraged that day, I sat down and sincerely thought about getting out of the business; sell the dealership and get out because that was absolutely ridiculous. I had made a good business decision. I represented Saturn and I didn't want Saturn to be in the back. I wanted Saturn in the front. A monthly rent of $40,000.00 was not a good business decision. If they are going to be critical of my business judgment, maybe I shouldn't be their dealer.
Eventually, I decided I had to do something to change Detroit's attitude. What could I do? I was an NADA director, but I said, "That's not enough. I've got to lead the NADA. That's where I can make a difference." So at that point I totally threw out the idea of retiring and I sought the leadership role of the NADA and I have been successful in obtaining it. I've been to Ford Motor Company. I've met with Edsel Ford. I've met with Jim O'Connor and Bob Rewey. I have been to Chrysler and I've met with Jay McDonald. I've been to General Motors and I've met with Ron Zarella. I've met with Bill Lovejoy and John Gibson of GMAC. I now have the opportunity to go directly to them and talk to them from the heart of the dealer to the ears of the manufacturer. I don't have to deal with some of the crap that falls in between us, the middle management. Some of these people really don't give a damn about the automobile business, it is just an eight to five job to them. Some are looking to climb the ladder of success at the expense of dealers. I can overcome that hurdle. I think I can make a difference because I have been a dealer for twenty-five years. Before that I worked for my father for fifteen. I have forty years of experience as a dealer, as a retailer, as a salesman and as a manager in this business of ours. Detroit needs to do what they do best and that is design, engineer and build cars. We dealers should be allowed to do what we do best and that is to sell and service those cars. That's it.
What do you plan to do first as chairman?
First, I want to build on the ground work of my predecessors, Paul Holloway from New Hampshire – outstanding. Jim Willingham from California did an outstanding job. He went to Detroit and got Jack Smith to say, "We shouldn't be in competition with our dealers, we are not going to go out and buy dealerships." Jim accomplished a hell of a lot. My predecessors, including Harold Wells, have already laid some good ground work that I want to build upon. Detroit is coming around. Detroit is starting to listen. Bill Lovejoy meets with us quarterly. Edsel Ford meets with us quarterly. I can't tell you that Blue Oval program is a good program, but at least they are listening to us. We are trying to explain what the pitfalls and hurdles are and how we think they could overcome the problems that they have dealing with that program in regard to their dealers. GM has come to us with some programs that they would like to initiate. We have listened to their ideas. We don't agree with all of them, but we have explained to them why we don't agree with them and I believe they are listening.
Bob, what do you feel is the purpose of the National Automobile Dealers Association?
The purpose of the National Automobile Dealers Association is to be the voice of the dealer. I represent the franchised car and truck dealers of America. Who are we? Are we dinosaurs as some people made us out to be a couple of years ago? No, we are grounded in our communities. The people who live here want us here. Dealers are anchors of their communities.
Where does NADA do some of its best work? Where do you think they most benefit dealers?
They most benefit their dealers in two arenas, industry relations and government relations. In industry relations, NADA benefits dealers by going to the manufacturers and discussing with them the concerns of the dealers. As far as government is concerned, NADA makes sure that legislation and regulatory measures are reasonable and needed. I believe we serve dealers' interests very well in those two categories.
Bob, I get a considerable amount of correspondence from dealers and regularly have conversations with dealers. When there are almost 20,000 people in an organization, you can't keep everybody happy. I have talked to a number of dealers who feel, in some instances, NADA is not representing them fully, whether it is in regard to warranty payment shortfalls, factory involvement in retailing or invoice prices posted on NADA's web site. What do you have to say to those dealers who feel that NADA is not looking out for them?
It is like religion, you have got to believe. This trade association exists for only one purpose: to provide opportunities and protection for franchised car and truck dealers. We don't represent the manufacturers. We represent the franchised car and truck dealers. If franchised dealers think we can serve their interest best by suing the manufacturer or entering the ring to combat the manufacturer, they don't understand that things don't really get accomplished unless you sit down and talk. We are not going to be able to drop an atom bomb and end the conflict. Conflicts today are negotiated. The end of such conflicts generally occur through negotiation. People have got to sit down and reason. If you are going to sue a manufacturer, you are taking away the ability to have direct communication with that manufacturer. You don't want to end up talking through lawyers. Why would the lawyers want to hurry up and accomplish the task when they have got billing hours to fill and book? Suing the manufacturer doesn't necessarily end up serving the best interest of the dealers and that is what we are trying to do. We are serving the best interest of the dealers. Now, why do we post invoice on the Internet? Because everybody else is doing it.
It is out there and if somebody wants it, they can get it.
Right. If somebody comes to our web page looking for information and we don't have that information, click, they are gone. They are going to go to another web page, another Internet site and get the information that they need. They are never going to come back to us. We have got to be able to provide information to the consumer. One of the things that the consumer wants to know is what does the car cost. If we don't tell them on the NADA web site, they are going to get it from any one of thirty other sites.
If a dealer doesn't understand our actions, then they need to call their state director, or their NADA chairman, or they can call their NADA president and say, "Why did you do this?". We will explain it to them. We are not dealing behind the scenes.
Bob, what do you see as the biggest challenge that the dealers will be facing in the near term?
The development of the Internet as the new way of advertising and marketing automobiles. The Internet is not going to bring about a sale of one more car or truck than we already sell
It is just going to help decide who sells it.
Right. Dealers have got to learn how to embrace that quickly, or they are going to be left behind because there are dealers who are more advanced on the use of the Internet and dealers have got to learn to protect their turf and not let other dealers poach in their markets. We have got to educate dealers and make them pay attention to the Internet as a marketing tool. The other issue, which is very important, is mandatory binding arbitration. Unfortunately, the manufacturers created the circumstance themselves where dealers found themselves in inequitable positions. They went to their state legislature and got state franchise laws passed that protected their rights to deal with the manufacturer. Today the manufacturer has got to deal with fifty different state franchise laws that are in existence. How do they do that? Well, now they think they have found a way to overcome that by inserting mandatory binding mediation and mandatory binding arbitration language in the franchise agreement, making the dealer give up his rights accorded to him under his state franchise laws. A dealer shouldn't have to be forced to do that. This is why we are seeking relief in the congress through outlawing of mandatory binding arbitration in manufacturers franchise agreements.
Outside of the Internet, what do you think is going to separate the winners from the losers in the retail automobile business?
Taking care of customers. I'm sure that there are still some dealers who take advantage of customers. I know that exists out there. I grew up in this business, I saw it happen. I don't concur with it. I think that dealers have got to deal ethically, and be held accountable for their actions. Dealers have got to provide customers with an experience that meets or exceeds their expectations. If they don't do that, they are in for failure.
How are you going to make the dealers' case over the next year while you are running your business?
I'm going to do it one day at a time. I'm going to do it with each person who I have an opportunity to talk to, with each person who will listen to me, and with each opportunity that is afforded to me to make that case. I will go anywhere in the United States to make that case. I will speak to any manufacturer to make that case. I will speak to any sub-committee in congress to make that case. I will speak at any state legislative house to make that case. I will speak to any chief of consumer affairs to make that case. I will speak to anybody who will listen.
