As the DEALER advocate magazine, DEALER
welcomes your letters, and after verification will run them signed or
unsigned. Letters may be edited for space and clarity.
Send To:
DEALER magazine
1116 W. 7th Street
PMB 239 Columbia, TN 38401 (931) 388-1800 ext. 203
Fax (931) 388-4881 e-mail: mroscoe@dealeronline.com
Some factory bean counter observed how much $$$ dealers were making and decided, "Hey, if I can get some more of that into the company till, then maybe, just maybe, I'll get two gold watches when I retire." How else can you explain it? Corporate auto dweebs don't have the personality or gumption it takes to retail steel! First of all, you need a personality, be able to think on your feet, not just cover your ass with memos. Second...aw damn, I could go on for hours. I think you get my drift.
Christopher M.
Neuber
Executive Vice President
Oregon Auto Dealers Association
Metro Portland Auto Dealers Association
Jim Ziegler:
Totally agree with your
comments and as a retired Ford Bonus Role employee, now in the retail world,
I thought you would find it interesting that while as Jack the Knife's income
grew to $10 million, the non-executive level bonus role employees had their
bonus cut 25% for not making his customer satisfaction goal, most of which
is the result of quality problems caused by his own cost-cutting efforts.
By the way, I see these problems every day since I am in the fixed operations
part of our business now.
Name withheld upon request.
Greetings Mr. Ziegler:
I am a parts manager at
a small Chevy store in Central Illinois. I have been in the auto business
for fourteen years now, eight years as a salesman and the last six as a parts
manager. When I hear a loud yelp of excitement coming out of the owner's office,
I know the new DEALER magazine has arrived. He always drops whatever he may
be doing and heads for your column and I hurry back to the parts department
to catch up on any pending duties because I know that in ten minutes, he will
be back at my desk and I must also drop everything and read your essay so
we can discuss it. There never is an argument because we have always agreed
with your comments one hundred percent. We also read the Automotive Fish Wrap
and have great fun trying to pick the news item that will be discussed in
your next issue.
I have been telling the boss for the last couple of years that I actually hoped that GM had a secret plot to eliminate the dealer body, as at least that would show that they were competent, if evi1. Unfortunately, your columns tend to lead me to the conclusion that while they have no love for the dealers and they may be evil, competency is not one of their traits.
We have been begging for two-wheel drive pickups for months now and only recently did the boss get hold of someone at GM who was willing to explain the problem. Some empty suit in Detroit decided last October that it was going to be a hard winter and 4x4's would be all the rage so they locked in their production for this region to seventy percent 4x4's and thirty percent 2WD. We are told that this cannot be changed before November! The sad part is that, come November, the same idiot will be in charge of setting production goals for next year. God help us.
Today, some marketing doofus stopped by so the boss could fill out the forms that would allow GM to install an interactive kiosk in the showroom. It would cost him almost three grand and there would be a monthly service charge of another couple of hundred. When he asked her what box he could check to opt out of this nonsense, she told him she had no idea how or even if he could. She told him that everyone else she talked to was excited about the program. He told her she was full of crap and showed her the door.
I told him the kiosk was probably intended to allow customers to get financing directly from GMAC. He called several people in corporate and finally found out how to cancel his kiosk.
I know you are a very busy man and I apologize for the long-winded message, but after several years of reading your columns, I had to write and thank you for being a voice in the wilderness for us small dealership people as we try desperately to keep our heads about us while dodging the boulders that GM is rolling down the slope.
I was told by a GM exec eight months ago that the attitude at GM was, "We will build what we want to build and if you don't like the products, screw you. We will sell them to someone else." These are the people who want to deal directly with the consumer? I don't think so...
Best of luck and keep up the good work.
Denny Garland
CHANGE IS INEVITABLE;
progress, optional.
Mr. Roscoe:
This letter is in response
to your "Dealer Mail" letter published in the May 2000 magazine
and signed by "Name Withheld Upon Request." I recall many similar
letters being written by dealers in previous issues, targeting various manufacturers.
I want to commend the person who wrote that particular letter for taking the time to tell it as it is. His closing remarks stated that "the dealers had better reorganize"-he may be right.
Every organization requires capital investment as well as cooperation, dedication, allegiance and trust. I've always thought that the franchise system fit the description the best. However, it is quite obvious that the management at General Motors is trying to either redefine or eliminate the system that has so greatly contributed to the success of the company they work for.
Of the requirements stated, a stockholder only qualifies with capital investment. The staff, the management and the employees are compensated in various ways for their dedication and allegiance. However, they can easily sell their talents and interests to a higher bidder. The franchised dealer, on the other hand, meets all of the requirements. In most cases, he has more capital investment than most stockholders and his very livelihood hinges on the remaining requirements. The manufacturer does not guarantee any dividends to the dealer. The manufacturer does not pay his salary, health benefits, sick days or vacations, and doesn't pledge a dime towards his retirement. In short, the franchised dealer is by far the best investment and most valuable asset the manufacturer has on the financial balance sheet.
Just as life itself is a two-way street, so is cooperation and trust in the relation between the manufacturer and a dealer in a franchised system. Inch by inch and step by step (as mentioned in the referenced article of May 2000), General Motors has crossed the
dividing line of the two-way street and is forcibly squeezing their dealers off the road. Their attitude is as such that they want to change the intent of cooperation to cooperative. Hence, they have violated the trust of their dealers.
An agreement mandates trust between the parties involved. The word itself does not have to be stated as such in the agreement. For the amount of time, effort and investment that is takes to operate a franchised dealership, the sales and service agreement realistically parallels a marriage agreement-and we all can appreciate just how important trust is in this scenario.
Frankly, because it is my livelihood, the amount of time, effort and investment I have made in this franchise was a contributing factor in my divorce.
I hope that your readers include the staff and management of General Motors. There would not be enough room in this magazine to print all that I have to say to them. However, I would like to state the following:
1. Rethink your strategy and your course of action. I believe you have a lot of dealers like myself who have dedicated a tremendous amount of our resources to sell and service your/our product. Give us the consideration we deserve and the support we need to satisfy our customers. The NADA dealer survey ratings are telling you something...Listen!
2. We have a very good product. However, there is always room for improvement. Concentrate on the quality of the product and produce what the customers need and want. Your publicized motto is, "Do one thing and do it well." Practice what you preach.
3. Straighten out your Vehicle Order Management System (VOMS) and your supply systems. It's frustrating for your dealers to try and explain to customers why you can't build their truck within a realistic period of time. It took you eleven months to build a sold order for one of my customers. It only takes nine months to produce a full-term human being!
Within those eleven months, we checked the locator system countless times. There were no trucks of this type available until you had your Quarterhorse Convention in Ohio. All of a sudden there were dozens of them available-but only for the convention. Five of the several dozen were identical to what we needed for our customer sold order, but our order was still on "constraint." The steps in the VOMS system are:
- A. Request orders 90 days in
advance.
- B. Wait for allocation.
- C. Wait for generated orders
against the allocation.
- D. Check constraints and change the orders to comply with available options.
Give us dealers a break and do us a favor: don't publish brochures or advertise product and options you can't supply us with. You're driving us crazy. We're losing the confidence of the customer base that took us years and years to establish. We ordered eight trucks for the month of May and did not receive even one generated order. We've had to cancel six sold orders and refund the customer's deposits because of constraints. Should I say, "Thank you"?
Satisfy our sold orders before you build any units for your promotions or for the bailment accounts which use up the components the sold orders need. I lost my shirt on the vehicle I traded on the truck you took eleven months to deliver, just to maintain my credible reputation and to satisfy the customer. Get your house in order and get your act together.
4. Stop shifting the costs of your mandated programs onto the dealers' shoulders. Examples: Pro-Spec, Techline, Distance Learning, Service Net, Essential Tools and the exorbitant prices we are charged for display materials. You're smothering us with expenses that are driving our overhead through the roof.
5. Eliminate the rebate and incentive programs. They are nothing more than "gimmicks" to intimidate, manipulate and confuse both the franchised dealers and consumers.
Rebates are applied and revoked at the manufacturer's discretion and limited to targeted vehicles. Incentive programs are discriminatory in nature because they only benefit individuals in targeted locations. There are no provisions built into the programs to reimburse the dealers for the floor plan interest they have paid on those funds while the vehicle was in his inventory. Invoice the vehicles to the dealer at net/net and let the dealers deal with the consumer.
A few of the times given are examples of where I feel the manufacturer has crossed over the divided line of the two-way street. I personally feel that they should be reprimanded for unethical practices against dealers' franchise rights. The suggestion of a dealer reorganization would not be necessary if the manufacturer would get back on his own side of the road to avoid a collision. The dealer's very survival requires him to get off the berm and back onto the blacktop. The solution to the problem is cooperation.
Finally, a word to my fellow dealers. Don't be afraid to have your voice heard. We can't afford to give up any more ground and we are entitled to a lot more than the concessions I've mentioned for the sacrifices we must make and the job we are expected to do. Above all, don't be afraid to sign your name to state that which you feel is fair and just.
Respectfully
yours,
John F. Craig, Jr.
Dealer
Triple "C" Truck Sales & Service
Dear Mr. Roscoe:
For those of us who have
been in the auto business for 20 years or more, we've seen the imagined threats
to the retail car dealer from (1) mega dealers, (2) publicly-financed dealers,
and now (3) the internet. Really! As long as the manufacturers overproduce
(which all of them do except BMW, Mercedes, Honda, Toyota and Lexus) then
they'll need car dealers to inventory and sell their overproduction. That
is not to say some dealers won't go out of business but those who do will
be the ones who pick the wrong franchises. Already, dealers are selling cars
for zero gross profit from net/net and trying to con profit by switching customers
unknowingly to leases, charging exorbitant interest rates, selling junk like
overpriced extended warranties, rust-proofing, fabric and paint protection
and the etch scam. (And we wonder why decent people don't want to enter the
auto business?)
The manufacturers who overproduce constantly (just look at the manufacturers who, year in and year out have an over-60 days supply) force their dealers into selling this aftermarket junk just to stay in business. At the same time, those same manufacturers spend hundreds of millions of dollars in advertising to try to build brand image while their dealers are forced to tear it down. Obviously, the truly great brands don't need much advertising. I remember when Cadillac never advertised on TV because it would ruin their brand image. At the time they were the best automotive brand until some idiot at GM decided to overproduce and do lots of TV advertising to "push iron." He turned a great brand into a commodity.
I was very proud of a BMW manager at a recent meeting who said that BMW would cut back production of a certain model until it reached the level where demand exceeded supply. Why can't the rest of the manufacturers realize that when demand exceeds supply, everyone makes money?
Ed King, President
KingCar
Freehold, NJ
Dear Jim:
Just finished your latest
column, you are correct. Forget Superman...what about all Mr. Rogers taught
us about playing fair and being nice to our friends?
I am a member of the Ford Select dealer subcommittee, representing small Ford dealers. To say they are angry is putting it mildly. In the past several weeks, I have heard "class action lawsuit" from at least five dealers in my region.
For the little guy it is especially hard. Ford gives you NO inventory. In our case, our sales in '99 were up, cars 40% and trucks 22%, yet we will receive less units this year than last. We were up for YTD through May, but I have less than 20 units in stock. Our store will have been shorted from 1999 approximately 30% of what we sold the prior year. What happened to my turn and earn?
Ford wants us to pay full retail for the new sign. Ford wants us to carry the expense load of Blue Oval certification, then some person who knows nothing about my business decides if I have a good operation and I get my own 1% of invoice back. Yeah, Ford is going to kick in .25%. Or does it come from all those guys who don't get JD Powers' seal of approval? The real killer is that being a small dealer, you don't even get the inventory to sell to defray some of the expense of their program. What is wrong with this picture?
Dealer name withheld upon request
Mr. Roscoe:
I discovered something a
few months ago that I am sure you will find very interesting.
GM bought property in Tyler, Texas, on the loop and built a Saturn dealership. This dealership, according to my source, has a two-car showroom. My source also advised me that GM was going to operate the store but were prevented from doing so by the state. The building has been finished for several months but has never opened. The last word is that they are trying to find a dealer that will belly up to the bar and assume an almost $3,000,000 overhead for the dinky little place. In my opinion, there is no way to sell enough Saturns to make the place profitable.
As I drive by the dealership, I can only laugh out loudanother GM screw-up.
Dealer name withheld upon request
Dear Mr. Ziegler:
I enjoyed your recent articles
on Ford Blue Oval. We have been a Ford dealership for 71 years. Ford Blue
Oval certification is cost-prohibitive. We have always scored high on customer
satisfaction and I think being around for 71 years says that. We have always
had to buy Ford's high-priced programs and special tools, and watched our
times on labor for warranty repair being reduced unfairly. I think Blue Oval
certification is way off-base.
Ford maintains, "fix it right the first time." I maintain, "build it right the first time" and let us run our business successfully as we have done for 71 years.
Name withheld upon request
Jim Ziegler:
I met you a number of years
ago in the Washington, D.C. area when you were doing a seminar for Commonwealth
Dealers Life Insurance and I worked for the Washington Area New Auto Dealers
Association (WANADA). I have enjoyed your articles in DEALER magazine and
tend to agree with most of your points.
Maybe you can answer a question that keeps cropping up in my little ol' pea brain. Not that my brain is defective, but I get the feeling that this question is soooo simple, why hasn't anybody answered it? Why? Why are the factories spending millions and millions on these crazy ideas? Ford Auto Collection, General Motors Retail Holdings, Ford Blue Oval? Just who is the Village Idiot? When did he/she come up with the idea that profitable new car dealers are a sin? And why is everyone playing follow the leader?
