Colonel Mustard in the Library with the Rope
By Jim Ziegler
From the very beginning, I was leaning toward Professor Plum in the Library, but I was still struggling with the weapon. I had it narrowed down to the Candlestick or the Rope.
My wife rolled a six and entered the Kitchen. I knew it wasn't the Kitchen, after all I was holding that card. She called out "Mr. Green in the Kitchen with the Revolver." Now I was sort of snickering to myself because I had both the cards for the Kitchen and Mr. Green. Zachary showed her a card. (I already knew he was holding the Revolver card.) I showed her the Mr. Green card leaving her with the false assumption that it might be the Kitchen.
Just to throw her off track, on my next roll I went into the Kitchen and called out "Professor Plum in the Kitchen with the Knife." Of course, I was also holding the card for the Knife. I really didn't expect either of them to show me anything, which would reinforce my wife's mistaken impression that the crime happened in the Kitchen and would ultimately cause her to blow it and lose the game. I love my family deeply, but when we play "Clue," it's every man (person) for himself. This game is serious business. When the Zieglers play Sunday night board games, it's always a bloodsport.
Clue is such a diabolical game. There's a lot of strategy, intrigue, deception, and misdirection. If you're really good at it, you can lead the other players on a wild goose chase.
We were doing some housekeeping at the office recently, and I was cleaning out my personal file cabinets. Every once and a while you have to dive in and throw out some of the outdated stuff you've filed away and forgotten. As I was digging through some old promotional materials, I came across several copies of a White Paper Report I had written back in 1993 titled "The One-Price Conspiracy." At the time I wrote the report, I felt so strongly about it that I printed and mailed over 20,000 copies to dealers nationwide at my own expense.
Sitting at my desk, reading words I wrote nearly eight years ago, I realized everything I was saying then is still in motion now. All of the events that are currently unfolding in the retail automobile industry were outlined in the report. Theories and suspicions, plots and subplots, it was all coming together. A larger picture was developing as I began to put the final missing pieces into the puzzle.
I believe several of the manufacturers, specifically Ford and General Motors, were already starting to make a conscious decision to get rid of their dealers somewhere way back there in the early nineties. Ron Zarella and Bob Rewey aren't responsible for all of the mean and dishonorable things the factories are doing to their dealers. These things were already in motion before either of them rose to power. It is true, however, that you must have mean and dishonorable people in key henchman positions to carry out dirty tasks.
Value-Pricing and One-Price Selling were the tools they needed that would be absolutely necessary to establish the uniformity required to standardize such a large undertaking. They piously quoted customer satisfaction issues supported by alleged J.D. Power research in an attempt to justify what they were doing.
As the large, corporate players entered the arena in the late nineties, the factories became increasingly nervous. The emerging Internet intensified the perceived threats. They felt they had to move now or lose control of their distribution system.
I kept thinking, "What is the common factor? Why are all of these factories moving in unison, making all of these hostile moves against their own loyal dealers?"
Now we see General Motors announcing they are phasing out the Oldsmobile Division. Of course, I don't believe you'd ever hear Jack Smith, Rick Wagoner or Ron Zarella describing themselves as being "inept bumbling incompetents," but there is an overwhelming stack of indisputable "smoking gun" evidence piling up here as the number one manufacturer in the world continues to lose market share.
I know, I know, some things are so stupid and so far beyond comprehension that they defy logic. I find it absolutely incredible that Ron Zarella is still employed as the marketing Czar of General Motors! Go figure.
I was listening to the radio the other day, the oldies station, and I heard that wonderful old ballad by Neil Diamond titled "I Am I Said?" Some of the lyrics went like this,
"Did you ever read about a frog who dreamed of bein' a king, and then became one...
Well except for the names and a few other changes, this story's the same one."
Although I am fairly positive that Neil Diamond never met Ron Zarella way back in the seventies when he wrote that song, I just felt compelled for some reason to mention it here. Forgive me if it's not appropriate.
The real story is, why Oldsmobile, why now? We're talking about Oldsmobile here, once the hottest nameplate in the industry, selling more than a million units annually just a little over a decade ago. Just how do you lose that much market share?
Picture this! What if I told you that within ten more years there wouldn't be any more Honda Car Dealerships left in the United States? You'd think I was crazy right? There is no way that Honda could possibly go out of business in just over a decade. Well, that equates to what has happened to Oldsmobile. They had about the same market share as Honda now enjoys just a little more than a decade ago, and somehow these fools managed to piss it all away. And these people want us to take them seriously. If they were Japanese Samurai, at least they'd have the dignity to go off in the garden and perform that hari-kari ritual with the knife so they could save face. Zarella doesn't even appear to act like he knows he should he ashamed. Did you see the December 18, 2000, editorial in the Wall Street Journal? They have Zarella's number too.
The plot doesn't really thicken until you stop and consider that General Motors just dumped another 1.5 billion dollars into propping up Saturn. Is Saturn Division profitable? Why is General Motors willing to throw away Oldsmobile, while at the same time, they are pouring additional billions into Saturn?
General Motors has recently stepped up and increased the pace as well as the intensity of their lobbying efforts to defeat state franchise laws and gain exceptions in states where factory direct sales are prohibited. The focus is Saturn. There is a huge public relations effort on right now putting pressure on some of your state dealer associations to help them to get Saturn Corporation legislative exemptions that would enable them to sell directly in those states. They want exemptions for Saturn.
Let me tell you what I think is going on here. I think General Motors is planning to beef up Saturn to be able to sell directly and then they are planning to dump their other divisions.
I believe Saturn is the "Trojan Horse" that General Motors is banking on to defeat their own dealers and overturn the states' franchise laws coming in through the back door. I think that they think Saturn is the factory-owned, retail-direct brand name of the future. They have already diverted their hottest new technology and best future product to Saturn. Despite the fact that Saturn sales continue to dive deeper into the toilet and the fact that they've repeatedly had to close plants and lay off employees, General Motors continues to prop up Saturn in spite of losses. If losses and viability of the franchise were the only criterion for the decision, then Saturn should have gotten the axe instead of Oldsmobile.
Several years ago, when General Motors gave Saturn a full-sized car (the LS), they touted loudly it was going to turn around the division. Of course, nobody bought it–not the car or the line of bullcrap–and they ended up with still another predictable Saturn disaster on their hands. Excuse me, I've said repeatedly that Saturn appeals to Nerds, Geeks, Wimps, Tree-Huggers and Propeller-Heads, as well to a handful of normal people. It certainly isn't perceived as a mainstream product. There's no amount of new product or technology that will ever make that pig fly. The public has rejected the car and the sales concept.
Now it appears to me that they are even willing to double-cross their own Saturn franchised dealers with Internet direct sales at prices lower than showroom prices.
"Oh Gawd Maude, Saturn's trying to go to two-tiered pricing; who do they think they are–Blue Oval?"
Well, so much for "One-Price Selling." There's a "Not-So-Top-Secret" initiative at General Motors in conjunction with e-GM for Saturn to become the Internet Division of General Motors. They are modeling the project after some online sales strategy they allegedly tested with some real cheap little cars in Brazil.
Follow my logic here folks; it gets better. What if General Motors was to continue to give Saturn all of the hot new product and new technology first? Now that Saturn has a proven track record for incompetence and failed concept, they have been awarded the prestigious Ron Zarella award of excellence in the form of a new sport utility and a mini van, as well as first crack at retailing the new Delta platform, while other General Motors nameplates are stuck with stale, old-design, out-dated technology like Cavaliers and Sunfires.
Remember, I have always said the reason General Motors market share and sales are in the toilet right now is because of all of the billions in research and development money they've wasted through the years developing and subsidizing Saturn while neglecting their other divisions, especially Oldsmobile.
There are rumors flying hot and heavy that GMC trucks will be the next General Motors Division to get the axe. I've heard from industry sources whom I usually trust that GMC Truck Dealers are dinosaurs eating the last shriveled brown leaves from the trees.
Let's pretend for a moment that's true. What if GMC is slated to be the next sacrifice? Is there a possibility Saturn will then get a full line of trucks? Imagine this, what if Saturn and Cadillac were to suddenly get full truck lines as well as SUVs, and what if GMC trucks were to disappear from the landscape?
I am not 100% certain that Pontiac and Buick are not also on the "Hit Parade." What if General Motors emerged as only three surviving divisions: Chevrolet, Cadillac and Saturn?
Saturn Corporation Chairman, Cynthia Trudell, was recently quoted as saying, "Saturn dealers will always be necessary to service and deliver new vehicles no matter how far the company goes into direct selling of cars and trucks online. Excuse me! Is it just me here, or does it occur to anyone else that they are possibly planning to simply kill off the other franchises by building up Saturn direct sales? As I said, it appears that they are even willing to openly double-cross their existing dealers in the bargain. I am going to offer a warning to Chevrolet, Pontiac, and Buick dealers here, "Don't be overly secure." If I am right, nobody is safe. Even Chevrolet dealers could be on the endangered species list.
If I am speculating correctly here, they could render your dealership's franchises worthless through unfair competition and by continuing to give the best new product to Saturn. I am going to be very curious to see what happens to the Aurora, Alero and the Intrigue. What if Saturn somehow ended up with the entire lineup of Oldsmobile's hot new technology cars? Even if they gave them the Oldsmobile technology with new names for the cars, wouldn't that still be a real slap in the face?
How would you like to be one of those Oldsmobile dealers caught up in this ambush? The factory seduced and coerced these loyal dealers to put up a major investment in improvements designed to enhance General Motors' brand image. Now their franchises are absolutely worthless. Fellow DEALER magazine contributor Sheldon Sandler said the dealerships are only worth the price of the used furniture.
Even though Saturn has repeatedly demonstrated their concept doesn't work, and that it never will work, General Motors inexplicably keeps pouring stupid amounts of money and resources into it. Statistically, it appears to me that Saturn is a much greater failure than Oldsmobile ever was. At some point, you have got to stop and ask yourself "why"? Why are they pushing this loser so hard?
Knock me down with a feather. Keith Crain's editorial in the December 18, 2000, edition of Automotive News says "How much of the investment in Saturn, which will never make money, could have been used to save Oldsmobile?"
Sniff, there is a sentimental tear rolling down my check splashing into the snifter of Remy Cognac next to the keyboard. I bet you guys and gals thought that ole Keith and I never saw eye-to-eye. Well, actually, I must admit, neither did I. Although we never have seemed to agree on much in the past, maybe we're both mellowing out and moving closer to center here naw.
On the Lebanese-Australian front, Ford Motor Company continues to doggedly push their Blue Oval Certification initiative. The pressure is on, and there is an all-out push to win dealers over in face of the lawsuit supported by the Ford Dealer Alliance against what they are calling unfair and discriminatory two-tiered pricing. My opinion: Ford should be dedicating all of their energies and resources to addressing their epidemic poor quality crisis instead of allowing diminutive egomaniacal Napoleonic dictators to persecute their dealers.
Those of you who follow my column (you can archive past articles at http://www.dealeronline.com) are aware that I have repeatedly criticized Ford Motor Company for what I feel are blatant and malicious attacks designed to crush their loyal franchised dealers. Once again, there appears to be a pattern aimed at exterminating the franchised dealers and controlling distribution and sales while controlling prices and confiscating and seizing dealers' profits. This will lead to unfair price-fixing. Ultimately, the manufacturers will screw consumers.
I am now sitting here in my office wearing my Sherlock Holmes hat, the plaid one with the earflaps and the two brims, front and back, carefully examining the evidence with a huge magnifying glass. My God, Watson! I think I've discovered the answer. The evidence seems to point to one single villain, an evil and sinister power broker, a deceptive dastardly rascal and his band of actuarial cutthroats. Eureka! I believe I know who did it.
Look at this, Watson. In almost every case, the single common factor seems to be the factories' reliance on J.D. Power and Associates. Every manufacturer seems to be using their alleged research as a justification for their actions against the dealers. The one common thread running throughout this whole despicable equation appears to be the participation of J.D. Power and Associates in documenting the factories' flimsy rationales and justifications for their deceitful actions. Egad, Watson, this Power is diabolical.
Remember the original "One-Price Conspiracy" back in 1993 was launched as a result of J.D. Power alleged research. Why do you suppose it is, Watson, that J.D. Power continually rates Saturn at, or very near the top of every Customer Satisfaction Survey when, statistically, nobody appears to be buying Saturns? If J.D. Power's alleged research was actually valid, doesn't it stand to reason that all of those satisfied Saturn customers would be buying lots of Saturns and spreading the word to others who bought even more of them? Aren't Saturn sales in retro, Watson? Is it just me or does something about this seem contradictory, or at least rather strange, or maybe, possibly, downright bogus?
Personally, I have always been distrustful, suspicious, and critical of J.D. Power and Associates and their increasing role in what I personally feel is an escalating attempt to influence and control the retail process. I believe they crossed the line a long time ago and can no longer be considered an impartial and honest research firm. It appears to me that they aren't reporting industry trends as much as they are creating and fabricating them and then profiting from the result of their alleged research. That's just the way I feel about them.
The very fact that Ford Motor Company has actually introduced J.D. Power employees actively into their dealerships making them part of the retail process only further confirms and validates my suspicions. You Ford dealers are actually going to allow J.D. Power and Associates to inspect your dealerships and report to the factories? If I were a dealer, I would never allow these people into my business nor would I give them access to my customer database or financial statistics. The very thought disgusts me. Absurd!
In my opinion, and this is only an opinion based on what I feel to be strong evidence, J.D. Power and Associates has gone far beyond the role of researcher. It appears to me they are now actively influencing industry events for what I perceive to be their own questionable agenda as well as great financial gain. I personally believe their alleged research to be tainted, inaccurate, based on false premises and flawed methodologies, as well as preconceived ideologies. In other words, I personally believe the fight is just starting and the fix is on. There's a researcher in the woodpile.
In concert and collusion with certain biased and slanted industry publications, I believe it would be possible for J.D. Power and Associates to become involved in steering industry events under the guise of researching and reporting trends. If it were possible, would it be credible to assume that perhaps, just perhaps, J.D. Power and Associates might actually be capable of contributing to or even orchestrating and encouraging some of the factories anti-dealer, anti-franchise initiatives? Is any of this factory anti-dealer sentiment emanating from or being encouraged by J.D. Power and Associates? Now that's a wild speculation. Go figure!
I was closing in on both of them now. Zach and Debbie were going to be so mad when I solved the case and won the game.
I already had Mommy running around the board thinking it happened in the Kitchen, when I knew for a fact it had happened in the Library.
Much to my surprise, Zachary showed me the card he was holding for Professor Plum. I wasn't expecting that. This changes everything! Now this is going to be a real problem. You see, up until now, I had been certain it was Professor Plum in The Library with the Rope and now I was going to have to regroup and rethink this thing. Wait a minute; after studying my scorecard for a few seconds, it's Colonel Mustard. It's got to be Colonel Mustard. Of course, how could I have missed that? Well another case solved. I was laughing out loud, chuckling and chortling as I announced to my family,
"Colonel Mustard in the Library with the Rope."
As I reached for the envelope to prove my answer I noticed Zachary and my wife were both giggling. You know that sort of suppressed giggle that really pisses you off, unless it's your wife and kid doing it, then it's kind of cute. Well, as I began to open the envelope, Zachary flipped over a card, and then he really started laughing out loud. It was Colonel Mustard. He had been keeping it from me the whole game. Sure enough, it was Mrs. White in the Library with the Rope. Zachary had sucked me into believing it was Colonel Mustard. I hate losing to wives and twelve-year-olds.
More Food for Thought
The headlines said there is going to a glut of Dot-Communists at this year's NADA Convention.
According to the NADA, there are going to be 26 exhibitors with Dot-Com connections at this year's event in Las Vegas. Doesn't anyone pay attention? Earth to car dealers: wake up! The Internet is falling like a rock across the board. The only industries really selling anything on the Internet are the travel industry and the stock brokerage/investment industry. I just read where e-toys.com is on the ropes and out of money. Even Amazon is likely to experience financial problems. Please listen to CNBC, CNNfn or Bloomberg, all of the Internet companies are dropping like flies and the retail auto sites are dropping faster than the rest. Beware. Don't sign anything with these people. Stop converting our retail customers to fleet buyers.
Please take a moment and archive the December 11, 2000, edition of Barron's magazine, a respected source from the Dow Jones folks. (As opposed to biased, Automotive Fishwraps) There is an incredible article by Maryann Keller and Ken Elias titled "Stuck in Reverse– Two Seasoned Veterans Tell Why Selling Cars Online Just Doesn't Work."
The article consisting of two full well-researched pages detailing exactly why automobile Internet sales are a major non-event... and will continue to be. I know the factories and the special interests are disseminating a lot of false information, but it just ain't gonna happen folks, never ever gonna be significant. Don't let the factories and the dot-communists talk you into buying those look-alike Cobalt cookie cutter web sites.
Jim Ziegler is president of Ziegler Supersystems, Inc. jziegler@dealeronline.com
