Truth, Justice and the American Way
By Jim Ziegler
What an incredible weekend! I have just returned from a grueling road trip, doing five speeches and seminars in five cities in 10 days, and today was the first time that I have been able to relax and unwind-a chance to spend some quality time with my family. It is 10:30 on a Sunday night, April 16th, and I am sitting here alone in my home office.
My wife and her mother spent most of the day shopping while Zach and I did some genuine male bonding-you know, "man stuff."
First thing we did, we took the cover off the Corvette and cranked it up for the first time in several months. We just sort of drove around wearing our sunglasses and baseball hats with the hatch top off. You know, being cool. It was a beautiful day. Nothing is more gorgeous than Atlanta when the dogwoods bloom.
Then we threw the baseball in the front yard for about an hour. Tell me you can't smell the strong scent of testosterone in the air about now.
As if it couldn't possibly get any better than this-guess what? There is a marathon weekend on the nostalgia channel on cable television. It's Superman weekend. They are running back-to-back, twenty-four hours a day, one after another, old television episodes of "The Adventures of Superman" starring George Reeves. They don't make television like that anymore. The good guys were really good and the bad guys were socially unacceptable and the strongest profanity you hear is Perry White saying, "Great Caesar's Ghost."
Here we were, a 53-year-old father and his 11-year-old son, watching television shows dating back to when Dad, himself, was only 11. Every episode opened the same, with Superman standing in front of the waving American Flag as the announcer said those immortal words, "Faster than a speeding bullet, more powerful than a locomotive, able to leap tall buildings in a single bound.
Look! Up in the sky! It's a bird, it's a plane, it's Superman!
"Yes, it's Superman-strange visitor from another planet who came to Earth with powers and abilities far beyond those of mortal men. Superman-who can change the course of mighty rivers, bend steel with his bare hands, and who, disguised as Clark Kent, mild-mannered reporter for a great metropolitan newspaper, fights the never-ending battle for Truth, Justice and the American Way."
Wow! Even now, just remembering those words sends several tears splashing into the snifter of Remy Martin cognac beside my keyboard.
When you were a kid, did you ever wish you were Superman? Did you ever run around the front yard wearing a cape made out of a towel, jumping up in the air every three or four steps? Well, if you said "no," you're either a liar or a whuss-unless you were a girl. (If you were a girl, then it's okay that you didn't do this. It was a boy thing.) I'll tell you one thing though-I bet Superman would clean up this car business.
There's a lot happening all of a sudden and I have been carefully meditating and putting my personal spin, my personal opinions, on recent news and ongoing events.
First of all, did you read that Jac Nasser made like $10 million last year? That's absurd. Even Bob Rewey is reported to have drawn a paycheck of more than $2.5 million in 1999. (Memo to self-call Bill Ford and tell him I have an idea on how Ford can cut expenses by about $12.5 million dollars while increasing sales, product quality and dealer morale.)
First of all let me thank all of the dealers and executives for the flood of mail and e-mail I am receiving. There is not a week that goes by that I am not hearing from at least a hundred of you-it is overwhelming. Although the vast majority of the mail I receive is supportive, I appreciate those of you who write or e-mail expressing other points of view. Last issue I was blasted by several dealers who are friends of mine for questioning Ford quality.
Well guys and gals, everything I wrote is documented in the mainstream press. And the truth be known, I predict that you haven't seen the end of it yet. Every manufacturer is having a field day squeezing the suppliers tighter and tighter. Ford is at the forefront of this movement. Does it occur to anyone besides me that these suppliers are taking shortcuts under pressure? These problems with quality were inevitable. On top of that, Ford has reduced warranty hours for repairs and squeezed the dealers to the point where I believe that customer satisfaction has got to suffer when the mechanics/technicians don't have time to properly fix or road test the cars to fix factory defects. Does the owner of a brand new car have the right to expect brand new replacement parts to be used in warranty work as opposed to rebuilt junk parts and assemblies?
This is where I get some of my research: If you really want to see something eye-opening, go to www.lemonaidcars.com on the Internet. This site, which has won some prestigious awards, lists all of the hidden warranties and defects of every car for the last couple of years. (Check out Saturn while you're there.) I also get a kick out of visiting www.blueovalnews.com. This is the Web site that Ford is in court with on a regular basis.
There are several concerns I have with the new Ford "Blue Oval Certified Dealer" Program (Lincoln Premier Experience)...a customer satisfaction and operating standards program, which is supposedly modeled after the Daimler-Chrysler Five Star Program. Once again I ask, is the factory shifting blame for its declining customer satisfaction to the dealers?
Tell me it's not so. Someone told me that J.D. Power and Associates created the concept and is going to be hired by Ford to inspect the dealerships and somehow regulate compliance with the alleged standards.
I will make a real quick prediction here-right off the top of my head-it's going to take about three months of this crap before dealers start to stage a full-scale revolution. There will be some attorney-rattling and loud noises.
J.D. Power and Associates, excuse me if I regurgitate. Is there a dealer out there who doesn't have their number? In the immortal last words of John Dillinger- "I smell a set-up!"
It's like Jason fighting the Hydra-you cut off one head and this monster grows 10 more. They just don't back off, do they? Are they really saying that they will redistribute the profits to dealers that floorplan with the factory and that sell factory service contracts and use factory training? (Factory training is an oxymoron.) Are they going to hold the dealers to the same standards and procedures that have put their Auto Collection Dealerships in the toilet?
Those of you who believe in the integrity of the manufacturers are the same people who bet that "Mr. T" would win the rematch in the movie Rocky II.
In my last article you may remember that I said that Daimler Chrysler has entered a new era that I will call "The Age of Constipation." Well, no sooner said than done. I read that those wacky Germans are going to discontinue the Cummins Diesel and start marketing Mercedes Diesels in Dodge trucks. To me, this is a contender as one of the most incredibly stupid miscalculations in retail automotive history. Dodge dealers are grabbing their heads with both hands and screaming. The Cummins Diesel is a winner-it's the transmissions, stupid. That engine is such a torque-monster that they didn't build the proper transmissions.
On the other hand, I have always admired Chrysler, so I will throw them a bone here. I have had an incredible idea. With Ford reintroducing the "retro-Thunderbird" why doesn't Chrysler reintroduce-are you ready-the "Hemi-Cuda Convertible." Talk about brand equity. Retro design it to look similar to the early seventies Cuda. It would outsell the PT Cruiser and the Prowler. What a great idea for the new Hemi.
Did you hear that Consumer Reports is now going to be publishing net invoice less holdback-they are going to be disclosing dealer cash back and stair step bonuses and all hidden moneys in the deal, directly to the consumers for 10 or 12 bucks, by phone or Internet.
Speaking of things that really suck-did you hear that NADA is going to start publishing dealer invoice on the new NADA Web site? OK-OK, I know everyone else is already doing it, but this is the NADA, they're supposed to be on our side. This does not sit well with me.
"And the walls came tumbling down." (Joshua at the Battle of Jericho circa 1000 B.C.) Well, there is a real war brewing, and this time I am supporting the manufacturers. The "Web Wars" are going to be hot this summer. I have been expecting this. Ann Doyle at Ford is making it clear that companies like Carsdirect.com and Carorder.com are e-brokers. Doyle was quoted as saying, "We wanted to remind dealers that it is a violation of their sales and service agreement to sell new vehicles to anybody except direct customers."
This is wonderful! I love it! It's about time that the manufacturers started pushing around somebody besides their own dealers. I support and applaud Ford and I hope they will kick these "Dot-Communist" butts all the way back to the holes they crawled out of.
Let's see if Ford has the guts to go all of the way here. Memos from Jim O'Conner seem to pointedly threaten that dealers who violate these franchise policies would lose their turn and earn credits-the ability to buy more dealerships-and Ford would charge back all incentives when brokered sales were involved.
There are rumblings that General Motors may make a similar muscle. They have already required dealers to pay back more than $200,000 of incentive money they had already collected on brokered sales.
Of course, Autobytel.com has indicated they would like to be in the arena of direct sales. I believe they referred to it as a "Dealerless Transaction." This might jerk a knot in their tail.
Mark Lorimer, Autobytel.com's President and CEO, issued several quotes in press releases that indicated he was proud of their progress in that they only lost $.43 to $.45 a share last quarter, beating "Street Estimates" of $.48 a share loss. Of course, with AutoByTel stock currently in the toilet at 678ths a share down from 44 a share a year ago, I assume Wall Street isn't swallowing the Snake Oil.
Before year-end we will see the battle move into the courts and the legislatures in a First Amendment Battle. I still want to see the factories go after the "Storefront Brokers" who are setting up sham dealerships with no facilities or service to pirate sales from legitimate dealers who have made an investment in their customers. I would like to see the factories go back to requiring that the customers have their cars serviced at the selling dealership if the breakdown occurs within 25 miles of home.
Where is Superman when you need him anyway? How the heck should I know? I'm just a dealer advocate and a columnist fighting for Truth, Justice and the American Way.
More Food For Thought
Wow! Arizona just passed a franchise law with teeth in it. I have been talking with several of the architects of this law for months now. I was sworn to secrecy and I kept my word. As a matter of fact, there are parts of the finished product that are trademark Ziegler. I was privileged to have some input that was incorporated into the final content.
This law limits the factories' ability to redistribute Internet referrals unfairly or disproportionately. Dealers must get factory leads from all inquiries that live in their sales areas.
The law also severely limits the factories' ability to fix prices or limit dealers' profitability. And it requires factories to fairly and evenly distribute inventory and "hot sellers." This law is the premier dealer franchise protection legislation in the country. It is good for the dealer and for the consumer.
I could write an entire article about how insightful this legislation is. I hope your dealer associations have not for a moment let their guards down. The battle is still raging-Ford is still in court in Texas to overturn state franchise laws-and Ford and General Motors still have factory stores and other dealerships operated by factory puppets.
Peter Brown, of Automotive News, recently speculated at the possibility of a Toyota-General Motors merger-the "Mother of all Mergers" so-to-speak. Well, I gotta say-I am seeing the same movement that he is. There is a lot of fire somewhere under that smoke and it may not be as farfetched as it sounds on the surface. Toyota would be the perfect "Poison Pill" to stave off a hostile takeover of GM. General Motors is ripe for a raid, with weak management, erratic policies, and repeated failed marketing plans (marketing Czar). The Hughes division alone is a plum.
Jim Ziegler is President of Ziegler Supersystems, Inc. jziegler@dealeronline.com
