Quarter Mile in Twelve Flat
By Jim Ziegler
A hundred spectators lined both sides of the road that cold December night in 1968. Some people were sitting on their car hoods leaning back against their windshields while others stood around in small groups, shoulders shrugged with their hands in their coat pockets. You could see their breath rising above their heads in clouds of steam. There may have been some Budweiser present.
I was in the "Outlaw Lane" lining up against a '55 Chevy with a "Rat 302" engine. This was my second run that night. I had just blown by a 1968 SS Chevelle by more than two car-lengths in my previous run. A flashlight started the race and my tires smoked as the back end tried to come around, fishtailing wildly as I came spinning off the line...the posi-traction kicked in, the car straightened out and I was off the line...ahead by half a length.
Subtly reengineered by Stanley Mizell, the Jacksonville-based MoPar genius, my 1968 Dodge "Super Bee" was fast-real fast. As soon as our tires turned on that second race, more than a dozen patrol cars with flashing lights and sirens came streaming out of hiding. The police had been staking out the drag races, after me in particular, hiding in the city dump with their lights out. That dump access road was perfect for drag racing because it was a straight two-lane, almost a mile long, with no intersecting roads or cross traffic and it was isolated at 2:00 A.M.
Twenty-one years old, young and foolish, I thought that maybe...just maybe...I had a chance to outrun the patrol cars. Fourteen miles later, I was retired from drag racing forever.
Going to the strip on Saturday nights, I used to love watching Stanley Mizell run his world record breaking 426 Hemi "Cuda".
I was fired up when I read that Daimler-Chrysler is re-introducing the "Hemi". I have heard that the production version of the Chrysler 5.7 liter "Hemi-engine" concept car is going to be a real "Smoker." That's the magic and the imagination that we've been missing in the car business. Chrysler has the most imaginative engineering team in the car business today. I believe that one of the main reasons that Chrysler has captured major market share gains in recent years is because they are so far ahead and "out-of-the-box" with sheet metal design and performance innovation.
I have seen the new Thunderbird and I must admit that, finally, Ford has a real winner-provided they can put a performance engine in it. The car is going to be sensational. Ford is making some styling progress, even if they did have to borrow heavily from the past. My opinion, the new Taurus and the new Sable are not nearly as "butt-ugly" as their predecessors BUT they are still more of the same, a giant yawn. The Taurus has, once again, been redesigned to be nothing more than a program car.
On the other hand, General Motors will probably discontinue the Camaro, totaling abandoning that market segment...a stroke of incredible ineptitude in face of spectacular Mustang sales which proves that is a viable demographic.
In all fairness though, General Motors is coming out with some spectacular new product. I am actually considering buying one of the New Generation Cadillac Escalades or maybe, a new Suburban, myself. Remember, over the last twenty years, I have had seven new Town Cars, an Eddie Bauer Explorer and I am currently driving an Eddie Bauer Expedition. But now, for the first time, I am strongly considering buying a new GM product.
Saturn continues to excel at failure. I just read where Saturn is recalling another quarter million cars for yet another round of safety and quality related reasons. Why doesn't GM just shoot this horse and put it out of its misery?
Saturn LS and Chevrolet Malibu just took major crash test hits earning only a two-star rating (out of five) in side impact collision tests. Excuse me a second here. Are you dealers having as many problems with rebadged Opel products as I am hearing? I would appreciate some letters on Catera, Malibu, Saturn LS, and Cutlass quality. I drove a three year old Catera recently, supposedly a certified, reconditioned car...what a piece of...well never mind. I will just say it shook and rattled and sputtered. Engine noise, vibration and road noise were excessive. Maybe it was just that specific car but many dealers have told me that that is not uncommon with GM's Opel clones.
It is just one week after the NADA Convention in Orlando and I can't believe that I am sitting here writing this on Super Bowl Sunday. We are all iced-in here in Atlanta. It is two hours to kickoff and I have just broken the seal on a bottle of Remy-Martin vintage cognac.
There's a lot happening and I am going to try to give you my takes on everything that I am hearing and seeing. Remember, as always, this is all just my opinions and perceptions of events, people and places in the industry.
First of all, I am sure you've heard that Roy Roberts is retiring from General Motors. Roy can choose to tell people that he's retiring if that makes him feel good, but I am going to say that "cut and run" is a better description of what Roy's doing here. Just a guess, mind you, but is Ole Roy ducking out one step ahead of the proverbial axe?
Let me put on my turban and look into my crystal ball here for a moment-something's coming to me-yes, it's becoming clearer now-I don't know exactly what it means but the voice is saying, "Zarella's next!"
The NADA is strutting and taking bows over the announcement from General Motors chairman Jack Smith that General Motors will no longer pursue owning and operating dealerships, and that GM would no longer pursue lobbying state legislatures to overturn state franchise laws forbidding factory ownership of dealerships.
In similar statements, but more guarded and with conditional language, Jac Nasser and Jim O'Connor at Ford Motor Company finally said the words that Ford would NOT sell cars directly to the consumers over the Internet. Of course, I would feel better about the Ford showing "Good Faith" if they dropped their lawsuit against the Texas Department of Transportation.
Ford is now contending that they intend to use the Auto Collections as an experiment...a learning laboratory so-to-speak, according to Ford VP, Brian Kelley (who in no way resembles Opie Taylor of Mayberry). "Experiment?" Wasn't that the same double-talk they were spouting at the beginning of this fiasco before they blitzkrieged across the country buying up dealerships and taking legal action to defeat states' franchise laws? Didn't they just buyout Dick Strauss in Virginia? These people haven't let up for a moment.
Give me a break here. Ford has proved beyond a shadow of a doubt that these Auto Collections are miserable failures and that their retail strategies and 2000 initiatives don't work...totally rejected by the public. In Oklahoma City, the entire concept has fallen apart. They are advertising traditionally and separately, guaranteed lowest price negotiating, sometimes not even referring to the Auto Collection and they are doing business the way they used to before Ford's interference.
Jim Shroer, director of Global Marketing at Ford (who in no way resembles John Boy Walton) said naively that Ford is having a hard time convincing dealers that Ford seeks partnership, not diversity. No crap, Buttwheat! Imagine that. In psychology, rule number one states that past behavior is one's best indication of future performance. If Ford would stop trying to outmaneuver their dealers and overturn the franchise laws and stop meddling in the retail process-if they would just stop dicking around with their dealers, maybe they could rebuild some of that lost trust. Personally, I really like this guy O'Conner; he seems to be a straight shooter. I imagine that he is probably on the dealer's side, quite a contrast to Bob Rewey.
Despite all of the rumors floating around, I have verified that William Clay Ford did not "Body Slam" Jac Nasser and throw him over the ring ropes. Of course I never said that he did-I said "He Should Have."
I appreciate that the NADA was instrumental in the apparent progress we are seeing here-BUT-I sincerely hope that no one lets their guard down. Hold the applause and don't be too quick to be backslapping and celebrating. Let's wait and see what General Motors and Ford actually do in coming months? Actions do speak louder than words.
Even though Ron Zarella and Roy Roberts personally accepted responsibility for the morale problems and the rift with the dealers, I don't believe for a moment that Ron Zarella is sincerely penitent or that Roy Roberts became "warm and fuzzy" overnight. Read my article in the September 1999 issue of this magazine "The Frog and The Scorpion"(on my web site "http://www.ZieglerSupersystems.com" or at www.dealeronline.com) and remember this-the scorpion had to sting the frog, it was just his nature.
Those pesky "Dot-Communists" were all over the convention floor proclaiming the next big "Wave of the Future." Excuse me folks, slap some cold water on your face, now take a deep breath, now exhale and take a look around for just a moment here. I am on record as saying that so far the Internet has been a major non-event as far as car sales go. Let me quote myself-"The Internet to date has not generated the sale of even one additional unit."
Sure, you need to be on the Internet. No doubt in my mind that Internet sales are going to increase and you need to have a professional Business Development Center to handle all phone sales as well as Internet sales. Some of these vendors are actually doing a real service; you can't lump them all together, BUT, by next convention, many of them will be history.
Unfortunately, what is now happening is that we are inserting another level of vendors between the dealer retail customer. There is now another slice coming out of a dwindling pie. They're turning your retail buyers into low-profit fleet buyers and charging you for that privilege. I'd like to see Autobytel make a profit themselves before they continue to interfere with ours. Just how successful was Autobytel.com founder, Pete Ellis, in the retail car business before he founded Autobytel?
I just read where Autobytel.com is getting ready to start selling cars directly to consumers without using a dealer in the transaction. Let's be sure I got this right now. According to the New York Times, Autobytel plans to act as a car broker, selling cars directly to consumers in what they are calling "A dealerless transaction."
Now, I'm just a high school graduate from Jacksonville, Florida-let me see if I got this right? It sounds like a double-cross to me. The Autobytel propaganda machine claims to be responsible for somewhere around 45,000 to 50,000 sales monthly. Now, are they saying they are going to use that information, paid for by their dealer subscribers to solicit customers out of that database and compete with their own dealers?
First of all, I have a serious believability problem with the 45,000 to 50,000 sales a month figure...most Autobytel statistics are probably the figment of some alleged J.D. Power research. (We all know my opinions about that alleged J.D. Power research. If he were alive today, P.T. Barnum would have said there's a J.D. Power subscriber born every minute.).
Autobytel...remember, we're talking about a company whose stock has experienced freefall down from $58 a share to $12 3/8ths a share, in less than a year. Unless I am reading it wrong, Autobytel.com posted a $4.9 million-dollar loss in the fourth quarter on only $12.4 million-dollars of revenue. Let me look up that business model in my textbook here ... hmmm-mmmm... It referred me to "See...smoke and mirrors."
Prediction...even with General Electric buying in, don't waste a lot of your valuable brain cells storing the name Autobytel.com in your long-term memory. As the Fairy Godmother said to Cinderella "Poof!"
Speaking of "Poof"...How about them AutoNation Used Car Supercenters? Remember, I predicted three years ago that they would disintegrate within three years. In that July/August 1996 issue of this publication, I also wrote..."H. Wayne Huizenga had better stick to renting videos because he's about to get his ass kicked in this business." At the time I recognized the obvious absurdity of that goofy business plan and I said so repeatedly. Now, I have got to tell you...it's not over yet. I am sincerely looking for AutoNation to completely disintegrate and dismantle their operations and for all of their stores to be sold off within the next few years...I am going to predict two more agonizing and frustrating years for Huizenga and company. Their stock is in the toilet, already as low as $7.50 a share this month. Their business model is flying by the seat of their pants, changing daily, and AutoNation press releases feature more fantasy than the Brothers Grimm.
As for their strategy of building a "National Brand"...The brand name AutoNation is now AutoWay in Tampa and who knows what else...where else?
CarMax...at a buck and a half a share...CarMax president, Austin Ligon, is saying that CarMax has the winning plan and that they are working toward profitability... "Working toward profitability?" Did this guy grow up in "Doodyville USA" or what? What's he been smokin' here? After seven years, it might be reasonable to assume that a company should be profitable...right? After seven years they are just trying to break into the black for the first time. To quote Groucho Marx..."If we don't sell too many, we just might break even." At this rate, CarMax might be able to post a reasonably profitable month in say, maybe fifty or sixty years or so.
Well, it's almost time for game and my son, Zachary, is getting excited. I really need to get in there with my family. I think I've said enough for one issue. Pouring myself a snifter of cognac, I wonder if the Auto Trader has any old Dodge Super Bees for sale.
More Food For Thought
Is it just me and my street-tough cynical skepticism, or did a blurb in The Wall Street Journal last week carry the ominous tones that I read into it? The headline read "Car Makers May Try To Alter Prices."
The leadoff sentence stated that... "Major auto makers are weighing whether to ditch longtime pricing practices to follow the herd of online car-retailing services by posting invoice prices or "street prices."
Although not the only manufacturer alleged to be considering this, Ford Motor Company was specifically mentioned in the blurb that I saw.
Street prices are what consumers are actually paying for a car in the market...not MSRP. I smell another "factory rat" here. Are they getting poised to start interfering with the retail process again? If they start further reducing margins and price setting, the dealers will once again get screwed.
If Jim Shroer is wondering why the dealers are having a trust problem with the factory, I might have discovered a clue.
Jim Ziegler is President of Ziegler Supersystems, Inc. jziegler@dealeronline.com
