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Kiss Him Goodbye
Please close your eyes and join hands for just a few brief moments and join me in song as we remember the lasting contributions made to the retail automobile industry by Ron Zarella and Jacques Nasser.
Na-na na-na-na na na na na na na, hey hey hey, goodbye
---Hey hey-hey, goodbye
Na-na na-na-na na na na na na na, hey hey hey, goodbye
Na-na na-na-na na na na na na na, hey hey hey, goodbye
Na-na na-na-na na na na na na na, hey hey hey, goodbye
[Repeat many times and fade out]
Lyrics were taken from the hit song…Na Na Hey Hey (Kiss Him Goodbye)
Music and Lyrics by the group Steam (Gary DeCarlo, Dale Frashuer, and Paul Leka) 1969
Tears are streaming down my face as I picture 100,000 dealers, managers and industry executives joining hands, swaying side to side, and slowly singing that haunting refrain over and over again. Perhaps holding up 100,000 candles in the dark to honor these men whose names will forever be remembered as symbolic of an era in factory-dealer relations that we may never see again. Their companies and those of us in the industry will long remember their contributions to market share and profitability. Their legacy will be with us for many years.
Personally, I am eagerly looking forward to the day when we can translate those lyrics into German in honor of Daimler-Chrysler CEO Jüergen Schrempp, a man whose savvy market expertise and brilliant Aryan business plan is singly responsible for the incredible financial strides made by his corporation since the historic “Merger of Equals”.
All humor aside, I really thought it would feel better than this. The grim reality is that we have to pick up the pieces and put this industry back together again. For years I have been screaming out in issue after issue predicting exactly what we are now experiencing. In the September issue of this magazine I wrote an article titled “I Just Heard the Music” in which I predicted the eminent demise of both Jacques Nasser and Ron Zarella. Remember this article was written back in the beginning of August. One paragraph in the article mentioned the annual Ford Family meeting. Basically, this was when I believe the final decision to surgically remove Nasser happened. This is when the decision was made to bring in Nick Scheele and the new executive team. At the time I wrote… Two weeks ago we started hearing about the big shakeup at Ford. Of course now they’re downplaying it but I suspect our little Lebanese cigar-smoking buddy from down under is feeling some well-deserved heat. It really started about six weeks ago when the Ford family had one of their formal get-togethers.
In the same article I strongly alluded to the fact that Bob Lutz would move into the number one marketing position at GM and that Bill Ford would fire and replace Nasser.
Is it just my warped sense of humor or did anyone spew coffee through their nose while laughing uncontrollably when they read Rick Wagoner’s quote in Auto Snooze about Zarella… “Ron has been a very strong contributor at GM. He led an effective team that has transformed our sales and marketing and brought about a heightened awareness of brand value to the entire industry.”
Of course my quote might have been different had I been asked… “Under Ron’s leadership we have seen our market share dive deep into the toilet…to the very lowest levels, while our dealer-factory relations have deteriorated into distrust and hostilities.”
It’s Thanksgiving in Atlanta and I have just returned from our annual gathering of relatives and in-laws. In my case I think the in-laws look upon me as more of an outlaw. Nevertheless, I ate too much. After dinner we all sat around watching Green Bay at Detroit. What a thrilling game…with seconds left on the clock Detroit nearly pulled off an incredible 16-point, come from behind, deficit that would have tied the game and put them into overtime. Of course, (as usual) the Lions stalled on the final play losing the game at the goal line. I think they must have taken a few plays out of Ford’s game book.
As the zero APR bloodbaths continue into the New Year I can faintly hear the corporate ghost of Ron Zarella laughing in the background as he sticks it to the industry one last time. With the big two-and-one-half bleeding cash out of every artery, the beneficiary will be cash rich Toyota who has chosen to participate only on selected models, relying instead on the great quality and value of their products and their motivated dealer body.
General Motors started the ultimate interest rate war with the Keep America Rolling patriotic theme but in truth I suspect their real motivation is kicking Ford while they are reeling on the ropes financially. I read that the Nasser’s predictably allegedly stupid new age initiatives coupled with receding market share (opinion based on the fact that its true) blew though $20 billion in less than a year. Ford has taken repeated hits resulting from record recalls, lawsuits, Auto Collection (FRN) losses, failed Internet initiatives and the Firestone catastrophe. Collectively, bad corporate decisions, goofy initiatives, ill advised purchases of foreign companies, and gross mismanagement have left the company in the worst cash position in recent memory. Obviously the first recorded act of middle-eastern terrorism was directed at Ford Motor Company.
It will take Bill Ford and Nick Scheele years to dig out of the hole left by the Trotman and Nasser regimes. Unfortunately, some of these mistakes are still in motion and, like it or not, Ford is too financially committed to back out now. A predictable future train wreck will be the Premier Automotive Group under the leadership of Chairman Wolfgang (Nasser’s guy?) Reitzle. We’re essentially looking at the creation of a new brand…the new division sort of includes Lincoln, which has been seriously neglected in product development and design. The flawed concept envisions Jaguar, Aston Martin, Land Rover, and Volvo sold out of the same showrooms capitalizing on efficiencies of consolidation in manufacturing and management. Wolfgang Reitzle chooses to be headquartered in England far away from the engineering and cultural influences of Dearborn. This concept would have great appeal to clue-impaired bean counters and propeller heads BUT any retail guy (gal) would see obvious and transparent defects in the marketing scheme. First of all…all four brands are “Boutique” brands appealing to totally different niche segments of the market. Trying to combine and consolidate engineering and component sharing is asinine. These are not mainstream cars, even overseas. Jaguar has traditionally been a luxury car with a terrible reputation for staying in the shop. Aston Martin is an exotic sports car that brings to mind old James Bond movies, whereas Land Rover is a high-dollar SUV. There is a serious question as to whether or not any of these companies is currently profitable. The real queer bird in this bad recipe is Volvo. Ford reportedly paid $6.5 billion for it. That’s some serious Blue Sky considering the company has never made as more than $400 million in its best years. (Not lately) We’re talking about a car that has never sold a half million units annually. There hasn’t been a deal this bad since the Indians sold Manhattan for beads. How do you say idiots in Swedish? Excuse me; I was a manager at Dyer and Dyer Volvo when we were the number one Volvo dealer in the world. Volvo is not a luxury car…it’s a niche market car that appeals mostly to intellectual “Safety Geeks” in Birchenstocks. Of course that is just an opinion based on statistical facts.
Ford’s lack of vision and imagination is nowhere more apparent than in the Lincoln Town Car. They had momentum and they blew it when they downsized to the current model. It has all of the elegance, personality and appeal of a well-appointed Grand Marquis. Nothing about the car exudes luxury flair or a feeling of prestige. The Lincoln LS is another candle in the wind. If this car is supposed to be an effort to capture the younger affluent professional buyer, it only serves to spotlight just how far out of touch Ford is with the retail public.
I have repeatedly predicted that Chrysler Corporation will come home. Hot rumors from informed sources tell me that there is some sort of secret dialogue happening between Daimler-Chrysler and General Electric. (Remember I wrote this in November)
Drowning in an ocean of red ink, Daimler-Chrysler is posting losses approaching $3 Billion this year. According to every industry publication and statistical analysis I have seen, Chrysler will post less than a 13% market share in 2001 most likely dropping out of the big three as Toyota sales surge.
Regardless, whether its General Electric or some other unnamed buyer, all of the analysts seem to agree that Daimler needs cut its losses and dump Chrysler.
As profits swell, up 45% over last year, Honda Motor Company is about to blow it in North America. I predict we are about to see American Honda becoming aggressively involved in the retail process. Unless I miss my guess Honda Dealers are about to become extremely agitated. (Pissed off maybe) First of all this has been building up for nearly two years. Reportedly, Honda is not entirely satisfied with their dealers’ customer satisfaction ratings. Several dealers have been gracious enough to supply me with some documents that aroused my curiosity. Is it true that American Honda has entered into a business arrangement with AON Corporation to provide mandatory retail training programs and processes for their dealerships? According to informed rumor, the meeting when this was allegedly announced to their field personnel took place…oh let’s pick a date...howsabout November 19th. For those of you that aren’t aware, AON is a corporation based in Chicago and the president/CEO is Pat Ryan. Yup, that’s the one and the same Pat Ryan that sort of invented F&I thirty years ago. If the rumors are true…he-eee-eee’s back!
Now, I have also fallen onto some consumer surveys, which are currently being conducted, nationwide, for Acura that are asking a whole lot of Internet preference questions. I smell focus group driven processes at Honda and Acura being forced on their dealers. It appears to me that they are moving rapidly toward mandatory Internet initiatives when everyone else is retreating. The long and the short of it is that I am betting that we will see Honda start screwing around with a winning formula and, along the way, they will create some dealer-factory relations issues that will be extremely negative and detrimental. In other words, I suspect some misguided fools might be getting ready to assassinate the goose that laid the golden eggs.
The headlines say Nissan’s profitability is up 34% over last year. Carlos Ghosn is being hailed as the new messiah…dare I say it…a marketing tsar perhaps. Well, facts are facts and Nissan lost money seven out of the eight years previous to his arrival. The company will probably show a profit approaching $3 Billion this year. My feelings on that though are that anybody can cost cut their way into a profit once…maybe even twice…but I still want to see more substantial retail successes before I join in the applause. Let’s see some imaginative product and increased sales volume first.
Post Zarella GM is exploding with energy. True to form Bob Lutz is steering the company back to core competency. Over the last decade the corporation has been infected with non-car-people trying to reinvent the industry. We’ve seen bean counters and mean spirited marketing tsars becoming involved with distractions, which were disguised as opportunities. The mission is supposed to be to build quality cars and trucks and distribute them to your dealers…to support sales with advertising and promotion…to design exciting state-of-the-art product that sells. You need to start building cars the public wants to buy.
They say Lutz is giving the company back to the car people and turning them loose. The sooner he ferrets out all of cookie wholesalers, propeller heads, technology wizards and electric appliance moguls, the better. I noticed that GM is already starting to fold some of those goofy Internet projects. If Lutz is the straight shooter I think he is, I predict he’ll close the door on Saturn.
I heard some rumors and rumblings that GM may revive the Corvette Stingray. This could be an incredible opportunity provided they don’t waste all of that incredible “Brand Equity” that name carries with it. You’ve already thrown away some great names like Malibu, Impala SS, Caprice Classic and Monte Carlo by putting those names on unimaginative junk. I still don’t know how you managed to retire the Camaro and the Firebird/Trans Am nameplates. There is a huge market segment for that type of car. Rather than build a decent car, you kept producing outdated stale product that didn’t sell. It wasn’t a lack of demand that killed Camaro and Firebird…it was a lack of imagination and feel for the marketplace. The same people that killed Camaro and Firebird probably designed the Pontiac Aztek.
All in all, I see magic happening at GM. They appear to be making a sincere effort to repair factory-dealer relations. Maybe they’ll even decide to do the decent thing out in California and pull the plug on the Rydell project? It’s a sad day when a factory subsidizes and participates in what evidently equates to predatory pricing practices against their own loyal fully invested dealers.
It seems to me that Rick Wagoner and Bob Lutz have General Motors tracking a course that appears to be “True North”.
On the other hand…Bill Ford has his work cut out for him. If you’ve followed my articles, you know that I have been an advocate of a Ford family member taking the helm. The Automotive News headline read… Bill Ford’s Job 1: Mending Fences. Well, I’m just not sure if Ford is as sincere about change as they need to be. Jim O’Connor is Ford’s best ambassador…their best hope for repairing dealer relations, which are the worst in the industry...perhaps in the history of the industry. Your dealers don’t trust you and you’ve given them good reason.
In my opinion the policies of Nasser, Rewey, and Trotman were anti-dealer and totally despicable. But you know Bill; these men can’t be held totally accountable for the sad state of affairs you’re walking into. The question is…how in the world could the Ford Family and the Board stand by allowing this insanity to progress to these levels? You have to accept some of the responsibility.
I know Ford Dealers and I know Ford Customers…and frankly Ford Motor Company has lost touch with both of them. The best advice to Bill Ford is to get back to the basics that brought Ford Motor Company to the dance in the first place. Get back to the business of building great quality cars and trucks that have style and excitement. Return to the spirit that made this company great. Get out of all of your side businesses and get rid of distractions. Like General Motors, get the non-car-people out of the corporation. Stop interfering in the retail process.
You know everything seems to work out in the end. Compared often to the voice crying out in the wilderness, I have been screaming out in this column for the last seven years. I have always told you that these people would not prevail and these evil programs and schemes would pass. This column was never intended to be negative, it’s just that these people kept doing such rotten mean things to the dealers and they have genuinely damaged the industry. I could not just sit idly by and do nothing about it. Now, I sit here laughing out loud staring at the word processor in a dimly lit room. Swirling my Remy Martin Cognac and holding the snifter to the light. The music rolls around in my head. Did you know that Jacques Nasser’s severance package might go as high as $50 million? Only in America could someone’s policies almost totally destroy a multi-billion-dollar company and they still get to walk away with that kind of money huh? And then there’s an image of Bob Rewey flickering across my mind…I always thought Bob was the father of the Auto Collections. Personally, I never liked Bob Rewey even a little bit. I always thought of him as the anti-dealer guy. But, then my thoughts turn to Ron Zarella…that was the biggest mystery of them all. How did he keep that job in light of his performance? Evidently he even left on his own terms…in his own time…by his own choice. Maybe we’ll never know what really went down there. The net result is that he’s gone.
I believe that all of these passages were good for the industry. Nothing could have healed and nothing would have moved forward with these people still in charge.
Lightly under my breath humming and then softly whispering the words…
Na-na na-na-na na na na na na na, hey hey hey, goodbye
Na-na na-na-na na na na na na na, hey hey hey, goodbye
[Repeat many times and fade out]
More Food For Thought
More rumors based on some facts. I received several dozen phone calls and emails about it. It seems like there was this survey conducted by the NADA asking Ford Dealers their opinions about the Blue Oval Certification program. The story goes that the NADA approached Ford with the results (which most people assume were extremely negative) and that Ford threatened the NADA if the results were ever published. As of this writing the results still aren’t known.
Angry dealers wrote letters and made phone calls and posted comments on the message boards about it.
The truth of the matter is…I don’t care if the story is true or not. The real issue is that Ford Motor Company will never ever repair factory-dealer relations as long as that evil program exists. Everyone knows…Bill Ford knows…Jim O’Connor knows…the dealers know…everyone in the industry knows…I know…I repeat everyone knows that dealers hate the program. If Ford thinks they can keep telling the same old lie over and over again and it will somehow become true…then they are dreadfully deluded and clueless. It is blatant two-tiered pricing and it is an anti-dealer initiative that has nothing to do with customer satisfaction. If Ford Motor Company keeps telling everyone that their research shows that most dealers like the program; they will never be credible with the dealers who all know that isn’t true. If indeed their goal is to suppress the truth then there will never be trust or cooperation. They are already ratcheting up the program and decertifying some dealers. I predict that unless they dismantle the program and restore the one-percent to the invoice, which would be the decent thing to do…it will continue to erode dealer-factory relations and increase hostilities.
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