As
I sit here putting these thoughts to paper, I am
shaking my head and laughing at the very thought that
I once thought that song was deep and profound. It’s
just a stupid hippie drug song by Jefferson Airplane
about chaos and confusion.
The
reason I chose this flashback to open this article is
because it closely parallels recent current events in
the retail automobile industry.
I
look at some of the incredibly asinine things that
some of the factories and the public corporations are
doing and I have to ask myself… "Are these
people on drugs?"
Last
week (April 23rd) an article appeared in
USA Today with headline "GM Managers Blamed In
Strikes" by Micheline Maynard.
The
article quoted General Motors Vice chairman, Harry
Pearce, as saying that last years’ devastating
strikes at General Motors were General Motors’
Management fault and should not have happened. (Duh!)
If
you have kept up with this column, you know that I
speculated, at the time, that there just may have been
a possibility that someone at General Motors may have
deliberately picked a fight with the union and
provoked the strike to cover up the fact that their
market share was already in the toilet. The strike
became a convenient excuse for loss of market share.
After all, we wouldn’t want it to look like anybody
was a moron or something.
Is
it just me…or is anyone else out there scratching
your heads and wondering if Ron Zarella has the
photographs? Zarella is the Marketing Czar of General
Motors right?
In
reference to GM Chief Executive, Jack Smith (and
rumors about his resignation) Harry Pearce told the
reporter that speculation that Smith is burned out and
ready to step aside is "Absolute Baloney".
My
question of course is what prompted the reporter to
ask that question in the first place.
"When
men on the chessboard
Get
up and tell you where to go…
And
you’ve just had some kind of mushroom
And
your mind is moving low…
Go
ask Alice…I think she’ll know."
Mr.
Nice Guy…No
sooner do I write a nice, positive comment or two
about Daimler-Chrysler than I start receiving letters
from angry Mercedes dealers about the fact that
Mercedes recently cut dealer’s profit margins
severely and they are encouraging the dealers to try
"No Negotiation" selling.
Just
when you thought things in this business couldn’t
get any more screwed up, there go those lovable, wacky
Germans, seemingly double-crossing their loyal
dealers? Rumor has it that BMW immediately raised the
profit margins to their dealers so they can be more
competitive in negotiations and put more in the
trades, etc. I was told that some Chicago area
Mercedes dealers are hiring attorneys to create an
"Alternative Dealer Council"… allegedly
because they don’t trust the factory designees.
Speaking
of Alice in Wonderland…I
am sure you’ve read that Austin Ligon, president of
CarMax, has announced that Las Angeles CarMax openings
will be delayed well into the year 2000.
Of
course, as of this afternoon, CarMax stock is still
just slightly over four dollars a share…recently
dipping down into the high three’s. (in the toilet)
Personally,
CarMax is one my favorite jokes. These people have
stacked up monumental losses and it seems like they
continue to lose same store sales quarter after
quarter. They still issue these tacky press releases
describing themselves as the new way to buy a car.
Excuse
me Austin…It appears to me that your model has
crashed. That your concept doesn’t work. Your stock
is in the toilet. Your sales are in retro.
My
question for Austin Ligon is…Number one…"How
do I get a job like that?" and number two…
"Do you, by any chance, have any aspirations of
becoming the Marketing Czar of General Motors?"
(You do appear to have all of the right qualities.)
My
son Zachary and I, along with more than 100 volunteer
Chrysler dealers are still waiting for the day when
CarMax lots become big outdoor skateboard emporiums.
Looking forward to skateboarding across all of that
empty asphalt at CarMax in Norcross.
Newsflash!
Cadillac division has announced that they plan to
market a new generation of rear wheel drive luxury
cars. The general manager of Cadillac division was
quoted as saying that "Among the more
discriminating consumers there is a conscious
preference for rear wheel drive." Excuse
folks…didn’t I write that in this column over a
year ago? How many years in a row did Mercedes, BMW,
and the Lincoln Town Car have to hammer them before
the lights went off? This is an extremely smart move
at General Motors. (Did I say that?)
Now
maybe someone at Ford will finally do the smart thing
and discontinue the front wheel drive Continental. I
don’t see how you guys can give one of those pigs
away.
"When
logic and proportion
Have
fallen sloppy dead
And
the White Knight is talking backwards
And
the Red Queen’s "Off with her head!"
Remember
what the Dormouse said…
Feed
your head."
"Eight
Million Dollars"? The
bloodbath continues in Tulsa.
The
latest news is that the Tulsa Auto Collection is
asking Ford and the five investing dealers to cough up
eight million dollars.
Excuse
me for asking but didn’t you guys start out with a
fifty million dollar capitalization?
Weren’t
all of those dealerships profitable before Ford Motor
Company started tampering with the retail process and
put in that goofy "No-Haggle" nonsense?
Ross
Roberts recently told Texas Ford dealers that…
"In the past we (Ford) have not demonstrated that
we know how to run a retail operation"
Does
this guy honestly want you to believe they’ve got it
figured out now? Unfortunately, I suspect that Don
Thornton, (who, as of the time I am writing this
article, is in charge of the Tulsa Auto Collection )
is going to be the scapegoat for this debacle. I know
Don Thornton. I consider him to be a good dealer and a
personal friend. He’s been a good dealer and a
profitable operator for years. I would certainly hate
to think that they would hang his good name out to dry
because he couldn’t make this goofy concept fly.
One
thing Ross Roberts did say to the Texas Ford dealers
when he was appealing to them to support legislative
change in favor of Factory Ownership in Texas was…Get
This!… "We are not saying they need
to be One-Price. We are saying they need to be
No-Hassle. We did go out for One-Price in the
beginning. That is not the case today. Dealers in the
market make the decision."
This
is the first time that I am aware that Ford or the
Auto Collections have backed off of One-Price.
You
know, it’s one o’clock in the morning as I sit
here in a hotel room in Chicago pounding on this
laptop; I just realized that maybe…just maybe…that
song does have mystical secret meanings imbedded in
the lyrics.
Swirling
a snifter of cognac in front of the lamp in front of
me creates amber psychedelic patterns on the wall.
Where’s my beads? I am having a flashback here.
Maybe Grace Slick was a visionary back in the sixties.
Could she have been looking into the future when she
wrote that song?
When
I get home I am going to dust off that old album and
play that song a couple times. Just sitting here
humming the tune it conjures up mind-altering images
of Austin Ligon…and Ross Roberts…and, of course,
Ron Zarella.
Until
next time… "Peace".
.
The state of California is investigating the
relationship between Wes Rydell and General Motors in
that state to be sure they are not violating state
laws. What they are looking for is whether or not
Rydell is a legitimate dealer or whether he is
actually a front for factory ownership in violation of
California law. As I understand it…The questions are
whether or not he is at risk…or whether or not
General Motors has guaranteed to return his initial
investment if the deal fails.
By
the way…I think I can guess the correct answer to
that question.
This
story is big news and deserves to be covered in the
news. It was covered in the industry fishwraps…after
a fashion. One of the largest publications in the
industry featured this hot story in the very back of
their issue…three pages before the back
cover…after the classifieds. This article was buried
so deep it is a wonder anyone saw it.
I
have always contended that there are certain,
so-called news publications in our industry that bury
any derogatory articles about the factories so deep
into their issues that they will never be seen.
John
Elway AutoNation…Well
the numbers are in and AutoNation has had spectacular
success in the Denver market.
According
to them anyway. They certainly have sold a lot of
cars, I’ll give them that alright…BUT…I
have to ask…How much money did the corporation have
to pump into that deal from external sources to sell
how many cars? By the way, I know the answer to that
question and I am not impressed.
Anybody
with as much spare cash as they have laying around can
sell cars at a loss and play "Hide the
Weenie" with the accounting.
At
just slightly over fourteen dollars a share…It
appears Wall Street isn’t fooled either.
They
need to prove that they can operate "Heads
Up" against traditional competition without
cheating or deliberately losing money…without trick
financing or bogus residuals on leases that hide
losses until a future date. Then I will admit that
goofy concept works (which it doesn’t). I am so sick
of hearing their numbers expressed as
"Revenues". I want to see legitimate
profitability increases.