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Dealer Defender December 2011

Sucker Punch

When I arrived in Atlanta in 1982 with my mattresses tied to the roof of my 'buy here- pay here car', you might say I was 'street tough' and 'world wise'... certainly not the warm and fuzzy, cuddly, kinder gentler Ziegler you've all grown to know and love. I used to say we couldn't have a class reunion till all of my friends got out of prison.

 

If I hadn't met Debbie, you wouldn't be reading this today. my life would have taken a different path.

 

Two years earlier I was a participant in The Battle of the Toughest which evolved into the UFC. Of course, I have to admit I lost... totally knocked out unconscious in 45 seconds of the first round... BUT, you know, there were 25,000 people in the Jacksonville Coliseum that night... only twenty of us were in the ring. In real life how many spectators criticize the gladiators?

 

Later that evening I was in a nightclub sort of celebrating with some of the car salesman I worked with who had supported me and chipped in for my training supplies. A lot of back slapping, laughing, and conversations about what I should have done (from spectators) ...and jokes about how to film a 45 second Ziegler fight.

 

Right in the middle of this warm gathering of friends some "Jackwagon" walks up to me...never seen him before...and this idiot says to me...

 

"Saw you fight tonight, you ain't worth a damn" ... I WON THAT FIGHT.

You see, Jacksonville is not necessarily the most gentile place to grow up... especially on the west side. Rusting cars and smoke-filled bars... there was definitely another Ziegler before you knew me.

One thing I knew from vast experience about bar-fighting is...

 

"Once you know it's going to happen, don't stand there and hold a conversation"

How many times have I seen some fool standing there making a speech about what he's going to do to me? While he's still talking trash I've already ended this conversation while he's still in mid-sentence.

 

Some time when I've had a few, ask me to tell you some stories about back in the day. I promise you'll laugh.

 

True Car

Just exactly what was this guy, Scott Painter, thinking? He holds interviews with everyone who will give him a little ink or shove a camera in his face...and he pompously brags about how he's going to disassemble the retail car business, commoditize the product, and tells dealers to get rid of other vendors...his company goes rooting around in your DMS gathering your customer data...which he's already announced (sort of) he's going to use to put you out of business...

 

This man and his company are all about destroying your dealerships and replacing it with his own warehouse brand.

 

AND, part of the plan is to put all of the other vendors out-of-business. Control the used car prices and control the financing. I believe this from all of the signs we're seeing...

 

Then, somehow, he raises another $200 million and gets Mike Maroone, president of AutoNation, on the board of directors... AM I the only one who thinks something stinks here? He brags about how many companies he's started... I'm thinking... "Couldn't Hold a job Big Guy?" 

 

We all know you were sort of gone from Cars Direct with a little walk-way pocket change money... they marched you out with a little kazoo music, didn't they? Maybe that's a little too harsh and perhaps incorrect... I'll research some more and see if that's correct.

 

People think I have an ego? (whatever gave them that impression?)

 

This guy appears to me to be mega-deluded on steroids... at least that's the impression I get. What do you think?

 

I think that he thinks he's a visionary. I think he's a jerk. He speaks with such authority about how he's going to change the business model of the retail automobile business and bring everybody down that isn't him.

 

OKAY...Here's the bar fight analogy... This guy Painter, so full of himself, he's standing there telling us everything he's going to do to us AND doesn't realize that we're not going to take it.

 

While he's still talking, I'm thinking okay, now, let's take it down. BOOM.

 

There is a serious superiority complex happening somewhere here. 

 

NOW, all you stupid dealers and managers pay attention...I sincerely believe Mr. Painter is telling you what he plans to do to you...with your help of course... he can't destroy you without your help you know?

 

Truthfully, in my heart of hearts, I think he's a zealot with multiple hidden agendas to massage an ego that even I can't begin to compete with.

 

Can't explain exactly why BUT, the word "Twerp" keeps coming to mind.

 

I believe TrueCar and ZAG are the worst threat to the retail automobile dealer we've ever faced. Do not allow them access to your Data.

 

Please read my blogs on ADM Community and Dealer Elite and read what others are saying... These blogs have had 25,000 page views so far and still going...

 

http://www.automotivedigitalmarketing.com/profiles/blogs/true-car-and-zag-cyber-bandits-or-good-for-the-business? 

 

OR...

 

http://www.dealerelite.net/profiles/blogs/true-car-and-zag-cyber-bandits-or-good-for-the-car-business? 

 

I just got back from my last  trip of the year. Three million frequent flier miles with Delta Airlines... five million miles if you count the old miles before they began the program.  I'll be home with Wife and Zach and Puppy until the end of January after Internet Battle Plan.

 

Last week I was consulting and training in two Toyota Dealerships in two states, Indiana and New York.

 

I work with a lot of Toyota dealerships and this trip was different...

 

First of all they had inventory. There were cars on the ground. For the first time in seven months Toyota showed an increase in sales, North America, month over month...and it was noticeable in the dealerships.

 

When Toyota's well - the market's well. Attitudes were up.

 

U.S. light vehicle sales showed a sales spurt of a 14% increase as a result of Toyota (and somewhat Honda) returning to business as usual. Nissan was already back in the game. This is their best showing since 2009.

 

I've always said they never deserved the hardships they've endured.

 

Earthquakes, recalls, spontaneous acceleration, nuclear plant meltdowns, tsunamis, floods, recalls, more floods in Thailand... WTH?

 

The average Japanese executive might have done that thing in the garden with the knife.

 

Nissan recovered more quickly and came back to market faster than either Toyota or Honda... mostly because of the genius of Carlos Ghosn.

 

This guy with a better company and less corporate obstacles would be even more  incredible. He was on the scene, virtually the very day after...while his Japanese counterparts  at Toyota and Honda... and several Japanese others...still had their thumbs firmly placed in precarious wet dark places while they were debating what to do...Carlos was making decisions and directing traffic at the ground zero where it was all happening. This unusual little guy,  allegedly weird looking, Elvis Costello Mutant, wearing his hard hat and frame glasses was leading the team at the scene.

 

The Biggest Loser

What the Hell? Honda dropped from number four to seventh in the U.S. Market as Chrysler , Hyundai-Kia and Nissan moved ahead.

 

I won't beat a dead (dying) horse BUT Honda used to be an innovator...Now... afraid to step out there and take a chance with design, engineering, or content. They're building 'bland' cars when they had all of the breaks and opportunities to surge ahead...especially during the Toyota recalls.

 

We Don't Need This

I received a call last week from my friend Bernie Woodall at Thomson-Reuters news service.  Bernie was hot on a story about Chevy Volt...and spontaneous combustion. Unfortunately, I'd been on the road for four days...out-of-touch and wasn't aware of the story. Couldn't help him even though I love an opportunity to be quoted in national press. Reuters has quoted me dozens of times and I always try to feed them breaking news when I am on a story. Many national stories they broke began with a phone call from me.

 

General Motors, the new product is great... I just bought a new Buick Enclave and I am overwhelmed with the vehicle, quality, performance, and appearance. That's coming off of nine Escalades and seven Corvettes. (Still keeping my Vette)

 

I called some of my dealers in his behalf but information was scarce.

 

As best we can perceive a Chevy Volt... one mind you, burst into flames long after a side impact crash test,. Have I got that right?

 

NOW, Chevrolet's hope and prayer, The Volt, is recalled for spontaneous combustion after a side-impact collision in a crash test evidently caused a weld to break and the car flamed up weeks later.

 

Is this as serious? Truthfully I don't think so. BUT, will it derail the product's momentum? Without as doubt.

 

You see, as usual, General Motors has farted around with this vehicle, in and out of bankruptcy... we're going to build it... NO, we're not going to build it...

 

Excuse me Mr. Obama, oh, yes Sir we will build it. We'll build it immediately. After all the Obama administration is pressing manufacturers to put a million electric vehicles like the Volt on the road by 2015.

 

The Volt has been a major non-event to date with high development costs and  weak sales. Going into December with only 6000 units sold, far short of the 10,000 unit target...now this shadow hanging over them. If they are serious about selling 60,000 Volts in 2012, they need some serious PR right now.

 

Remember, Toyota is gearing up to sell a target of 400,000 Prius annual sales in the U.S. Market. Personally, I believe Toyota is going to spin off Prius as a separate brand in the foreseeable future. let's see how that plays on main street?

 

The Volt fix will cost GM less than a thousand dollars a unit protecting the battery and the circuitry. It's the reputation that's taking a hit more than substance.  After all, combined gasoline and electric power, the Volt gets a realistic 60 miles per gallon which is 10 miles a gallon better than the smaller Toyota Prius.

 

In spite of so many sales and marketing successes recently... profits and increases in market share (partially because of Japanese disasters) General Motors is doing some incredibly inept moves putting more emphasis on pressuring dealers facility uniformity than meaningful sales initiatives.

 

Last month I wrote about my visit to Dearborn where my friend, Jim Farley VP of Global Operations for Ford, gave me a private tour of the top-secret future product development and engineering labs deep in the bowels of the Ford complex. I actually had to swear and sign it in blood not to write about or reveal what I had seen.

 

I came away with a firm understanding that Lincoln is going to rapidly become a world-class contender in the Luxury Sector heads up with Mercedes, BMW, Audi and Lexus.

 

NOW here come Cadillac...

With the North American International Auto Show less than a month away look for Cadillac to come out with all guns blazing introducing entry-level luxury with their game radically 'stepped up'.

 

Mary Barra, senior VP of global development at GM says they're ready to roll out four new products including the Cadillac ATS.

 

The ATS, smaller than the CTS is aimed head up to compete with C Class Mercedes and the BMW 3 series.

 

Small Luxury is the most dominant section of the market...and, until now, General Motors has not been in the game.

 

I predict you'll see the Luxury segment of the market continue to shift downward...remember I said it first several years ago and now it's becoming more of a reality. The boomers and the generally affluent buyers are adjusting downward, did it myself recently. Still want the toys and the technology and feel of luxury, but at a smaller less ostentatious price and fit. Frugality might just be the new cool.

 

Nobody is doing this better than Hyundai and Kia. Beautiful design, quality and loaded with gadgetry...no wonder they're coming on.

 

Cadillac already introduced the full-sized STS at the L.A. Show last month causing many competitors to suck in a breath quickly lest they gasped out loud... Cadillac is coming on.

 

Mary Barra is a personality to watch, rising superstar, and certainly the most powerful female executive with stature and authority I've ever seen breaking through the glass ceiling amongst the good ole boy club at Renaissance Center.

 

Okay, so now, Cadillac... we've got the ATS, the CTS, the SRX, the STS, and the Escalade. Oh, almost forgot, they're rolling out something called the XTS too.

 

Lincoln's got the MKZ, the MKX, the MKS, the MKT (ugly-assed mistake of a car) , the Town Car (RIP) and the Navigator.

Watch for some fool to name a car the STD some day.

 

That's the only problem I'm seeing here. When Alan Mulally first came to Ford, one of the first things he did was rename the Ford 500 back to 'Taurus'. Ford Taurus at one time was the number one selling car in the world. Mulally did the right thing.

 

We need to stop trying to be the Germans.

 

American Cars have names, personalities and cubic inches, excuse me. All of those bullshit alpha-numeric names have no identity. I promise you the public does not know the different cars in the lineup at Lincoln.

 

Same thing with Cadillac with such great brand equity still in the closet. If I were in charge the names DeVille and El Dorado would be revived.

 

Here Comes the UAW...sort of

When I first got into the retail automobile business back in the 70's, there were more than a million and a half members in the UAW... and that was all automobile industry employees. They were the 800 lb. gorilla and the manufacturers trembled and bent heavily to their every demand.

 

Personally, I believe they are largely responsible for where our economy has gone, jobs exported overseas and the rise of foreign competition. 

 

Today they are limping around with only 377,000 members, and get this... only 115,000 of them work in the automobile industry. They've opened up UAW membership to casino workers, hotel workers, nurses and teachers. More than half of UAW membership is not in the car business.

 

The reason all of these other industries make up more than half of the UAW membership is to give them greater political leverage as a voting block to get concessions from politicians. Worked in 2008 didn't it?

 

Now, they are targeting international manufacturers building cars in the U.S. for unionization. Most likely Nissan plants in Tennessee and Mississippi are on the menu although they say they have not selected a target. Hyundai has already taken a defensive stance rallying their workers to reject  UAW advances.

 

Usually not something I write about BUT, as of late, the union has taken to the tactic of picketing dealerships and disrupting business by intimidating customers. Let's see where this goes...

 

Worst case scenario, more great jobs shipped down to Mexico.

 

End of an Era?

From the beginning we all knew it was going to be a short run as executives go. That doesn't make it any better or easier to lose one of the greatest in the history of the industry BUT, it appears Ford is looking for Alan Mulally's replacement.

 

His vision, personal charisma, and sound business decisions led Ford out of their darkest hour. He rolled the dice, all or nothing, and threw the ball into the end zone. I know Alan from several encounters and he always made me feel welcome and unguarded as some do.

 

The lengthy one-on-one conversation he and I had at the Greenbrier a couple of years ago is one of my best career memories.

 

On the short list, wouldn't be surprised if they didn't make a hard run on John Krafcik who is currently the CEO of Hyundai North American operations. Krafcik left Ford after 14 years to go with Hyundai back in 2004. His background is product development and he's exhibited great vision and marketing at Hyundai. So for Ford, bringing him across would serve several purposes... bringing on a great executive with proven leadership at the top position with an understanding of company culture and product development...who incidentally knows Hyundai's game plans. AND, taking away a key player who is hard to replace from Hyundai who is a little short on the bench.

 

The other two candidates form within are obviously Jim Farley and Mark Fields... both personal friends of mine and great leaders with distinctly different leadership qualities and complimentary expertise.

 

Personally, I don't feel any one of the three is a mistake... other names are popping up BUT, truthfully, these are the only three I'd bet on if it was my company and family legacy riding on it Bill.

 

I know what decision I'd make if it was down to these three...but, I'll keep that to myself.

 

Of course, Bill Ford and company spokes mannequins are categorically denying the wall Street journal story that started all of this... BUT I tend to believe it's in motion right now.

 

I am speaking again this coming year at the NADA Convention in Las Vegas. Back to my roots, I'll be presenting "20 Persuasive Ways to Sell F&I Products" Please come out and attend the convention and be sure to visit.

 

AND now, we have Internet Battle Plan VIII scheduled in Atlanta January 18th and 19th at the Buckhead Marriott.

 

Not only are we bringing on NEW SPEAKERS with New Content. Ziegler's vision is a reality. We wanted to produce a two-day event that would add a lot of value to our dealers and their management. Not the same old people that speak at all of the events But Rather; a  selected  handful of highly successful presenters, some still working in the business to give your internet sales a turbo-charged increase the day you return to the dealership. Real nuts-and-bolts, how-to-do-it; we're showing, in depth with detail,  exactly how to implement these techniques and processes in your dealership. Look  http://www.internetbattleplan.com

 

AND finally, I'm presenting at Brian Pasch's DMSC Boot Camp directly before the NADA Convention in Las Vegas. My subject, negotiating and working a car deal. Imagine that.  http://www.pcgdigitalmarketing.com/

 

As always, I continue to hold regularly scheduled Sales manager and F&I Manager schools here in Atlanta...the next two in February... http://www.ZieglerSeminars.com

 

Keep those emails and posts coming... ZieglerSS@aol.com

 

JIM

 

Comment

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Comment by Randy Holt on December 9, 2011 at 10:13am

All is awesome ... awesomer!

Comment by James A. Ziegler on December 9, 2011 at 10:12am

Randy, I am super excited to see you posting here... Hope all is great. JIM

Comment by Randy Holt on December 9, 2011 at 10:09am

Ha! First time (in a long time) that I've found enough value in an online piece to read the whole thing! Nice trick ... and merry Christmas!

Comment by Ralph Paglia on December 8, 2011 at 2:31pm
Comment by Brian Pasch on December 8, 2011 at 2:31pm

Jim

I look forward to having you speak at 2012 DMSC - attendees will get a strong ROI on their investment.  Tickets can be reserved at http://www.digitalmarketingstrategies.org and I suggest dealers act now before the event sells out. See you in Vegas!!

Comment by Aj Maida on December 8, 2011 at 12:50pm

I am totally guilty... I love my wife...

Hey Ralph...I think we need a like button!!!

Comment by Philip Moore on December 8, 2011 at 12:06pm

Totally agree with you on the naming debaucle.  I did consumer research for 8 years with CarMax and one of our biggest challenges was helping people search inventory.  People had to have pictures because the names meant nothing to them. 

At least the German naming conventions correspond to something and can be figured out (with a little effort); a 330 has a smaller engine than a 500, or 3-series vs 5-series etc.  Our site visitors had fits when the RX300 came out.  We had thousands of people who wanted that vehicle because they had seen one driving around, but they didn't know who made it or what it was called.  The problem was particularly pronounced for our newspaper ads.  Without pictures people had no clue on half the cars we were selling.

 

And congrats on your anniversary.  My wife and I are celebrating 25 years next June.

Comment by James A. Ziegler on December 8, 2011 at 11:15am

I am totally guilty... I love my wife...

Comment by Aj Maida on December 8, 2011 at 11:02am

You think you'll keep her???? Always said you were a smart man!!!!! Not that I'm prejudiced toward Debbie in any way??? Happy anniversary.

Comment by Pete Obuchon on December 8, 2011 at 10:51am

And I thought my followup was good! 

Comment by James Easter on December 8, 2011 at 10:51am

haha....good one Pete!  CONGRATS A.D. on the 27 years - that's awesome man!!

Comment by James A. Ziegler on December 8, 2011 at 10:49am

Yes, today, December 8th, is our 27th anniversary. Debbie was an "UP" when I was selling cars 29 years ago. I think I'll keep her. :)

Comment by James Easter on December 8, 2011 at 9:40am

Merry Christmas Jim & Deb!  Thanks for doing your part to create/continue the conversation about the TrueCar tyranny - much appreciated as always!

Comment by Pete Obuchon on December 8, 2011 at 9:28am

Great article as usual Jim! Keep the faith and have a Merry Christmas! (Yes, I sent Christmas cards to my customers and not holiday cards...if anyone is offended, I'll simply delete them from my mailing list!)

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