I SOLD MY CHEVY DEALERSHIP TO MY SON SCOTT IN 1992 setting up a 15-year buy-out which has been beneficial for both of us. During my career as a dealer there were 38 Chevy stores in Greater Boston and new car prospects could shop our price using less than a pint of gasoline. Currently there are less than 15 in the same geographical area.
True, in the 70's Chevrolet had twice the market share it enjoys today, but it was a highly competitive market, and consequently dealers engaged in all sorts of high-pressure selling tactics. Volume was the watchword and factories pushed dealers for sales at any price. Computerized selling aids were still in their development stage and many new car deals were figured on the back of an envelope.
Warranty reimbursement was a constant battle between domestic dealers and their manufacturers. The current factory attitude of customer satisfaction and high product quality did not exist in the 60's and 70's. Domestic products required a lot of post-delivery warranty attention.
This, coupled with an arrogant defensive attitude from local factory reps, created a combative scenario which did not portend a positive, amicable solution. Dealer warranty audits were commonplace with thousands of dollars charged back to dealers for petty procedural errors.
Conversely, some unscrupulous dealers conducted phony private warranty campaigns tendering operations which were never performed, netting their service departments megabucks. Candidly, if factories didn't flush out these cheaters, legitimate claims would have been tarred with the same brush.
Things could get real rough.
Take the case of Frank Smith, a Chevrolet area service manager who was performing a routine warranty audit in a high volume dealership in Lowell, MA.
During the audit he discovered gargantuan warranty infractions and voiced his intention to alert the dealer (an absentee owner) and Chevrolet Div. of the situation. All of Mr. Smith's dealings were with the service manager, a man with an extensive criminal record. Subsequently, Frank Smith's body was found in a local river. The service manager was convicted of the murder.
This was certainly not a common occurrence. But it lends itself as an extreme example of the tense and adversarial atmosphere of the period. Borrowing a phrase from former President George Bush, the domestic automobile business was not "a gentler and kinder" environment at that time.
Today's dealers owe a profound debt of gratitude to the introduction of import manufacturers into the U.S. marketplace. They provided all dealers with a frame of reference for an improved relationship between themselves and their factories.
Prior to the 1979 oil embargo, Japanese importers cluttered U.S. ports of entry with unsold vehicles. When Iran closed the spigot on oil shipments, domestic auto manufacturers were unprepared for the manufacture of fuel efficient compact vehicles.
Conversely, Japanese production was expert in building fuel-efficient compact vehicles. They were perfect for a U.S. market where the term "gas guzzler" was construed as an unpatriotic label. Also, there was a ready-made network of domestic dealers who were enthusiastic about marketing fuel-efficient vehicles in an oil deprived marketplace. Additionally, another powerful message became apparent... Japanese quality!
Historically, the term "Made in Japan" meant shoddy product quality. Suddenly, Japanese vehicles were demonstrating better quality than their U.S. contemporaries.
The timing of this commitment to product quality was perfect for domestic dealers who had experienced poor product quality for decades.
Another significant effect on domestic dealers who signed up for import franchises was the cooperative attitude of the Japanese manufacturers towards their dealers. It was a major difference from their domestic franchisers.
Since my active participation in the dealership ceased and being a staunch advocate of "one cook in the kitchen" I launched a consulting career in family business, authored two books on family members succession (published by NADA with moderate success), and conducted several workshops at national and state conventions.
Recently, I paid a visit to the family Chevy, Isuzu and Daewoo dealership currently managed and soon to be totally owned by my son. It was unbelievable that the personality of the business had progressed to a height of professionalism from the stressful dealership I had operated in the 1960's and 1970's.
For instance:
* Employee turnover was almost non-existent
* Several managers and salesman's earnings were in 6 figures
* Customer satisfaction was almost perfect
* Warranty authorizations were adjudged by managers without waiting for factory approval.
* Used car managers were articulate and well mannered.
I was a difficult person to work for. I would micro-manage, constantly bugging people to perform. The dealership's current management is refreshingly modern. My visit to my son's Chevy store was an eye-opener.
