The Big Story: Car Dealers Stuck Paying Staff ‘Turnover Tax’

Some car dealers executed a brutal personnel policy in the post-World War II years when automobile production resumed and consumers flocked to dealerships to buy vehicles again.

Back then, at dealerships such as those on Livernois Ave., once a west-side Detroit auto row, any salesman (it was an all-male sales force back then) who posted the lowest monthly deliveries – even if it were a fairly respectable number – was fired.

If the dealership had 10 salesmen, and the tenth  staffer on the board sold one fewer car than the ninth guy, No.10 got axed. The dealership hired someone to replace him. It was a monthly fire-and-hire ritual based on survival of the fittest.

Although that practice was long ago abandoned, revolving-door employment still is a part of auto retailing. But it’s flipped. Sure, really lousy performers still are shown to the door. But many more times than not, when dealership employees leave today, it is of their own volition. Typically they resign to get a job at another dealership or in different line of work. And each year, hundreds of thousands of them do that.

It’s a costly situation for dealers who must routinely replace the departed.