‘My Customers Fascinate Me’

Mega-dealer Jack Fitzgerald, 76, owns Fitzgerald Auto Malls, a multi-franchise group based in the Washington D.C. area and with 12 stores in Maryland, Pennsylvania and Florida.

A 54-year veteran of auto retailing, he and fellow dealers Tammy Darvish and Alan Spitzer last year formed a group, Committee to Restore Dealer Rights, to fight nationwide franchise terminations by General Motors Co. and Chrysler Group LLC.

Fitzgerald is considered something of a dealer folk hero because of his years in the business, keen intellect, sharp wit and advocacy for dealer rights. His latest cause is a plan that would replace the federal estate tax with something he deems more equitable. (See sidebar)

He has pioneered a customer-friendly car-buying process that shuns price negotiations. He also is in the forefront of the “green” car movement, hosting environmental events at his dealerships.

Self-effacingly, he claims he hasn't mastered the modern communication tools, such as email.

But Darvish sets the record straight: “He does know how to use a computer — and he can fly a plane.”

Ward's interviewed Fitzgerald on a variety of industry topics. Here's an edited version of that conversation.

Ward's: What one sign are you waiting for before you declare the U.S. auto industry ready to rock again?

Fitzgerald: The resolution of the housing crisis. That's the main problem.

Ward's: More than unemployment and tight credit?

Jack Fitzgerald.

Fitzgerald: Yes. The housing crisis is driving all the stress. People who see their home values decline feel poorer, so they spend less money. The whole process has been socked by the housing situation.

Ward's: How would you describe current relations between dealers and auto makers?

Fitzgerald: As long as this business remains competitive — and it's extremely competitive — there will be tension. Auto makers want money and they turn to dealers to provide it, so there will always be some tension and yet cooperation between the two groups.

The stress comes from the competition and the competition comes from everyone wanting to be in the U.S. market.

Ward's: What's new with the dealer-rights group you co-founded?

Fitzgerald: Well, it's still around. It hasn't gone out of business.

Ward's: But is it active?

Fitzgerald: We haven't done anything with it lately. But manufacturers have a lot of power, they really do. It's like being in a stall with a horse. If you are not nimble, you could get stepped on.

Ward's: What's the most interesting part of your job?

Fitzgerald: My customers fascinate me. There are so many different kinds of people. My associates (employees) are interesting, too. We're very multi-cultural. Twenty-seven different languages are spoken at our stores. That's amazing, considering the world has only 164 languages that I'm aware of.

Ward's: What car are you driving right now?

Fitzgerald: A Toyota Prius (specially adapted) plug-in, Volkswagen Phaeton and Subaru Legacy.

Ward's: What auto makers seem to really have their acts together?

Fitzgerald: Everybody is talking about Ford resurrecting itself. It is hard to argue with the success of Toyota and Honda and smaller Japanese companies, such as Subaru and Mazda. GM appears to be coming back. Chrysler may be, but I haven't seen a lot of product yet.

Ward's: If you couldn't work in the auto industry, what would you be doing?

Fitzgerald: I'd probably be dead.

Ward's: You've been selling cars since when?

Fitzgerald: 1956.

Ward's: What got you into the business?

Fitzgerald: I was a moderately successful door-to-door salesman. I started out selling home fire alarms. I went to a dealership, Handley Ford in Washington DC, to buy a car. It struck me that you could see a lot more customers working at a dealership where they came to you instead of you going to them. So I hired on as a car salesman.

Ward's: Where did you grow up?

Fitzgerald: I was born on North Capital Street in Washington.

Ward's: What did your dad do for a living?

Fitzgerald: He drove a milk truck for a dairy group. Then he went to night school and got a degree in accounting. He became the sales manager of the dairy group.

Ward's: How did you transition from salesman to dealer?

Fitzgerald: In 1966 I became a sales manager in a start-up Ford store. I got a lot of experience really fast. It was a relatively big store, we had two 50 ft.-wide trailers rather than one.

Ward's: How did you become a megadealer?

Fitzgerald: I don't know if I am a megadealer, yet.

Ward's: How'd you get started as a dealer?

Fitzgerald: What happened is I didn't like commuting around the Washington Beltway. While driving, I noticed a dealership that was closed. It was a tiny beat-up Dodge store on a gravel lot in Bethesda, MD. I knew I could make a go of it because at the time Consumer Reports recommended everything the Dodge Div. sold. But there was a problem.

Ward's: What was the problem?

Fitzgerald: Chrysler didn't want to give me a franchise. It said I didn't have enough business experience. So I got a partner, Bob Dowd, who owned a string of appliance stores. I knew how to make money but I didn't know how to run a business at the time. Bob helped on the business end. By 1971, we had three dealerships. But then he died.

Ward's: Is that original store still around?

Fitzgerald: It is now the site of a high-rise building in downtown Bethesda. I agreed to relocate it at Chrysler's request. At the time I wanted to buy a Nissan dealership — Datsun back then — but Chrysler discouraged that. They thought I would get distracted.

Ward's: Your stores became the first in America to become Green Power Partners with the Environmental Protection Agency. You also hosted an exclusive Alternative Fuel Vehicle Expo that showcased more than 20 of the latest and upcoming alternative-fuel vehicles. How'd you get so involved in that?

Fitzgerald: My customers are interested in it, so I'm interested in it. I reflect my customers. We became installers for A123 Systems (a lithium-ion battery firm), converting Toyota Priuses into plug-in hybrids. We've done 50 or 60. They work fine. We've done conversions for Senator John Kerry and U.S. Senator Lamar Alexander of Tennesee.

Ward's: Your dealership has won accolades from consumer groups for posting on the web not only the manufacturer's recommended retail price but also the dealer selling price and the factory invoice price. What inspired that transparency?

Fitzgerald: I'm older, I go back to a time when dealers did think the customer is right. I put the invoice prices on our website so sales people will know it is right. It prevents situations in which a salesperson gives the customer the wrong invoice price. Some dealers don't realize some sales people do these things. I know because I was a salesman, but a lot of dealers today never have been car salesmen. They think they know how it works, but they really don't.

It's scary when you think of trial attorneys lurking around, trying to catch a dealership doing something wrong. Our complete pricing is transparent and accurate but it's also a defense.

Ward's: Some auto makers gave you flak for posting all three prices, right?

Fitzgerald: Yes. But dealers should be responsive to customers. They should put the customer first, not the factory.

Ward's: Your dealerships are 1-price, no-haggle operations. How'd that come about?

Fitzgerald: In 1979-1980, a fellow named Denny Doyle went around doing tent sales at a central location for dealers. Back then, it was just about the only way to sell Chryslers. To be part of the tent sale, a dealer had to agree to put a rock-bottom price on the car, and that was the price, that was what you took. I spent a lot of time at those sales and I saw how that type of pricing affected customers.

Ward's: How did it affect them?

Fitzgerald: They seemed comfortable with it. And it saved a lot of time. I thought, “Why don't we do it?” Some sales managers initially resisted it because they thought it would put them out of business, which it didn't. A salesperson can spend a lot of time talking to customers about why they should buy from you. I'd rather see sales people doing that then haggling over the price.

One-price works for us. The last year I lost money was in 1979. I've had months since then when I've lost money, but not years.

Ward's: Used cars once carried a stigma, and now they are wildly popular, with the pre-owned business attracting some of the best brains in the business. What happened?

Fitzgerald: I don't agree with the “stigma” idea. In one respect, used cars got a bad rap in the 1950s because banks would charge premium rates to finance them.

A difference between then and now is that today's used cars last twice as long. They are a heck of a lot more expensive though. But they are a good value because they last so long. And CPO (auto makers' certified pre-owned programs) are great enablers.

You can make a lot of money on a real used car, one that's five years old and has 100,000 miles on it. You fix it up and tell the customer what you did. That's easy. Even I can do that.

Ward's: How important are used cars to your operation?

Fitzgerald: They have always been important. Six years ago, we saw a trend coming for increased used-car sales. We now sell almost as many used as new. We are doing a better job at selling used cars.

Ward's: How many new and used cars did you deliver last year?

Fitzgerald: We sold 11,388 new and 8,802 used. We used to sell about 15,000 new and 5,000 used.

Ward's: Will the Internet become the way to sell cars or just another way?

Fitzgerald: It's a pretty important way and it has been for some time. People gather information on the Internet. They are better informed and easier to deal with, unless you are trying to pull something on them.

Ward's: You have dealerships in Maryland, Florida and Pennsylvania. What are those markets like?

Fitzgerald: There are differences, but a lot of our customers are affluent with high income levels, especially in Bethesda. They are smart and easier to deal with. They want what they want, and they are willing to pay for it. Our process is geared towards a clientele that is knowledgeable and busy and wants fast answers and fast service. And we give that to them. We get along well.

Car dealers should be close to consumers. We're not the manufacturers. It's our job to take care of customers. Some manufacturers hide behind their dealers. I have an attitude about treating customers fairly. It doesn't mean that manufacturers can do whatever they want.

Ward's: What do you do to relax?

Fitzgerald: I'm relaxing right now talking to you, even though I have a pile of work in front of me.

Ward's: Then you will be happy to know that was the second to the last question.

Fitzgerald: What's the last question?

Ward's: Have you made any New Year's resolutions?

Fitzgerald: I resolve to do a better job on my diet.

Ward's: Any business resolutions?

Fitzgerald: No, I work on my business every day. You don't wait a year to resolve to do something that needs to be done. You do it now. Someone once told me: “As long as you are green, you grow. When you think you're ripe, you're rotten.” It's good advice. It means always being receptive to new ideas.