Dose of Realism

I'm generally a positive kind of guy. I'm not keen on writing negative stories or playing what we in the media refer to as a game of gotcha journalism.

Unfortunately, there is a lack of positive, feel-good subject matters to write about. Sometimes, the media gets blamed for spreading the negativity.

In the last few weeks, a vice president at one of the Detroit Three implied somewhat strongly that the media was contributing to the general consumer malaise by writing only negative stories.

Add to that the dealer who told us that if the media would stop writing stories saying we were in a recession, people would never know we were in one.

Enough of my whining. The fact is, we need to be positive and remain engaged with our businesses and not let the bad things beat us down.

But we have to be realistic. I don't care how positive you are, the industry is arduous and will continue to be so, whether you are a dealer, a vendor, a manufacturer — or a journalist. Things are happening that are beyond our control.

If you think I'm wrong, I've got a few Chrysler dealers you may want to talk to. A dealer I respect greatly told me he laid off 55 employees last week.

It's a trite term, but the old rules don't apply anymore. We need to be ready to adapt our behavior and our thinking. We need to be quick on our feet, knowledgeable about industry trends and what they mean and ready to change direction immediately.

Predicting the future is next to impossible right now. Sales projections for 2009 are all over the map ranging from 9 million to 13.4 million. Take your pick.

On the used car side, experts who know their stuff can't agree what the next couple of months will bring.

The funny thing is, the more cars you sell, the deeper the hole you could be digging. I recently heard of a high-line import dealer saying he was selling himself into bankruptcy. His manufacturer is deferring the holdback money it owes its dealers. This dealer now is paying for those sales out of his own pocket, which is impacting his cash flow — and not in a good way.

Does he keep selling or does he pull back for a while?

In last month's magazine, I wrote how dealers may need to sacrifice gross profit on their used car sales for the next couple of months and focus on generating as much cash flow as possible.

At the risk of sounding pollyannish, these are the times that create new leaders and new ways of thinking and acting. In five years, this will be a better and stronger industry.

As tough as times might be, this could be an exciting period for your business. Be creative and try new things. But don't forget to maintain a dose of realism. Be willing to make the tough call, and make it quickly.