Small-Town Dealer Speaks Out

At age 80, Duane Schultz still goes to work every day at his Chrysler-Dodge-Jeep store across the street from a row of homes in this small southeastern Michigan town of Milan, population 4,500.

The dealership with a 2-vehicle showroom has served the area for 60 years. Schultz' father, Leland Schultz, opened Schultz Motors of Milan right after World War II. Included today among its 13 employees are Duane's sons, Tyler and Todd.

“We are a family business, through and through,” says their father. “I didn't go to college myself, coming out of the Navy in 1946 and then going to work for my dad.

“But my sons are graduates of Michigan State University and Western Michigan University, and I'm pleased as punch that they saw fit to join me here rather than do something else.”

One of Milan's biggest employers is a federal prison. A recent boost to the local economy came with the opening of a new automotive engine plant in the nearby city of Dundee.

“A lot of the Dundee workers have moved in to Milan,” says Schultz. “We're glad to have them. Milan had seven dealerships when I first started to work here. Now the only other one left handles Chevrolet, Buick and Pontiac. It's owned by an absentee dealer who lives up in Flint.”

Milan is half way between Ann Arbor, MI, and Toledo, OH, and Schultz says he draws customers from both cities.

The octogenarian says he runs his business “the old way.”

“We run no price advertising and never have,” he says. “We sell no flim-flam junk in F&I, mostly extended service contracts. We're considered part of the metropolitan Detroit market, but we'd never do the hustling they do in Detroit to close deals.”

A loyal customer once showed him the invoice for a $1,100 Plymouth coupe she bought from Schultz Motors in 1946, he recalls. “She's never driven anything but Chrysler products.”

Schultz Motors sold 24 new cars in May, which was a bit slow, Schultz admits.

“About half of our new vehicles are leased, all through Chrysler Financial Services,” he says. “That has become a welcome way of getting a new car in country towns and a source of off-lease cars for our used-car lot.”

Schultz, who once phoned then-Chrysler Corp. CEO Lee Iacocca to straighten out a stocking conflict with a “hard nose” zone manager, follows events at company headquarters in Auburn Hills, MI.

“I'm glad Cerberus (Capital Management LP) bought Chrysler,” he says. “I won't say the Germans at Mercedes set Chrysler back, but it is better that an American car maker is run by Americans. These Cerberus guys say they're committed to rebuilding Chrysler, and that's good news.”

Schultz recalls personally inviting Dieter Zetsche, at the time head of DaimlerChrysler AG's Chrysler Group, to “come visit us in Milan.” Zetsche, who went on to become DaimlerChrysler CEO before the breakup, promised he would visit, but that never materialized.

A Five Star dealer ever since that certification program began nearly 10 years ago, Schultz sounds a warning about recent issues involving the auto maker.

“I've seen a bunch of sales-bank pushes and dealer Alpha combination programs (Chrysler-Dodge-Jeep superstores under one roof) over the years from factory guys who think there are too many dealers.

“But we're carrying the mail for them in Milan, and so are dealers like us all over the country,” he says.

Son Todd Schultz, 55, the store's general manager, offers his perspective as a third-generation dealer.

“Auto makers neglect the realities of small-town dealers like Schultz Motors when they say they're over-dealered.

“In Milan, everyone knows our name and we know theirs,” says the younger Schultz. “We've been Chrysler's representative here for 60 years. We've never stopped being the neighborhood dealer. That's more important than all the talk about too many dealers or that we cost them too much.”

The auto maker has saved on dealer-support costs by stopping visits from district sales managers, he says. “The personal visits have been replaced by 800 numbers and e-mails.”

Todd Schultz disputes the notion that consolidating dealers in nearby communities would streamline operations.

“If Dealer A selling 100 cars a year were to merge with nearby Dealer B selling 100 a year, they say the merged dealer would sell 200. No way. He'd be lucky to sell 150, because some loyal customers who lost their long-time neighborhood store would leave the brand altogether.”

Todd says that he and his brother Tyler, who runs the finance and insurance department, will keep Schultz Motors “as is” when — and if — their father retires from the business.

“Cerberus is going to grow Chrysler back to the clout it once had,” says Todd. “We're in Milan for the long haul.”