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future productpipeline

SEVENTH IN A 10-PART SERIES

Japan’s small automakers — Mazda, Subaru and Mitsubishi — are leaning on their partnerships as they prepare to launch more electri� ed vehicles and crossovers in the U.S. I PAGES 10, 11, 14 I

AUTOMOTIVE NEWS ILLUSTRATION

EVENTMAIN

MARKETING SECTION: How automakersleverage communal experiences to build

deeper ties with customers. I PAGES 17-27 I

The

Seventeen years after General Mo-tors’ Keep America Rolling strategy made 0 percent � nancing deals a go-to marketing tactic across the indus-try, the deals are on the wane — per-haps for good.

No-interest loan o� ers are drying up across the industry as rising inter-est rates cause automakers to cut back on the promotions. In July, 0 percent � nancing dipped to its low-est level for any July since 2005, at 6.9 percent of sales, according to Ed-munds. � e share was even lower in June, at 5.6 percent, nearly half the level reported a year earlier.

� at those lows are occurring during the peak sell-down months for outgoing models — a point on the calendar once blitzed with 0 per-cent deals — re� ects an epochal shift. Automakers used to the sales surge that can accompany the deals are loath to let go.

“We’re going to hold onto 0 per-cent � nancing until we frickin’ can’t, and we’re kind of getting close in the industry,” Hyundai Motor America Chief Marketing O� cer Dean Evans

0 percent interest deals face sunsetAs Fed raises rates, offers become scarceJackie [email protected]

GM’s Keep America Rolling campaign in ’01 popularized 0 percent � nancing.

see ZERO , Page 40

WASHINGTON — Last week’s agreement on a NAFTA refresh eases some of the tensions between the U.S. and Mexico, but it doesn’t end the un-certainty surrounding automotive supply chains in North America.

� e administration is notifying Congress of its intent to update the regional trade pact, but under the law for speedy reviews, negotiators will have 30 extra days to � ll in details.

Auto industry executives are on pins and nee-dles waiting for the � ne print so they can deter-mine how much it would cost to meet aggressive new rules of ori-gin that deter-mine which ve-hicles and parts qualify for duty-free status.

O� cially, the deal would require that 75 percent of auto content be made in North America, up from 62.5 percent, to cross borders du-ty-free. It also would require that 40 to 45 percent of auto content be made by workers earning at least $16 per hour. Passenger vehicles would also need to include a certain per-centage of North American-pro-duced steel and aluminum.

� e U.S. administration’s goal is to raise labor rates in Mexico, or at least

What’s in � ne print of trade accord?Acceptable terms, but unknown costsEric [email protected]

Volpe: Transition period needed

see NAFTA , Page 40

4 • SEPTEMBER 3, 2018

INGENUITY UNLEASHED

Part 1 of 4: How American Car Dealers Survived the Great Recession

In a survey byCars.com, 94

franchised dealers were asked to cite the most useful strategy

they employed for surviving the Great Recession of 2008-

2010.

38.3%Focused on used-vehicle business

29.8%Reduced advertising

26.6%Relied on � xed

operations

21.3%Focused on F&I

21.3%Nothing in particular/

not sure

11.7%Cut staff

6.4%Closed

underperforming stores to focus on the

good ones

5.3%Other

2.1%Kept all staff, but cut salaries across the

board

Recession strategies

hen he thinks back on the dark days of the Great Reces-sion, the � rst thing Bill Wal-lace remembers is the dizzy-ing speed at which the bottom dropped out of the market.

“At the peak of that thing, our new-car volume dropped 35 percent,” says Wallace, now 70 , owner of Wallace Automo-tive Group in Stuart, Fla. “We immediately started cutting back on inventory, though the

manufacturers fought us every step of the way. It was hard to right-size the ship fast enough.”

Wallace has seen four or � ve recessions since becoming a dealer in 1979. But he believes the Great Recession, which began in December 2007 and lasted 18 months, outweighed all the rest combined.

� e depth of the trough forced Wallace and

his team to come to grips with every aspect of how they managed the dealerships. No stone went unturned — from sales � oor to service drive to the face in the mirror every morning.

For Wallace, this worst of all recessions taught him to � x the things he could control and man-age for the best in those areas he couldn’t.

A severe housing crisis in which mortgage foreclosures soared hammered Wallace Auto-motive, which consists of eight dealerships and 11 franchises. His market area along South

Florida’s Atlantic coast was one of the areas hardest hit by the national disaster.

“� ey were building houses like crazy and buying them up like crazy. People were � ipping these houses — buying a house for $500,000 and selling it for $600,000,” he recalled.

� en it all collapsed. “All of a sudden people woke up and realized they were underwater on their house and the house they had speculated

INNOVATION LAB FOR THE INDUSTRY

DIFFICULT CHOICESDealer Bill Wallace slashed inventory, invested in service to stay a� oat

Bradford [email protected]

WBill WallaceTitle then: OwnerDealership group: Wallace Automotive GroupWhere: Stuart, Fla.Survival strategy: Don’t hit the panic button when downsizing inventory, invest in service departments and keep a positive attitude.

see WALLACE , Page 37

“ ““It was terrible. We live and breathe on the boom and bust of construction. Everybody we knew had a housing horror story.”Bill Wallace

NATASHA BIGGIE

t was the day the earth stood still in the auto business: Sept. 15, 2008.

Lehman Brothers collapsed (it’s still the largest Chapter 11 � ling in U.S. histo-ry) and the � nancial world lurched into chaos. Commercial banks and mortgage lenders around the country failed. Cred-it dried up overnight and high drama began to play out under every dealer-ship rooftop in America.

As storm clouds gathered, Charlie Brown, used-car manager at Chrysler-Dodge-Jeep of Eugene, Ore., tried to call

Chrysler Financial. � e phone nearly rang o� the hook. Eventually a custodian picked up and told Brown that the lender had been dissolved.

Steve Germain, CEO of Germain Motor Co. in Columbus, Ohio, recalls the morning he took the front page of his local newspaper’s business section to work rather than leave it behind for his wife to read. On it was an article about the dealership group’s decreasing sales and falling business.

Every brand was impacted.“Sales just halted,” said Abigail Kampmann,

then general manager of Porsche of San Antonio.It was the � rst month her Porsche store ever

lost money.

“Dealers that had never worried about their viability were quite concerned,” said John McEleney, president of McEleney Autocenter in Clinton, Iowa, and the 2009 NADA chair-man. Annette Sykora, the 2008 NADA chair-man, said: “It was a kind of perfect storm.” Credit is “the lifeblood of our business.”

At Automotive News, we could see the shock on dealers’ faces. � en the fear. � en the looks of determination. In the end, a preponder-ance of U.S. auto retailers weathered 2008, 2009 and 2010 with a resourcefulness roused by doggedness.

Shaped and hardened by the economic trauma of 10 years ago, a generation of dealers reinvented auto retailing in the U.S. In each issue during September, Automotive News will pro� le dealers who gutted out the worst of times with a wealth of innovation. The stories will describe how they seized upon solutions that were varied and brilliant and often counterintuitive. I

Alexa St. [email protected]

see SURVIVAL , Page 37

SPECIALSECTIONI PAGES 28-37 I


INGENUITY UNLEASHED

OLEDO, Ohio — A nationwide recession and Chrysler’s collapse into bankruptcy set o� a

once-in-a-lifetime economic catastrophe in Jeep’s hometown. Unemployment nearly doubled to 14 percent. Small businesses collapsed. Frozen cred-it imperiled most local economic activity.

And in the middle of that violent maelstrom — tied at the hip to a failing, � ailing Chrysler — was Denny Amrhein.

Amrhein, now 69, is the managing partner of two of the three Chrysler-Jeep-Dodge-Ram stores in metro Toledo, including one that sits a mere 2.5 miles away from FCA’s sprawling 3.6-million-

square-foot Toledo Assembly Complex.FCA regularly commands a 25 percent market share in

metro Toledo — about double what it is nationally — and about 75 percent of the new vehicles Amrhein sells in a month are to either an FCA employee or an employee’s family or friends.

So when Chrysler fell a decade ago, it dragged Amrhein along for the ride.

“I’ve been in this business my whole life — since I was 19 — and I’ve been through all kinds of ups and downs, but there was never nothing that matched ’08-’09,” Amrhein recalled from his o� ce o� the showroom of his Grogan’s Towne Chrysler-Jeep-Dodge-Ram store. “It was the tough-est time I’ve ever been through in my career.”

Turn to earnAnd he says the only reason his businesses survived was

a clever, borrowed strategy to sell lots and lots of barely pro� table used cars.

“In 2008-09, right during the recession, my used-car manager came with a new philosophy of turning cars in 30 days — 60 days max,” Amrhein said. “We weren’t into mak-ing a lot of money on the cars —we were into turning them, so we could turn our cash fast.”

� e used-car strategy had come from Cox Automotive Group, Amrhein said. It required expert-level auction watching, concentrating buys on vehicles that might not generate the highest grosses but would be bought quickly

once they were on the lot. It also required discipline, shuf-� ing any vehicle that didn’t sell in the allotted time back through the auction.

But once fully implemented? Even in the heart of the deepest recession in decades, Amrhein said Grogan’s Towne went from selling 60 used cars a month to turning 150-175 a month.

“We were turning cars at hardly any front-end pro� t, and selling the warranties and the aftermarket accessories, of course; but the idea was that every car we’d sell, we’d try to turn within 10 days,” Amrhein said. “We’d take that car, and we wouldn’t pay any � oorplan on it, because we got it, and we’d turn it. So our cash turned, and our cash � ow became pretty damn good for as bad a situation that most stores were in at that time with cash � ow.”

Life supportAmrhein said the well-timed used-car strategy was the

life support that his two stores needed to stay alive, but it didn’t fully cover the damage that the recession and Chrys-ler’s bankruptcy was doing to his operations.

In August 2008, Chrysler Financial — which also had been his � oorplanning lender — ceased its consumer leas-ing operations. In most markets, the cessation of leasing was a crippling injury to dealers, but in areas such as Tole-do and metro Detroit, where employee leases dominate, it was devastating.

“It cut our new-car business, which was already down, almost in half overnight,” Amrhein said.

� e outgoing Bush administration pumped a cash injec-tion into Chrysler — and General Motors, which operates a large transmission plant in Toledo — in late 2008 to keep the automakers a� oat. Chrysler responded by exerting tre-mendous pressure on its dealers to order and take delivery of new vehicles that, frankly, weren’t selling.

In Toledo, the majority of workers at the assembly com-plex were laid o� , and other Chrysler workers in the region — at a components plant in nearby Perrysburg, Ohio, and an engine plant 20 miles north of Toledo in Dundee, Mich. — were either laid o� or working far fewer hours .

� en, on April 30, 2009, Chrysler’s entire operations

TIME IS MONEYHow did Chrysler dealer Denny Amrhein beat odds in Toledo? Quickly turning used cars

Larry P. [email protected]

T

Denny Amrhein borrowed a strategy from Cox Automotive to generate cash � ow from used vehicles during the recession.

“ ““I’ve been in this business my whole life — since I was 19 — and I’ve been through all kinds of ups and downs, but there was never nothing that matched ’08-’09. It was the toughest time I’ve ever been through in my career.”Denny Amrhein

PHOTOS BY GREG HORVATH

see AMRHEIN, Page 36

SEPTEMBER 3, 2018 • 29

INGENUITY UNLEASHED

“

ou have to retain the culture of your people,” said Rhett Ricart, CEO of Ricart Automotive Group in Columbus, Ohio. “You have to let your people know” that they’ll be taken care of “in the middle of all this chaos they went home and saw on television. � ey saw their neighbor get their car repossessed. � ey saw homes with

foreclosure signs on the front of them.” Ricart said a policy of “take good care of your

people” was much of the driving force behind his group’s success during the recession, along with the idea to “Never let sales outrun service.” Rap-idly implementing cost-saving ideas from his 20

Group helped, too. Today, the group holds Ford, Nissan, Mazda, Mitsubishi,

Hyundai and Kia franchises, employs between 560 and 590 employees and sells 16,000 new and used vehicles a year.

‘Resilient’Ricart, 61, has been in auto retailing since 1981, has rep-

resented Ohio’s franchised new-car dealers as a director of the National Automobile Dealers Association and has seen recessions since the early 1980s.

“As dealers, we’re very resilient,” Ricart said. “Most, if not all, dealers have the hands on the pulse of their place.”

� e recession sparked a cultural change in the car busi-ness, Ricart says. Hospitality remains at the forefront of dealer focus, and to Ricart, the challenges of the 2008 re-cession ultimately proved bene� cial as many dealers used several strategies to stay a� oat that they often still employ.

In the early 2000s, just a few years before the recession, Ford began eliminating some of its product line, a time in which some dealers “got � t,” as Ricart put it.

“When the global meltdown came, the Ford dealers such

as myself — we didn’t have a lot of fat on the bone, because we had already right-sized our business and did some best practices,” Ricart said. “Ford dealers were at a distinct ad-vantage.”

Payroll changesNonetheless, when the Great Recession hit, it hit hard. Ricart, drawing from discussions in his 20 Group, invest-

ed in hospitality training for his employees, an investment

which has carried the business forward long after the re-cession ended.

With less business for sales sta� ers, it was a time to ap-preciate “the old cliche from Ben Franklin: ‘An idle mind is the devil’s workshop,’ ” Ricart said.

“We kept training everybody,” he said. “Because quite frankly, we didn’t have 100 people coming through the door for a weekend, we’d have 60. When you have less peo-ple coming through the door, you better do a better job of providing a way for them to buy a car from you.”

Ricart changed department heads’ pay so that it was based on net pro� t, not gross pro� t, and instituted cross-training for employees. � e group’s top 5 percent of earners took a 20 percent salary cut, though they kept their commissions. He also in-sourced janitorial, plumbing, landscaping, electrical and similar services, turning the

MAN OF THE PEOPLEOhio dealer Rhett Ricart put staff � rst, taught them to make the most of opportunities


Y“We kept training everybody. Because quite frankly, we didn’t have 100 people coming throughthe door for a weekend, we’d have 60. When you have less people coming through the door, you

better do a better job of providing a way for them to buy a car from you.”Rhett Ricart

Rhett RicartTitle then: Co-ownerDealership group: Ricart Automotive GroupWhere: Columbus, OhioSurvival strategy: Reassure employees, apply cost-saving ideas from 20 Groups

“

PHOTOS BY KELLY KOOLHOVEN

For Rhett Ricart, the challenges of the 2008 recession ultimately proved bene� cial — many dealers still use the strategies that helped them survive.

see RICART , Page 36


25YEARS

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INGENUITY UNLEASHED

GOING WITH THE FLOWCar washes, other new revenue streams buoy Cleveland-area Honda dealer

revor Gile’s response to the recession? A massive,

high-end car wash.His unlikely, almost bizarre

response worked. And it led to an approach that contin-ues for Gile today: �nd new revenue streams as the deal-ership of the future evolves.

�e initial goal for Gile, then general manager at Mo-

torcars Honda, of Cleveland Heights, Ohio, was to stay engaged with cus-tomers even if they weren’t in the market for a vehicle.


“We started looking at all the other revenue streams that go outside the dealership that are tied to when peo-

ple interact with us,” Gile said. “If we kept them going to our service or our car washes, there was a way for us to stay in front of them.”

Motorcars Honda and Motorcars Toyota — the other Motorcars store location operated by Gile’s father and his brother — already had small car wash setups at the time. But Gile, now 39, knew these weren’t provid-ing top-quality service, and that ser-vice and quality were critical to maintaining business.

�e �rst car wash opened just down the road from the dealership, with a rainforest theme. A Dis-ney-styled Tree of Life rock wall in front of it added to the visual allure.

Surprisingly, Gile found that after making the investment in the car washes, the dealership’s water bill substantially decreased and employ-ee costs went down.

�e new system was more wa-ter-e�cient than the prior, outdated one. And the store no longer had to hire valets to run the cars through the wash. Instead, vehicles went on a fully automated conveyor belt, re-quiring the attention of only two em-ployees per shift.

Car washes clean upWithin a few years, the dealership

group added two more o�-site car washes, branding them as Rainforest Car Washes.

Today, the three car washes — all lo-cated within an hour and a half of the dealership — have the capacity to wash 100 to 120 vehicles an hour. �e website currently advertises unlimit-ed washes for as little as $20 a month.

“�e car washes have generated more money than anything we can imagine,” said Gile, who was named to Automotive News’ 2018 class of 40 Under 40, forty up-and-comers in auto retailing under age 40. He’s now considering adding a fourth car wash.

Gile is also working with a chemi-cal company to monitor systems for

soap e�ciency, keeping up his ef-forts to go green.

Indeed, being environmentally friendly has become a key part of the dealership group’s marketing strate-gy.

In 2016, BP Global named Motor-cars Honda as the �rst carbon neu-tral dealership in the world, citing its solar panels, LED lighting �xtures and other steps the dealership took to o�set its carbon footprint.

New ventures�e success of the car washes has

led Gile to continue to seek new reve-nue and pro�t streams to o�set de-clining pro�ts from new-vehicle sales.

For example, he developed �eet- management software to keep track of Honda loaner vehicles during the Takata airbag recalls. “What we were spending on rental cars every month was a huge expense for us,” Gile said. �e software on the market did not provide what he needed as a dealer, he said.

“A lot of products are not really de-signed by dealers or for dealers,” Gile said. “To really understand what a dealer is looking for you have to un-derstand the whole process.”

He developed Rental Recorder, which helps dealerships keep track of how many vehicles they should have in their �eets and tells dealers when to move �eet vehicles to the used-car side to be sold. Gile has saved more than $5,000 a month us-ing this software.

He also set up a marketing agency, which now helps 61 dealers, with 54 rooftops, to manage their social me-dia presence and online marketing e�orts.

It’s all part of preparing for the dealership of the future, he said.

“A lot of the traditional revenue streams are going to keep getting cut back,” Gile said. “�e market is not going to be what it was in the ’90s, early 2000s.” n

TTrevor GileTitle then: General manager, Motorcars HondaWhere: Cleveland Heights, OhioSurvival strategy: Find new revenue streams.

“A lot of the traditional revenue streams are going to keep getting cut back.”Trevor Gile


201 8 F I N A L I S T

INGENUITY UNLEASHED

rnie Boch Jr., always a maverick, went his own

way in the Great Recession, sticking with a fat advertising

budget he pegged in the “tens of millions of dollars” annually, even as other big

auto dealers slashed advertis-ing to save costs.

“I didn’t back down a dime,” Boch, 60, told Auto-

motive News. How did it turn out? “I still got

killed!” he admitted.“Sales plummeted. But it was more

an investment in the future. My [market share] position didn’t change. Before the recession we were No. 1 in New England with Honda, and No. 1 in New England at Toyota. And we were still there after” the recession ended, he said, “No. 1 in New England.”

Relentless driveBoch said that the decision was his,

as the head at the time of privately held Boch Automotive, in Norwood, Mass. But executive management al-so supported the idea, he said.

“I was the president and CEO. I didn’t have a board. I have my people, and we meet and we talk about the business, but there was nobody against that. It was, ‘Full speed ahead!’

“I believe not cutting back on ad-vertising, when it turned around again, made a big di�erence in the recovery,” he said.

“People left and right were bailing out of advertising, but I continued at the high level — the very high level — I normally advertise at,” Boch said. “I knew we’d come out of this, and share is probably the most im-portant thing in the retail automo-tive universe.”

Boch pursued the same strategy, with completely di�erent short-term results, for Subaru of New England. �e independent distributorship for the six New England states remains the crown jewel of Boch’s assets.

‘Tale of Two Cities’“It was like the Tale of Two Cities. I

had massive, mass-market retail properties, Honda and Toyota, and I had the true exotics, Ferrari and Maserati. And then, I had �e Little Engine �at Could, or however you want to describe Subaru,” Boch said.

“Toyota and Honda numbers went down quickly. But the Ferrari and Maserati numbers, they plummeted! �at whole exotic niche got de-stroyed, and destroyed on multiple levels,” he recalled.

“�ose customers, with the mar-kets like they were, they did not want to spend the money. It also got hurt imagewise. Even people who had the money — and they had the money — couldn’t pull up to work after laying o� 100 people in a new exotic car.”

Meanwhile, Subaru de�ed gravity. It was the only major brand whose sales improved year over year, straight through the Great Recession. Boch said the “props” for that achievement go to Tom Doll, CEO of Subaru of America, for making the brand “cool

and desirable,” and to management in Japan for tailoring cars and crossovers speci�cally for U.S. tastes.

“At Subaru, I gotta tell you, we thought we were gonna get killed, but we’re in meetings after the �rst couple of months [of the recession], looking around at each other and saying, ‘We’re up! We’re up!’ We were up in 2008, 2009, 2010, 2010-2011. It was completely contrary to the in-dustry. We were the only manufac-turer whose sales improved in the

recession,” Boch said.It’s also fair to say Subaru of New

England has historically had higher market share than the brand’s na-tional average, partly because Boch’s father, Ernie Boch Sr., who founded Subaru of New England, always re-quired exclusive dealerships.

Subaru’s all-wheel drive is also a popular feature in snowy New En-gland. Ernie Boch Jr. said Subaru’s market share in Vermont, for in-stance, is so high it’s “freaky.” n

REFUSE TO LOSEMass. dealership group went ‘full speed ahead’ with advertising

Jim [email protected]

EErnie Boch Jr.Title then: CEODealership group: Boch AutomotiveWhere: Norwood, Mass.Survival strategy: Full speed ahead on advertising, with a view to the industry’s eventual recovery


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INGENUITY UNLEASHED

LEARNING TO SELL AGAINWhen leases dried up, Michigan dealer Bill Perkins retrained his staff in the art of retailing

hen the recession hit and General Motors’ captive � nance com-pany abruptly stopped o� ering leases, dealer Bill Perkins did what he had to do.

He retrained his salespeople to sell vehi-cles through retail con-tracts.

Previously, leasing was virtually all some of them knew, said the presi-dent of Taylor Chevrolet, in Taylor, Mich.

� at meant bringing in trainers who focused on how to pitch vehi-cles’ features and bene� ts to shop-pers, rather than concentrating on the low monthly lease payment.

“Some salespeople were so used to leasing they didn’t know what to do,”

recalled Perkins, 69, with an ironic chuckle.

At the time, he also owned Merollis Chevrolet, in Eastpointe, Mich., which he sold in October 2017, and Jim Bradley Pontiac-Buick-GMC, in Ann Arbor, Mich., which he sold in 2010. Prior to the recession, 50 to 60 percent of the vehicles were sold through leases at Perkins’ stores.

‘Back to the basics’“When General Motors � led for

bankruptcy, [GM] pulled in their horns and didn’t want to lease cars anymore, they wanted to retail them. We didn’t have a source for leasing anymore. We went back to the basics and taught our people how to retail cars.”

While he was at it, Perkins also schooled his sales team about the ins and outs of selling late-model, o� -lease vehicles that had been recon-ditioned and covered by a factory warranty under GM’s certi� ed used-vehicle program.

Prior to the recession, some of Per-kins’ managers and salespeople didn’t want to sell CPO vehicles. Cer-ti� cation could add $600 or $700 to the cost of a used vehicle, and the higher price could make that vehicle

uncompetitive with others on the lot.But as new-vehicle sales collapsed

industrywide and GM put more em-phasis on explaining the bene� ts and value of CPOs, Perkins’ sales sta� welcomed the opportunity to have what amounted to another pro� t center, he said.

As a result, during the heart of the recession in 2010, used-vehicle sales at Taylor Chevrolet totaled 80 to 90

units per month, up from 50 to 60 per month the year prior. Annual used unit sales at Merollis Chevrolet dou-bled to about 1,000 in the same peri-od, Perkins said.

“� ey could sell either, but the fo-cus went from new to used,” he said.

Rebounding� ough new-vehicle sales were a

challenge, Taylor Chevrolet held its own.

In 2009 and 2010 when industry-wide new-vehicle sales plunged to their lowest points in recent history, new-vehicle sales at Taylor Chevrolet showed modest but steady year-over-year increases, Perkins said.

� ose yearly increases picked up as the industry rebounded.

Taylor Chevrolet sold 2,700 new vehicles in 2017, up from about 1,000 in 2010 and 700 in 2005, Perkins said.

At Merollis Chevrolet, new-unit sales grew from about 700 a year in 2010 to almost 1,200 in 2016. New-unit sales slacked o� in 2017 as news of the pending dealership sale spread among employees, but he re-tailed 800 units at the store in the 10 months he owned it.

Perkins bought the Pontiac-Buick- GMC store in Ann Arbor in 2005 with the idea that his son, Monte, who was in high school at the time, would one day take it over.

“It would have been a good market for him,” he said of Monte, who today

is Taylor Chevrolet’s general sales manager.

But when GM � led for bankruptcy protection in 2009 and announced it would discontinue the Pontiac brand at the end of 2010, things changed. Pontiac represented 65 percent of the Ann Arbor store’s revenue.

Perkins � gured it would take three to � ve years for the store to regroup. Besides, he had a buyer: the Saturn dealer down the street who was los-ing his store because that brand was also discontinued by GM.

Perkins said he didn’t necessarily agree with some things that hap-pened during the recession but un-derstands that like himself, GM did what it had to do.

He adds: “I wouldn’t be where I am today if it weren’t for General Mo-tors.” n

Arlena [email protected]

WBill PerkinsTitle then: PresidentDealerships: Taylor Chevrolet, Merollis Chevrolet and Jim Bradley Pontiac-Buick-GMCWhere: Metro Detroit and Ann Arbor, Mich.Survival strategy: Retrained his leasing-pro� cient salespeople to sell new vehicles through retail contracts and to sell CPO vehicles

“We didn’t have a source for leasing anymore. We went back to the basics and taught our people how to retail cars.”Bill Perkins, left, with his son, Monte

At Taylor Chevrolet staff were taught to pitch vehicles’ features and bene� ts.


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INGENUITY UNLEASHED

or Liza Borches, CEO of Car-ter Myers Automotive in

Charlottesville, Va., and other deal-ers now in their 40s, the Great Re-cession was a painful lesson in how

to navigate a dramatic eco-nomic downturn. It’s one they have vowed not to forget.

Borches said her generation of dealers now has a more conservative approach to debt, dealership expan-sion and expenses, all of which pre-pare them for when — not if, in her

mind — the next recession hits.“I’m really thankful that I had to go

through 2008 and 2009 fairly early in my career,” she said, because there were things “that we had to do” then “that I’m very con� dent has made us a much better dealership group today.”

She adds: “I learned that business, even when it’s really good, that we can’t take that for granted.

“Expense control is critical even in good times.”

Financial reviewBorches was head of one of the � ve deal-

erships in her group when the recession began. She was transitioning into a role to support her father, then president of the company, when the two realized changes were needed.

Borches and her father took about 12 months to critically review � nances and expenses.

“We worked hard to stabilize in 2008 and 2009,” Borches said. “We had a strong balance sheet. We had very low debt in our company at that time.”

From there, they decided they were in a � -nancial position to take on some debt. Borches began buying stores in 2010 from

dealers looking to retire or sell. She also bought buildings from dealers whose fran-chises had been terminated and put her dealerships into them. She ended up buying or opening at least one dealership per year.

In evaluating those purchases, Borches analyzed what brands the group wanted to represent and how far geographically it wanted to expand. “We tried to be very in-tentional about our growth,” she said.

In 2009, Carter Myers Automotive hit a low: retail sales of 2,777 new vehicles and fewer than 1,500 used vehicles. Today, Carter Myers Automotive ranks No. 106 on Automotive News’ list of the top 150 deal-ership groups based in the U.S., with retail sales of 8,776 new vehicles in 2017, plus 4,979 used units. It has 13 dealerships and holds 16 franchises.

Internal ef� ciencies Borches cut marketing spending, looked

at overall personnel costs in terms of each vehicle sold and realized she had too

much inventory.“What I walked away from 2008 learning

was we did not have a strong handle on our marketing, our personnel and our in-ventory costs,” Borches said.

As Borches grew the company, she be-gan hiring people who had gone through the NADA Dealer Academy, who had been groomed by their general managers and who had a stake in the communities in which Carter Myers was trying to expand.

She hired fewer general managers, giv-ing each multiple stores to head and more equity in the company. She also began limiting the number of vendors and third-party marketing companies, while buying digital media in bulk.

“By growing the number of dealerships that we have in a particular market, we were able to put in combined recondition-ing centers so that we could have the most e� cient personnel and processes,” said Borches, who in 2013 was named to Auto-motive News’ list of 40 auto-retail leaders under age 40.

Post-2009, Borches has held expenses per vehicle sold below what it was pre-re-cession.

One area of Borches’ operations that was o� -limits for cost-cutting was her ties to the community. “Where we cut expens-es,” she said, “wasn’t a� ecting the custom-er experience or the communities we were a part of.” a

CAUTIOUS GROWTHWith little debt, Carter Myers Automotive added stores in downturn


FLiza BorchesTitle then: Store general managerDealership group: Carter Myers AutomotiveWhere: Charlottesville, Va.Survival strategy: Stabilize � nances with low debt, then buy stores while insisting on tight cost controls.

“I learned that business, even when it’s really good, thatwe can’t take that for granted. Expense control is critical even in good times.”Liza Borches

PHOTOS BY MELODY ROBBINS


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36 μ SEPTEMBER 3, 2018INGENUITY UNLEASHED

work over to sta�ers who wanted to earn extra cash to get through the tough times.

In order to increase transparency in-ternally, Ricart showed executives and midlevel managers the �nancials for their stores. He also turned sales-people and technicians into salaried positions for purposes of retention.

“�e back end of the business was a big supporter of it,” Ricart said. “But we had to make sure we could keep them, especially the interns. �ey’re your future — your interns are your future.”

Purchasing “�e thing with the global melt-

down was that it was unexpected,” Ri-cart said. “Being a part of the 20 Group was so valuable during that time be-cause we were able to sit down with other dealers,” he recalled. “We were all in the same boat together from dif-ferent parts of the country and you can listen to their best practices. I think that’s when best practices really took o� in the car business, because the 20 Groups started sharing all these ways to save expenses.”

Along with hospitality training, Ri-cart changed the frequency of his group’s budget from monthly to weekly; required purchases and in-voices to be approved by the dealer principal or department manager; and wrote to vendors stating the dealership group wouldn’t break their contracts — as long as the ven-dor cut its price by 10 percent.

“Every single account we did busi-ness with approved it,” Ricart said.

Ricart employed smaller tactics, including buying the stores’ co�ee and vending machines and hiring out stocking the machines, which Ri-cart calls “small pro�t centers.”

Ricart shared an anecdote from a member of his 20 Group. Automak-ers wanted dealers to give a new-car buyer a full tank of gas, so this mem-ber got creative.

“If you sold a used car to some-body, there was nobody telling you [that] you had to give them a full tank of gas. So, what he did with all the trade-ins that came in, people would trade their car in, in many cases they’d trade them in with half a tank of gas or something. He had a pump-er truck and he had a 55-gallon drum on the back of it and he would go around and extract all the gasoline out of all these cars that were traded in that he was taking to the auction.”

“�at’s how granular people got,” Ricart recalled.

Family Ricart’s stability throughout the re-

cession is also something he attri-butes to his “home grown family” business.

“�ese best practices were good, and they made everybody better. �e best thing was it made us realize a few things. One, how important our family was,” said Ricart, who owns the dealership with his brother, Fred. “When all hit the fan, your family was there for you. You had to keep your family core together.”

“�e second thing that became ap-parent,” Ricart said, “was that: What did you really need to be happy?” c

RICARTcontinued from Page 29

Ricart turned technician jobs into salaried positions to help with retention.

ground to a halt as it �led for Chapter 11 bankruptcy. In metro Toledo, it was as if a neutron bomb had gone o�; the buildings and equipment were still standing in most business-es, but the people were gone.

Amrhein and his partners were forced to do something he had never had to do: lay people o�. Nearly 20 percent of his salaried employees at both stores were shown the door.

“It was the worst day I’ve ever had since I’ve been a dealer,” Amrhein said, “because these were our em-ployees, and we knew their families, but we had no choice. We had to get our expenses under control.”

In April 2009, unemployment in the county had grown from 7.7 per-cent the prior September to 11.5 per-cent. Chrysler’s perilous shutdown — as it traversed the bankruptcy pro-ceedings and tried to emerge out the other side in a partnership with Fiat — would see the local unemploy-ment rate spike to 14 percent.

Unlike 798 other Chrysler dealer-ships that were culled by the auto-maker during the bankruptcy, Am-rhein’s two stores survived, but it would be years before they fully re-

covered. In 2012, still facing limita-tions on his �oorplan, Amrhein cut his remaining ties with the remnants of Cerberus-owned Chrysler Finan-cial and switched to Ally.

His stores continued to recover, and, in fact, grew stronger as the remnants of the recession and bank-ruptcy faded. A decade on, Grogan’s Towne is on pace to have its best year ever in 2018, as is Amrhein ’s other store, Charlie’s Dodge-Chrysler-Jeep-Ram in the more a�uent sub-urb of Maumee, Ohio. �rough July, the two stores combined have sold nearly 3,400 new vehicles and more than 2,300 used vehicles, he said.

But the lessons he learned a de-cade ago will never leave him.

“I’ll tell you what: It made us better dealers,” Amrhein said. “�ere’s no doubt about that.” a

AMRHEINcontinued from Page 28

Denny AmrheinTitle: OwnerGroup: Charlie’s ToledoLocation: Toledo, OhioRecession strategy: Greatly increased used-car turnover rate through aggressive pricing and auction strategy to turn cash quickly and avoid �nance charges

lll

KELLY KOOLHOVEN

INGENUITY UNLEASHED


on. � ey’d have a million [dollars] in home mortgages in houses that were worth $500,000.”

On every block, properties fell into dis-repair as houses went unpainted and lawns went unmown.

“It was terrible,” Wallace said. “We live and breathe on the boom and bust of con-struction. Everybody we knew had a hous-ing horror story. � ey weren’t in the mood to buy a car. � ey were worried about get-ting their house repossessed. � at hit us in the solar plexus.”

‘Catch a falling knife’ � e stomach-churning drop in demand

forced Wallace and his team to � rst turn their full attention to readjusting invento-ry and advertising expenses. Easier said than done, he quickly realized.

“To sell 100 cars, you need 200 on the ground and another 100 in the pipeline. To start shutting that o� , it takes three to four months to catch up to even. You couldn’t just � ip the switch.

“For a while, you’re taking trade-in val-ues that are not realistic. You take a trade-in for $20,000. But what’s happening is the market value is only $18,000. Where you made your mistake is you shouldn’t have taken that car at $20,000. But if you’d of-fered the customer that [market value of only $18,000], they probably wouldn’t have bought the car.”

Wallace draws an analogy. “Stockbro-kers say, ‘Don’t try to catch a falling knife.’ When that value starts dropping, you have to wait till it hits the bottom. You run into a period when you’re putting too much in trade-ins to keep everything moving. You realize, ‘Not only do I have all these new cars, I have all these used cars I’ve got too much money in.’ ”

All the while, the carmakers were trying every trick in the book to get Wallace and

other dealers to keep taking vehicles. “� e manufacturers were pushing, push-

ing, pushing — putting objectives out there. ‘If you sell 100 cars you’re going to get an extra $10,000.’ But the money we got from them was peanuts compared to how much we had overvalued those trades.

“We had $4 million worth of used cars, but if we’d taken them to auction in those days we’d have been lucky to get $3 mil-lion,” he recalled. “What always compli-cated things is you had cars that contin-ued to sell in that downturn. You couldn’t not take any cars because you were hurt-ing yourself.”

Generally, import brands were doing better than the domestics, particularly General Motors and Chrysler, both of which went into bankruptcy. Wallace had GM and Chrysler stores.

With their GM and Chrysler brands, Wallace and other dealers didn’t know whether warranties would be honored or whether customers would want to buy the marques’ used vehicles.

In the end, as much as Wallace and his team scrambled to align trade-in values with the market, there was only so much they could do. � ey had to be patient and

wait for the market to correct. “Once the market stabilized, say six

months after declaration of bankruptcy, the used-car market stabilized. We were able to take cars in trade at what they were worth in the market.”

Wallace didn’t kid himself about how much control he had over new- and used-car values. He knew he had to look else-where for ways to make up for the collapse in demand. While he couldn’t control the retail market, he could make a di� erence with his service departments.

Wallace and his managers soon noticed customers who might have bought a new car in better times were willing to invest more in keeping their current vehicles running.

So top managers at Wallace Automotive stores began spending more time in � xed ops meetings and taking a hard look at previously delayed requests from service managers for new equipment and tools.

“We upgraded some equipment we’d been postponing,” including new front-end alignment machines and new diag-nostic equipment at several dealerships, he remembers.

� e group repainted several service re-ception areas, including the � oors and re-ceiving area. “It made a di� erence in the feel of the place and the psychology of those guys.”

But if Wallace invested more in service, he expected more, too. If the company was going to buy equipment, he expected the service departments to use it to bring in more business.

“� ey said: ‘Don’t worry boss, it will pay for itself,’ so they did it. � ey made it work,” Wallace said. � e investments paid o� . Said Wallace: “Service never took a blip. If anything, it blipped up. � at was a bright spot for retailers.”

Wallace Automotive made service a top priority.

“We said, ‘� ese people are our super-stars,’ ” he recalled. “Of course, the � xed op-erations people loved it. � ey always feel

they’re the leftover people in an organiza-tion.” And to some extent, that’s true, he ad-mitted. “Almost no organization has a cele-bration when they have a record � xed ops month like they do a record sales month.”

Pain� ough the service and parts depart-

ments were bright spots, there was pain almost everywhere else.

In the depth of the recession, Wallace said, “You don’t need as many people to clean the cars or to show the cars, not as many managers or � nance managers.”

Wallace estimates his dealership group employed about 400 people when the re-cession started and trimmed sta� to about 320 through layo� s and attrition.

� ose cuts made for some di� cult choic-es. If there were four � nance managers at a store and he needed only three, Wallace preferred cutting the sta� to three over keeping all four but reducing their pay.

� rough it all, Wallace realized the re-covery of his business had to start with his own attitude.

“You had to tell yourself: ‘I can’t go in and tell these guys the world is falling down. We have to make some changes. And everybody is going to go through it to-gether.’ You have to keep that attitude and look everybody in the eye.”

Wallace started bringing his lunches in a brown bag and showing up at 7:30 a.m. to greet customers on the service drives.

“I’m going to be shaking hands. I’m not going to lie to anybody. But I’m going to put the best face on this that I possibly can. And it works. If people don’t see you, they’re going to assume the worst,” he said.

“People have told me to this day they did not see any change in my demeanor.”

Wallace says the lessons of the Great Re-cession live on at his dealership group.

“I sure hope we haven’t forgotten. Now that things are so much better than they were, we try to act the same way we did during those tough times.” a

WALLACE continued from Page 4

� e Great Recession was an innovation lab. Dealers strategized and improvised. � ey rewired belief systems and forged new philosophies. Ideas bubbled up.

Much of what they did was predictable: � ey cut sta� , froze hiring, cross-trained employees to handle multiple jobs, tempo-rarily moved managers into sales posi-tions, based department heads’ pay on net, not gross, pro� t, and instituted 35-hour workweeks. But they also thought out of the box. Many turned to nonautomotive candidates for sales positions and shifted salespeople and technicians into salaried positions to retain them.

Some decided to “just say no” to manu-facturers who were twisting their arms to take more vehicles when the recession hit.

� ey also rebid vendor contracts, cen-tralized administrative processes and slashed advertising budgets, though a few turned up the volume on advertising. � ey reduced print media spending and bought digital in bulk across all stores in a group.

Little things meant a lot, like combining reconditioning centers, siphoning leftover gasoline from used vehicles to � ll the tanks of new vehicles and switching from generic email responses to personalized responses. Some even bought co� ee and vending ma-chines and turned them into pro� t centers.

Scores of retailers boosted reliance on used-vehicle sales and they became ob-sessed with turning vehicles in 30 days or less with little front-end pro� t, selling the warranties and the aftermarket accessories.

� ose dealers began watching auctions intensely, concentrating buys on vehicles that, while not generating the highest grosses, would be bought quickly once they were on the lots. � ey became highly disci-plined in shu� ing vehicles that didn’t sell in the allotted time back through the auction.

“We’d try to turn within 10 days,” said Den-ny Amrhein, managing partner of Fiat Chrys-ler Automobiles stores in Toledo. “We’d take that car, and we wouldn’t pay any � oorplan on it, because we got it, and we’d turn it.”

Meanwhile, dealers focused on � xed op-erations like never before. � ey chased ser-vice business from stores that had closed. � ey adopted grid pricing based on the di� culty of the job and they started multipoint in-spections on all vehicles in for ser-vice while adding services such as tires, detailing, minor bodywork and headlight restorations.

Managers leaned out parts in-ventories, started group purchas-ing of parts and supplies and groupwide delivery systems to re-duce labor and fuel costs. One counterin-tuitive measure was to reduce discounting in the service departments.

Everywhere, dealers got granular. � ey analyzed performance metrics and con-ducted weekly, storewide � nancial updates.

Meanwhile, they made hospitality to cus-tomers a priority. Many conducted free ser-vice clinics on weekends to attract customers.

Time to ponderOverall, more e� ort went into training,

which had an unexpected payo� : brain-

storming of unique marketing and sales strategies.

Some bene� ted just by having time to think about their problems.

“What did it for me — the way in which I was able to � nd the path and processes — was that I started to spend more time at the store when the store was closed,” said Wayne Siegel, dealer principal at Legend Auto Group in Amityville, N.Y. “I came in earlier.”

Dealers sought help where they could � nd it. Chris Haydocy of Haydocy Auto-motive Group in Columbus, Ohio, reached out to his congresswoman, who vouched

for the dealership as a crucial cor-nerstone to the neighborhood. Eventually, he got his loan ex-tended.

As 2008 NADA chairman, Syko-ra, dealer principal at Smith South Plains Ford-Lincoln in Levelland, Texas, helped set up workshops and a hotline with 20 Group moderators and academy instructors who helped dealers analyze � nancial statements.

“We wanted to employ that intellectual capacity with our instructors to push that out as a service to our dealer members,” she said.

“I still have conversations with dealers who say, ‘I’ll never forget that,’ and that they still employ the strategy that they em-ployed through that period.”

Dealers, of course, also looked for oppor-tunities, buying stores at low prices from re-tailers looking to retire or sell. � ey termi-nated less-successful franchises on their own and used the proceeds to bolster stron-ger ones in their groups. Some sold real es-

tate and converted the funds into equity.Dealers also saw the big picture. Several

helped revitalize surrounding neighbor-hoods to perk up local economies. Some, such as Tamara Darvish, then vice presi-dent at DARCARS Automotive Group in Silver Spring, Md., took to “� ghting for our industry” in Washington.

Molded by the recessionIn short, what dealers did was exercise ev-

ery entrepreneurial bone in their bodies. Germain appreciates the changes that the Great Recession brought to his strategies, many of which he says remain in place.

“We’re a much more e� cient operation than we were 10 or 11 years ago as a result of that downturn,” he said.

So many dealers and dealership manag-ers just launching their careers when the crisis hit were molded by the Great Reces-sion. Liza Borches, CEO of Carter Myers Automotive in Charlottesville, Va., says her generation is more conservative about debt, expansion and expenses, all of which make these dealers prepared for when — not if, in her mind — the next recession hits.

“I’m really thankful that I had to go through 2008 and 2009 fairly early in my career,” she said.

But even those who thought they had seen it all were driven to change.

Says Amrhein, who was 59 when Leh-man Brothers collapsed: “I’ll tell you what: It made us better dealers. � ere’s no doubt about that.” a

Jim Henry and Larry P. Vellequette contributed to this report.

SURVIVAL continued from Page 4

Sykora: Helped set up assistance

Wallace: “Look everybody in the eye.”

NE

WS

PA

PE

R

See p. 47

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future productpipelineEIGHTH IN A 10-PART SERIES

Volkswagen has a pickup in the pipeline and a series of electric vehicles I PAGE 19 I

INGENUITY UNLEASHED

STAYINGPOWERWhen his Detroit-area Chevy store wound up on GM’s closure list in 2009, Karl Zimmermann decided to �ght I PAGES 41-52 I

F&I SECTION: As more vendors turn up on their doorsteps, how can dealerships determine which

ones are the best �t? I PAGES 23-38 I

VENDOR OVERLOAD

Surprising collapse of a ‘houseof cards’500 cars sold out of trust?

Described as a “house of cards” in court records, a once rapidly expanding dealership group with stores in Michigan, Pennsylvania and New Jersey is now facing lawsuits from Nissan and Hyundai’s captive �nance arms as the survival of its stores is in question.

Five of the group’s dealerships — owned by auto retail veteran Michael Saporito and former NFL linebackers Jessie Armstead and Antonio Pierce — are al-leged in the lawsuits �led last month to have sold nearly 500 vehicles worth more than $10.5 million out of trust, with 98 other vehicles missing. It has led to vehicles being repos-sessed, an apparent closure of two stores and questions about the livelihood of the owners’ other dealerships.

�e turmoil represents a major fall for a group of dealers who just two and half years ago were tout-ed by Nissan North America as a major part of the automaker’s ambition to grow market share in metro Detroit. �e ownership trio opened All Pro Nissan of Dearborn, in Michigan, in 2015 and All Pro Nissan of Macomb, in Clinton Township,

Two of the auto industry’s most prominent global leaders — General Motors CEO Mary Barra and Carlos Ghosn, CEO of Renault and chairman of Nis-san Motor and Mitsubishi Mo-tors — will be keynote speakers at the Automotive News World Congress in January.

Barra, who is completing her �fth year as CEO, has estab-lished GM as a trailblazer in mo-bility and new technology plays while dramatically restructuring the company’s worldwide oper-ations.

Ghosn, a leader in the Re-nault-Nissan orbit since 1999,

when he became Nissan’s COO, has put the �nishing touches on the group’s acquisi-tion of Mitsubishi. He has pushed the three-company al-liance to speed the conver-gence as part of a plan to deliv-er cost savings and boost prof-its. a

Barra and Ghosn set to speak at World Congress World CongressWhen: Jan. 15-16

Where: Detroit Marriott at theRenaissance Center

Cost: $1,295 (through Oct. 19)

Information: 313-446-0350 or autonews.com/worldcongress

Exclusive lead sponsor: PwC

OKYO — Japan wants to commercialize �ying vehi-

cles as early as the 2020s through a government- backed campaign that already has re-cruited the likes of Subaru, Uber and Boeing.

�e country’s powerful Ministry of Economy, Trade and Industry launched the project last month with a meeting that pulled together

public agencies and private industry.�e �ight of fancy comes amid Ja-

pan’s concern that its auto industry was caught �at-footed in other emerg-ing global technology trends such as autonomous driving and ride-hailing.

�e government wants Japan to have

a leading role when it comes to per-sonal �ying vehicles.

“Globally, there is a growing interest in what is called ‘�ying cars’ that will en-able such transportation services in the sky,” the trade ministry said in a state-ment after the �rst meeting. “Japan, too, aims to achieve speedier and more con-venient transportation services for peo-ple and goods, while trying to create a new industry that can be competitive and pro�table in world markets.”

While the proposal for �ying cars has sent Japanese imagination �uttering, the concept envisioned by most hope-fuls is less like a highway-safe automo-bile and more akin to a glori�ed drone — with helicopterlike rotors and room for only one or two people.

�e ministry’s Japanese-language documents call it a �ying kuruma, the Japanese word for car. But its English-

Hans Greimel and Naoto [email protected]

T SKY MILESJapan’s government recruits Subaru, Uber and Boeing to get �ying cars off the ground

Concerned it fell behind in other mobility trends, Japan wants a leading role in building �ying cars.

see FLYING, Page 59

Saporito: Five stores accused

Melissa [email protected]

see LAWSUIT, Page 54

SEPTEMBER 10, 2018 • 41

INGENUITY UNLEASHED

Part 2 of 4: How American Car Dealers Survived the Great Recession

ETROIT — Karl Zimmermann stood reading the terse one-page letter again and again.

He was stunned. He kept waiting for the words to rearrange themselves and for the message to change.

� e letter, which arrived via FedEx on June 2, 2009, at the vast George Matick Chevrolet dealership, was the breakup from General Motors he didn’t see coming.

Zimmermann would have 18 months to close the suburban Detroit dealership he had tried several times over several years to buy from his father-in-law, George Matick Jr. Zim-

mermann had � nally succeeded in doing so just four months earlier.

� e same dealership into which he had invested everything.� e same dealership that Ed Peper, then head of Chev-

rolet, toured for nearly two hours and lauded in a 90-sec-ond video broadcast to Chevy dealers nationally in No-vember 2008 — just days after the Detroit 3 CEOs had ap-peared in front of Congress, asking for the same sort of re-lief that had been given to banks.

Zimmermann, owner-operator, recalls looking at the letter for close to two hours before his brother, Paul Zim-mermann, the dealership’s general sales manager, came

into the o� ce. Zimmermann handed him the letter.“It could have been 30 seconds, it might have been 30

minutes. But within a pretty short time, he and I both de-cided, ‘Well, balderdash’ — not quite the word we used — ‘we’re not going anywhere,’ ” Zimmermann recalled. “We’re going to � ght this thing.”

Hours later, out to dinner and unable to eat, the two thought about their strategy. � ey had 10 days to appeal.

“We realized that GM had made thousands and thou-sands of decisions under incredible duress and that they could not possibly make the best decisions or the right de-cision in all cases and this was obviously a mistake,” Karl Zimmermann said. “We had a beautiful location, a huge facility. We had great customer satisfaction scores. We had a great leadership team. I had just been approved not only to buy the Chevrolet store, but we had just been ap-proved to buy a Cadillac store.”

hen the bottom fell out 10 years ago this month, every car dealership in America was on the spot. Yet each store had its own set of prob-lems, and no two responses to the crisis were exactly alike.

� is week, we look at how eight dealership groups coped and note the two

things they all had in common: iron will and a willingness to jettison the status

quo. To pull through, these dealers and managers looked deep inside their opera-tions and deep inside themselves. Karl Zimmermann saved his Detroit

Chevrolet dealership from extinction by rounding up inventory even when General Motors stopped sending him cars. Jeremy Alicandri, head of corporate de-

velopment at a group on Long Island, turned to community outreach as a form of inexpensive viral marketing. At Porsche of San Antonio, then-General

Manager Abigail Kampmann o� ered a free ser-vice clinic every Saturday during the � nancial crisis. � e idea was to keep customers coming to the store, even if they weren’t buying. Gregory Jackson’s Detroit group

stopped accepting “no” for an answer when a � nancial institution turned down a customer for � nancing. Rick DeSilva, a Subaru dealer in northern New Jersey, applied � nancing lessons learned the hard way in the recessions of the 1980s. Wayne Siegel, a dealer in Amityville,

N.Y., looked at how to change his opera-tions from the top down. He studied met-rics and, among other things, got customer satisfaction rewards to skyrocket. Texas dealer Carl Barnett Sr. revamped

his advertising strategy, coming up with a formula to determine which ads were gen-erating leads. Omnia Fowler’s Toyota store in North Carolina � gured out how to recon� rm ser-vice appointments or reschedule to make sure no customer fell through the cracks. a

STAYING POWER

Jettisoning the status quo: 8 shrewd strategies

W

Michigan dealer survived by selling vehicles that GM wouldn’t supplyMelissa [email protected]

““We would need to make sure we could stay in operation. And in order to stay in operation, I wouldneed to make sure that nobody left. In order to keep everybody, I would need to make sure they could make

money. In order to make money, I would need to make sure that we had cars to sell.”Karl Zimmermann

DKarl ZimmermannTitle then: Owner-operatorDealership: George Matick ChevroletWhere: Redford Township, Mich. Survival strategy: When GM gave him 18 months to close, he bought hundreds of new vehicles from other dealers and continued to pay his sales staff typical commissions.

see MATICK , Page 52

Karl Zimmermann:When GM stopped shipping his dealership vehicles tosell, he bought inventory elsewhere. “We learned to sell whatever we could get our hands on,” he says.

JOE WILSSENS

SPECIALSECTIONI PAGES 41-52 I

42 • SEPTEMBER 10, 2018

INGENUITY UNLEASHED

ick DeSilva was alarmed as the Great Reces-sion was bearing down in 2008, but he also had a couple of things going for him. For starters, he had lived through two previous downturns and learned a great deal about the art and science of survival.

Second, he was sitting there with a Subaru store just as the most recession-proof of fran-chises was hitting its stride. It was the only mainstream brand whose sales increased straight through the recession.

Was DeSilva just lucky? Nope. In the previ-ous big downturn, he had placed a bet on

the little Japanese brand when its prospects were far from certain. He also picked up some wisdom in the dou-ble-dip recession of 1980 and 1981-82: not to rely too much on just one lender.

“� e [2008] recession was not as impactful on us,” he said. “It was almost more like a speed bump for us. Our numbers were pretty good.”

Quick recoveryDeSilva, 66, is dealer principal of Liberty Subaru in Em-

erson, Liberty Hyundai in Mahwah and Liberty Kia in Ramsey, all in suburban northern New Jersey. For many years, Liberty Subaru was his only store.

DeSilva said the rate of growth in new- and used-vehicle sales combined for Subaru and Hyundai declined in the run-up to the recession. (� e Kia store came later.) But sales fell outright in only one year — 2008 compared with 2007 — and they didn’t fall by much, he said.

And by 2009, DeSilva, said volume at his stores had al-ready started to recover.

Meanwhile, hard times were in full swing across the rest of the industry. When Ford dropped the Mercury brand in 2010, it created an opportunity. A much bigger Lin-coln-Mercury store went out of business down the street from Liberty Subaru, which took over the bigger location.

Subaru was keeping DeSilva’s head above water, but so

were the three lessons he learned in the 1980s: Don’t get overextended, don’t attempt to grow too fast and, above all, don’t do all � nancing through a single source — espe-cially one that’s not a captive.

DeSilva said he drummed that philosophy into his sons Rick Jr. and Michael, who are president and CEO, respec-tively, of the family dealerships.

“We don’t shoot from the hip. We plan. And we plan on what’s going to happen when the music stops,” Rick Sr. said.

For example, the business does not pay a lot of rent, rel-atively speaking. � e group owns the buildings for the Hyundai and Subaru dealerships, and rents the Kia store and a separate service center.

Hard timesDeSilva’s early career was all about navigating hard

times. He started in automotive retail in 1974, as a sales-man at Hackensack (N.J.) Ford, where his father, “Big Wes,” was service manager.

Selling was “probably the best automotive learning ex-perience of my career,” he said.

Two years later, DeSilva was on the verge of leasing

RIDING A WINNERHow one Subaru dealer turned the Great Recession into a ‘speed bump’

Jim [email protected]

RRick DeSilvaTitle then: OwnerDealerships: Liberty Subaru, Liberty Hyundai, Liberty KiaWhere: Northern New JerseySurvival strategy: Diverse � nance sources, captive � oorplan

““We don’t shoot from the hip. We plan.And we plan on what’s going to happen when the music stops.”

Rick DeSilva

One of Rick DeSilva’s lessons for his sons Michael, here, and Rick Jr.: Don’t try to grow too fast.

In the previous big downturn, Rick DeSilva placed a bet on Subaru when its prospects were far from certain. He also learned not to rely too much on just one lender.

PHOTOS BY MARK KRONOV

see DeSILVA, Page 46

SEPTEMBER 10, 2018 • 43

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INGENUITY UNLEASHED

usiness at Legend Auto Group of Amityville, N.Y., was going � ne just as the recession of 2008 started to set in.

But owner Wayne Siegel started paying extra at-tention to his operations, particularly to the emails that came in through the dealership group’s busi-ness development center.

One day, a customer emailed, say-ing they were interested in leasing a speci� c year, make and model of vehi-cle. � e customer asked several spe-ci� c questions. Would the dealership be able to accommodate this request? How much would the lease cost?

� e BDC automatically sent back its typical generic response: It thanked the customer for their inter-est and asked what questions they had. No answers to the speci� c questions the customer had asked.

A light went o� in Siegel’s head — not so much how to save his business from the pending eco-nomic down-turn, but how he should have been conducting business di� er-ently all along.

“If I’m going to have less people to talk to, I better do more with the peo-ple I’m speaking to,” said Siegel, whose group sells Audi, Nissan, Porsche and Volkswagen vehicles.

New systemsSiegel started looking at how to

change his operations from the top down. His goal was to design a system “that would work for me that I could impart to the people who work here.”

Siegel considered his own role in his dealership group and taught himself strategies to improve closing ratios. Instead of making employee cuts, he wanted to improve the work ethic of those who were already working with him — and Siegel em-phasized his employees work with him, not for him.

Siegel started looking at how to im-prove performance ratios in the BDC, analyzing the number of leads that came into the center and what percentage of those leads led to cus-tomers coming to the dealerships.

� en, Siegel considered the closing ratio of his salespeople, how they were approaching customers once they came in and how they were using cus-tomer relationship management tools to follow up. Siegel combined his self-taught knowledge and his use of met-rics to design systems and improve internal training for his sta� .

Siegel thought: “If I can do that, then the person who’s working with me would most likely appreciate that I’m investing time in them.” � eir paychecks would get bigger and turnover would drop, he � gured.

At the time, Nissan rewarded deal-erships that had the highest custom-er satisfaction index scores. Siegel

wondered why his group’s CSI scores weren’t higher. He concluded that because he had only one employee talking to the customers the group serviced each month, that employee was only able to reach a small frac-tion of customers who had visited the service department, resulting in a less accurate CSI.

Siegel realized he would need at least three employees to be able to make calls to and get customer satis-faction surveys from all of those who

were serviced . After these hires, Sie-gel’s CSI rewards skyrocketed.

Timing is everything As soon as Siegel had an idea for

business, even if it was after hours, he would write it down or call his of-� ce phone and leave himself a voice message to revisit in the morning.

Siegel asked himself question after question about his operations.

“If I went into my showroom and had my salespeople give me a pre-

sentation on a car, would I be satis-� ed with that?” Siegel asked himself. “How often do we practice what we’re supposed to do before we ac-tually do it?”

He credits coming up with new strategies to simply allocating time to spend on the process.

“What did it for me — the way in which I was able to � nd the path and processes — I started to spend more time at the store when the store was closed,” Siegel said. “I came in earlier.”

Siegel worked with his employees to rectify their unintentional lack of e� ciency, built up by accepting the status quo for years. � e recession forced him to look critically at the way business was conducted.

“It’s not an epiphany. It was just log-ic that started to kick in,” Siegel said.

“I would laugh to myself,” he add-ed. “� is really isn’t that hard.” a

RETHINKING THE STATUS QUOWith fewer customers, Wayne Siegel overhauled operations to serve them better

Wayne SiegelTitle then: Dealer principalDealership group: Legend Auto GroupWhere: Amityville, N.Y.Survival strategy: Rethink all dealership practices.

Siegel: Logic began to kick in.


B

44 • SEPTEMBER 10, 2018

INGENUITY UNLEASHED

ourth-generation auto dealer Omnia Fowler grew up in a family that knows about surviv-

ing tough times. Fowler’s great-grandfather opened a Chevrolet store in 1933 amid the Great Depression.

A key lesson Fowler has learned: When times are di� cult, focus on what you can control and run with it. Fixed operations is

one of those areas. Fowler, dealer principal of Modern Toyota in

Winston-Salem, N.C., saw trouble brewing a de-cade ago. With people losing their jobs, he knew that new-vehicle sales would su� er, even for a

strong brand such as Toyota, Fowler told Automotive News. But owners still needed to maintain their vehicles.

Ahead of the stormAs he watched sales of weaker brands fall in mid-2008,

Fowler concentrated on getting ahead of the storm. He and his team looked at employee pay plans and some managers moved back into sales roles temporarily.

With employees who had been with the company 30, 40, 50 years, Fowler wanted to keep as many as possible. Some of them started commuting 90 minutes each way to a Toyota store in Boone, N.C., after Fowler’s Modern Automotive Group acquired it in 2009.

Meanwhile, the Modern Toyota dealership team was looking at areas where the store could maintain or boost income apart from new-vehicle sales. � e service depart-ment, body shop and used cars were good candidates.

“A lot of dealers were thinking, ‘We’ve got to cut people, cut

people,’ but we strategically added people that contributed to the income,” Fowler said. “You can’t necessarily control more sales, but we can control more service, I think.”

Modern Toyota increased the sales sta� at its business development center to seven people from three, and opened what began as a three-person service business development center. � e three worked to recon� rm ser-vice appointments or reschedule, and make sure no cus-tomer fell through the cracks.

� e dealership also built a plush service lounge with a full-time concierge, trimmed waiting times and shunned the hard sell. “We were trying to be extremely soft sell on the folks,” Fowler said. “We were just kind of letting peo-ple get what they needed.”

New-vehicle sales fell 36 percent from 2008 to 2009, and used-vehicle sales dropped 25 percent. But revenue from

� xed operations was nearly � at and service started grow-ing again in 2009-10, sparking an expansion in service bays and advisers.

Eventually, the � xed operations of parts, service and

eremy Alicandri, then-vice president of cor-porate development for Habberstad Auto Group, of Huntington Station, N.Y., oversaw the opening of a $17 million facility for Hab-berstad BMW of Bay Shore in Bay Shore, N.Y. — just in time for the recession.

� e construction and launch of a new store is always challenging, but amid the worst economic downturn since the Great Depression, the pressure and uncertainty hit tenfold, Alicandri recalled.

‘Tacky,’ but attention grabbingAlicandri, now a managing director at Maryann Keller

and Associates, said that pure luck was largely responsi-ble for keeping the dealership a� oat — along with a good location, loyal premium customers and some unique marketing tactics.

Ten years later, one anecdote especially demonstrates the scope of the recession for Alicandri.

As industry sales tumbled, Habberstad BMW and other dealerships were desperate to slash advertising costs. So in-stead of buying billboard advertising, the dealership took advantage of its location alongside a highway and put a sign with massive lettering in its second-story windows.

“For a big BMW store, it was kind of tacky to be frank,” Alicandri laughed. “But it was a great way to get atten-tion.”

Habberstad BMW of Bay Shore reaped favorable pub-licity for being among the � rst green BMW dealerships in the country. And over the course of 2009, the dealership’s numbers gradually improved.

Still, “we didn’t know how quickly it would get to the level we needed it to be in order for the store to be pro� t-able,” Alicandri said. So the dealership group had to leverage the resources it had in its existing stores to en-

sure this new rooftop was a success.Alicandri, who was named to Automotive News’ 2013

class of 40 Under 40 — 40 up-and-comers under age 40 in auto retailing — was hired full-time at Habberstad Auto Group in 2009. He helped the group focus on centralizing advertising and reducing simpler expenditures, such as the number of employees answering the phones. He also employed community outreach as a form of inexpensive viral marketing.

Habberstad BMW of Bay Shore sponsored an essay contest for students in neighboring school districts. More than 10,000 students of three school districts wrote essays about why environmentally friendly or “green” programs were important for a community. Each school district’s administrator selected a winner, and Habberstad BMW of Bay Shore then gave $1,000 to each for a class party. Af-terward, the town supervisor presented the oversize checks at each school. � e contest engaged students and their vehicle-buying parents and raised awareness of the sustainable aspects of the dealership.

“Many dealers were completely disconnected from dig-ital advertising” at the time, Alicandri recalled. “It was a way to get advertising for the store inexpensively as com-pared to traditional media.”

� e new store also bene� ted when a rival, BMW of the Hamptons, closed. Because of luck like that, cost-cutting and a constant search for new e� ciencies, “we were able to make the store a success,” Alicandri said. “By 2010, it was pro� table.”

Resilient brandKnowing what he knows now about the industry and

economic patterns, Alicandri said much of the dealer-ship’s success was simply in its brand.

“We would have never built a store of that magnitude” had the group known that the recession was about to hit, Alicandri said. “BMW was more resilient than some of the other automakers. Our experience was we just happened to have a great brand. It would have been a di� erent expe-rience if we had had Chevrolet.”

� at said, the main lesson of the recession was not what brand to have in your portfolio, but to simply be prepared for anything, he said.

“� e � nancial crisis was a reminder that a day of reck-oning could come at any time and a lot of dealers have followed that as a possible indicator in future decisions,” Alicandri said. � e crisis convinced dealers “that any-thing could happen.” c

Jeremy AlicandriTitle then: Vice president of corporate developmentDealership group: Habberstad Auto GroupWhere: Huntington Station, N.Y.Survival strategy: Strong brand, good location, innovative marketing — and luck

N.Y. BMW store relied on unusual marketing, a powerful brand and being fortunateAlexa St. [email protected]

J Alicandri: “A day of reckoning could come at any time.”

BAD TIMING, GOOD LUCK

FOCUS ON FIXED OPSExpanding service, parts, body shop operations helped dealership weather the storm

Laurence [email protected]

F

For the Fowlers, auto retailing has been a family affair through good times and bad for generations. From left, Brad Fowler, David Fowler, Omnia Fowler, Fred Fowler, West Fowler, Rob Fowler and Lewis Fowler

see FOWLER , Page 51

Omnia FowlerTitle then: Dealer principalDealership: Modern ToyotaWhere: Winston-Salem, N.C.Survival strategy: Beef up � xed ops, retain staff members by reassigning them and aggressively price used vehicles at market rates.


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INGENUITY UNLEASHED

SEPTEMBER 10, 2018 • 51

body shop had a 90 percent absorption rate, meaning they were cov-ering 90 percent of total dealership expenses. � at reduced pressure on vehicle sales, although the recession also pushed the dealership to change its used-car operations.

While market-based pricing of used vehicles is common today, Fowler said that a decade ago Modern Toyota was considered some-thing of an early adopter. � e goal was to price used vehicles to sell quickly, with little haggling.

Some dealers were still holding out to make, say, a $4,000 pro� t on a used vehicle, while Fowler’s store went lean and mean, looking at something closer to $1,000 — and sharing the numbers with custom-ers so that they would feel comfortable with the deal as o� ered.

Pushing down prices also enabled the dealership to score top slots in Internet search results and pull buyers from farther away, Fowler said. By 2010, the 25 percent sales dip in used vehicles from a year ear-lier was a thing of the past. Used sales returned to pre-recession levels and eventually more than doubled as the economy recovered.

“Almost everything we did is still in place today,” Fowler said, and the dealership’s business model is more solid than ever. Gross reve-nue from � xed operations is 2.5 times higher now than in 2009, and new and used sales are sharply higher.

Being a Toyota dealer, and part of the Southeast Toyota Distributors group, also played an important role in getting through the hard times.

During the recession, Southeast Toyota Distributors sent training teams to help dealers for free, Fowler said.

Modern Toyota took some of that advice to reduce reliance on deal-er reserve, the fee that the dealership receives for arranging auto loans, as part of its � nance and insurance operations. Instead, it re-lied more on F&I products, such as extended service plans.

One of the pillars of the dealership’s survival during a period of $4 a gallon gasoline prices was also the Toyota trinity of reliable, fuel-e� -cient vehicles at the time: the Camry, Corolla and Prius.

� e products have changed, Fowler said, but the brand’s advantage over others has remained the same. “We have such a phenomenal lineup. I have a high level of con� dence we’ll be OK as a Toyota deal-er in any market.” a

FOWLER continued from Page 44

“We cut advertising by about 50 percent. Digital wasn’t what it is today.”

What really helped is that his accounting o� ce sta� s at both deal-erships were cross-trained to do various jobs.

For example, if the payroll clerk was on vacation or out sick, the title clerk could handle payroll duties. If the title clerk needed to be o� , the billing clerk or o� ce manager would step in.

If an o� ce sta� member quit, they weren’t replaced; their former colleagues picked up the slack.

“If somebody wasn’t there, there wasn’t going to be any overtime. If somebody left, we didn’t go out and look for some-one [to replace them] right away,” he said.

“� e volume wasn’t there, so we just shared the positions in the o� ce. � ey would ‘share the chair,’ as we call it.”

Barnett gives a lot of credit to his controller, Sue White, who is in charge of training and man-aging the group’s o� ce sta� s and who pitched in to help get things done, something she still does. White started as his secretary-trea-surer in 1991.

In hindsight, Barnett said his sta� probably didn’t like taking on more work. But they were dedicated, loyal and understood what was at stake.

Barnett said he also made it a point to talk to each employee indi-vidually and let them know that he appreciated their extra e� ort.

“As team players, they got it done,” he said.� ough his new-vehicle unit sales in the � rst six months of this year

exceeded year-ago sales, Barnett’s gross pro� ts are lower. Public dealership groups reported lower gross pro� ts in their 2018 second quarters, too.

But having successfully navigated the Great Recession, Barnett feels he is even better equipped to handle the next downturn, which he be-lieves could be just around the corner.

“We’ve had a real good run,” he said. “History repeats itself. It’s [a downturn] coming.” n

BARNETT continued from Page 45

“ ““We’ve had a real good run. History repeats itself. It’s [a downturn] coming.”Carl Barnett Sr.

52 • SEPTEMBER 10, 2018

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INGENUITY UNLEASHED

Looking back, there may have been some warning signs about Matick Chevy’s position in the eyes of GM, which had to cut even deeper in light of its pre-carious � nancial position and its restructuring plans.

Zimmermann had worked throughout 2008 and into 2009 to buy a Cadillac store in Detroit owned by Sonic Automotive Inc. In April, the regional head of Cadillac approved plans to co-locate the Cadillac dealership at the George Matick Chevrolet site. But a month later, Zimmermann received a call from Ca-dillac that the deal was o� .

And on June 1, 2009, the day GM � led for Chapter 11 bankruptcy, Paul Zimmermann called his brother just before he was about to tee o� at an annual golf outing for the Michigan Automobile Dealers Associ-ation in Lansing. Paul had gotten a call from a friend tipping him o� that their dealership � le had moved to the bad pile from the good pile over the weekend.

While Zimmermann still doubted George Matick Chevy was on the closure list, if it was, he wondered, what would he do? Fight, he surmised.

“We would need to make sure we could stay in op-eration. And in order to stay in operation, I would need to make sure that nobody left,” he recalled. “In order to keep everybody, I would need to make sure they could make money. In order to make money, I would need to make sure that we had cars to sell.”

Paul said he would handle selling cars and moti-vating the team. He told Karl to � gure out how to keep the franchise.

For 10 days, Zimmermann hardly slept. He said he lost 40 pounds within weeks. And while George Matick Chevy lost its appeal, a GM rep encouraged him to continue to make his case.

Staff meetingSoon thereafter, he called a dealer-

ship sta� meeting.“I said, ‘� e good news is George

Matick Chevrolet is going to be here for another 40 years,’ ” Zimmermann said. “I said, ‘� e not-so-good news is GM doesn’t yet agree with me.’ ”

Zimmermann, who had worked at the dealership since 1993, thought half of the team might walk out. No one did. Instead, many came up to hug him. He said they knew about his commitment, having just put all of his money and pledging his assets to buy the dealership.

“I almost have tears thinking about it,” said Zim-mermann, recalling those dark days. “It was just un-believable, the loyalty and dedication and the quali-ty of the people that we have here.”

But GM had cut o� new-vehicle inventory from the factory as part of its notice to the dealership.

Zimmermann turned to his peers and asked them to order as many vehicles as they could from GM and he’d buy whatever they didn’t need. During the federal cash-for-clunkers program, his inventory was stripped bare. Several of his peers wouldn’t re-turn his calls, while others said they needed the ve-hicles themselves.

“I had made a deal with a number of dealers and I only had one that followed through on it: Joe Lung-hamer,” Zimmermann said. “To this day, my kids know his name because we are so grateful to him because he honored his commitment.”

Truckloads of vehicles were dropped o� . In all, 68 were purchased from Joe Lunghamer Chevrolet, just west of Pontiac, Mich.

‘Heaters and a key’“� en we started buying cars from all over the

country,” Zimmermann said. “What we were buying was everything that nobody wanted, so we called them heaters and a key.”

Zimmermann received just three 2010 models from the factory — new Camaros already promised to customers. � e store acquired hundreds of new 2010 Chevys from dealers across the U.S. — $125,000 Corvettes, Sonics with stick shifts, vehicles in odd colors and with no options, Zimmermann said.

“We learned to sell whatever we could get our

hands on,” he said.� ose vehicles were costly — Matick Chevy paid for

shipping, while the other dealer got to keep � oorplan-ning credits, prep money, advertising co-op money and sometimes more, Zimmermann recalled. He also adjusted compensation for sales sta� members so they received commission just as if it were a new fac-tory vehicle even though the dealership had already lost 60 to 80 percent of the new-car pro� t margin. But Zimmermann said that helped him keep customers and a sales sta� . And, he pointed out, he could show GM that even though the factory wasn’t giving him ve-hicles to sell, he was still selling them.

Some layo� s were necessary as business slowed. When he took over the dealership, Zimmermann said it had about 75 employees. In February 2009, a half dozen people were let go. By June of that year, he had 56 sta� ers.

Arbitration alternativeIn December 2009, Zimmermann got a gift of

sorts: President Barack Obama had signed a mea-sure into law that gave dealerships the right to seek reinstatement through neutral arbitration.

Zimmermann spent the week between Christmas and New Year’s interviewing lawyers and preparing for arbitration — something that ultimately didn’t happen.

Instead, in March 2010, GM o� ered him a perfor-mance agreement in lieu of arbitration that would give him back his franchise conditionally. He would be required to sell a certain number of vehicles in 2011. GM couldn’t tell him the exact count at the

time, saying only that it would be a percentage of whatever the overall market was at the time. He’d learn by mid-2012 if he had the franchise back and if so, would have 24 months to bring his store into com-pliance with the automaker’s latest brand image requirements — a multimillion-dollar expense.

Zimmermann said he got GM to give him three months of inventory, which he would need to meet the ex-pected sales targets. He signed the agreement in May 2010 and received the � rst vehicles from the factory in September — after a 15-month drought. He ramped up advertising that fall, so that when January hit, sales were rolling as the clock started.

Matick Chevy in 2008 sold 885 vehicles. In January 2009 — the only month the dealership wasn’t pro� t-able during the recession — it sold only 35 new vehi-cles, Zimmermann said. � e dealership sold 642 new vehicles that year and in 2010 that � gure climbed to 824.

Zimmermann won his dealership back condition-ally in 2012 and worked quickly to renovate the 108,000-square-foot store to meet Chevy’s standards. And in 2014, he had his full franchise rights restored.

Recovery, expansionToday, Matick Chevy is one of the top Chevy deal-

erships in the country, with about 190 employees. Last year, it ranked No. 7 of about 3,000 Chevy deal-erships based on its more than 4,300 new-vehicle sales. At the time of the recession, the store had ranked in the top 230, Zimmermann said.

Matick Chevy has continued to expand, adding a 38,000-square-foot body shop on four acres near the store. � at plus the dealership improvements cost $9 million. In June, it opened a $7.5 million, two-tunnel Matick Auto Wash adjacent to the dealership.

In 2016, Zimmermann also added a Toyota fran-chise, the former McInerney Toyota, also in subur-ban Detroit. He moved it to another suburb, spend-ing about $2 million to rehab a former Hyundai dealership and renamed it Matick Toyota. He is us-ing the former dealership site for a Toyota Certi� ed Collision Center.

Zimmermann, stopping near the service depart-ment at Matick Chevrolet, points to a display case full of Dealer of the Year and GM Elite Dealer awards the store has won since he nearly lost his franchise.

“We became much stronger as a result,” he said. “And as awful as it was, the whole experience was � lled with blessings, mainly appreciating the bless-ings we do have in our lives.” a

MATICK continued from Page 41

JOE WILSSENS

Documents

$159/YEAR; $6/COPY pipeline MAIN EVENTb776141bb4b7592b6152-dbef5d8ae260c3bb21474ba0e94bcba6.r94… · motive, which consists of eight dealerships and 11 franchises. His market area