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Industry Profile: N.C. Auto Dealers
Learn more about the business
Women Steer Industry
Toward Diversity
Three Dealers Honored as Role
Models
Community Service Drives Dealers
Fuel
Injectors
Zero interest financing and generous rebates
helped keep America's economy rolling after Sept. 11
 By
Lisa H. Towle
Normal
life in the United States screeched to a halt on Sept. 11, 2001. Barely a week
after the unprecedented terrorist attacks on American soil had left thousands
dead and injured and sent the country’s already shaky economy into a tailspin,
an unlikely white knight rode to the rescue — the nation’s auto industry.
With the encouragement of
top Washington officials, including White House Chief of Staff Andrew Card, once
a vice president at General Motors and head of the American Automobile
Manufacturers Association, the Big Three automakers — GM, Ford and
DaimlerChrysler — emerged with plans to keep the wheels of the economy moving.
General Motors, the
world’s largest manufacturer of automobiles, was the first to develop a bold
incentive program that would, without offending the grieving public, bolster the
confidence of consumers who were uncertain about the appropriateness of making
purchases. Known as “Keep America Rolling,” it involved zero percent
financing and cash back offers more generous than at any time since such
programs began in the 1950s. Ford and Chrysler followed suit.
The idea, according to one
auto executive who was quoted at the time, was to “get people off their
couches watching CNN and get on with life.” It worked. Shrugging off worries
about the stock market and job cuts, consumers have thronged to car dealerships
to take advantage of the sweeping no-interest-financing offers. Industry
watchers are predicting that 2002 will be nearly as strong for the auto market
as last year, which was the second best in U.S. history.
Speaking to the Financial
Times of London in August, Sean McAlinden, chief economist at the Michigan-based
Center for Automotive Research, noted, “They (the carmakers) are bankrolling
this very tenuous, fragile recovery.”
Pedal
to the Metal
Domestic carmakers and
sellers recognize that the incentive-driven sales frenzy won’t last
indefinitely. But there’s still room for more boom, and the retailers plan to
make the most of it while they can. Though manufacturers have cut dealers’
margins over the years by charging them more for cars, dealers lately have been
able to make that up because big rebates and cut-rate financing mean fewer
people are inclined to haggle over the price of a car. Moreover, they are
anticipating a strong start for 2003 models because brisk demand has wiped out
much of the 2002 inventory.
That’s good news for North
Carolina for many reasons, says Robert Glaser, president of the North Carolina
Automobile Dealers Association. In the Tar Heel state, he says, new vehicle
sales total $11 billion a year. And, he adds, “the state makes more money on
the sale of a new car than the dealer does. Think about it … for every new car
or truck sold by a franchised dealer, $705 in federal, state and local taxes is
directly generated.”
James Barber, whose Madison
dealership, Barber Chevrolet, continues to employ 48 people, agrees. “If you
look at the condition of North Carolina’s economy in general and the number of
jobs we’ve lost over the last year in particular, I’d say we’re very lucky
the (auto) manufacturers took an aggressive stance to keep business moving.”
The location of Sander’s
Ford near the Camp Lejeune Marine Corps base in Jacksonville and a plethora of
manufacturer incentives, including a “military appreciation rebate,” have
worked to the advantage of Matt Raymond Jr. Robust demand — July 2002 was the
biggest sales month ever in the history of the dealership, the oldest in Onslow
County — means the dealer-operator hasn’t had to lay off any of the 100
employees at his two stores (there’s a second dealership in Swansboro). Nor
has he had to cut back on advertising or contributions to a long list of
charitable and community causes.
“I feel good about what
our industry has done for the state and the nation,” says David Farris,
immediate past chairman of the NCADA. “Without the incentive programs of the
Big Three, the misery index of our people and financial markets would have been
incalculable.”
Service
with a Smile
If no-interest loans keep
the stream of buyers flowing into dealerships, it’s good customer service that
keeps them coming back. Auto dealerships are receiving steadily improving marks
among new-car and light-truck shoppers, according to independent national
surveys.
For instance, a 2002
Consumer Reports annual reader survey on dealership satisfaction, published last
spring, found that 93 percent of new-car buyers ranked their overall buying and
dealership experiences from “very” to “moderately” satisfied. Such a
positive finding for the auto retail industry stands in contrast to the
“rampant” problem of poor customer service in many retail and service
industries, as reported by the research group Public Agenda in a survey released
this year.
Capital Ford in Raleigh is
the top Ford dealer in the Southeast and is one of Ford’s Top 10 dealerships
nationally based on total sales and customer service ratings. More than 60
percent of its business comes from referrals and repeat customers. It’s not
just coincidence that those impressive numbers grew right along with the a
commitment to service and technology.
Expanded service hours
—7:30 a.m. to 10 p.m. Monday through Friday and 7:30 a.m. to 3:30 p.m. on
Saturdays — began as a way to accommodate fleet owners who wanted to minimize
idle time. “From there we decided to get creative,” says Tim Michael,
Capital Ford’s president and CEO.
The list of innovations
includes:
Express service for
customers who have purchased a vehicle from Capital Ford that needs simple
maintenance or repairs;
Providing pagers and
shuttle service to nearby shopping centers or theaters for customers who’d
rather wait elsewhere during the maintenance or repair process;
Twice a month new-owner
clinics featuring technicians who talk to customers about the care of their
vehicle;
Audiotapes made by the
technicians for the customer’s repeat reference explaining what work was done
and why.
Everyone in the business of
auto retail agrees that a good service department staffed with qualified
technicians is a dealership’s lifeblood. That’s why Capital Ford invested
$4.5 million in a state-of-the-art service facility and filled it with 60
technicians. Sixteen years ago, Marty Simpson went to work for Parkway Ford in
Winston-Salem as a shop foreman. Since then he’s seen the number of
technicians grow from 11 to 32 and their training and tools get infinitely more
complicated and expensive.
Diagnosing a vehicle’s
problem, says Simpson, now Parkway’s service manager, will “most likely
involve a $60,000 piece of equipment and the ability to analyze large amounts of
data.”
He continues: “It just
reflects the fact that cars today are mobile computers. Understanding them
requires an inquisitive mind and sensitive hands.”
Gone are the days of the
“grease monkey” and shade tree mechanic. Currently, there’s a shortage of
12,000 automotive technicians nationwide. NCADA is working with the North
Carolina Department of Public Instruction, the Division of Community Colleges
and Automotive Youth Education System (AYES) to improve automotive education in
the state and meet the growing demand for technicians.
Toward that end, the
association has established five objectives that it plans to concentrate on over
the next few years. Among them:
Certify all 160 North
Carolina high school automotive education programs in at least two National
Automotive Technical Education Foundation (NATEF) areas by Dec. 31, 2003, and
all 45 community college programs in at least four NATEF areas by the end of
2004. Twelve AYES schools should also be certified by Dec. 31, 2003;
Create an apprenticeship
program in dealerships across the state for technician candidates;
Raise awareness among
students and high school teachers of the benefits that accompany careers in
automotive technology.
There’s one surefire
attention-grabber about the benefits a career in automotive technology: Once
master certified, a technician can command a salary of $70,000, $80,000, $90,000
or more.
Harold Wells, who sold
automobiles for nearly five decades before going into semi-retirement earlier
this year, believes that whether someone is selling cars or repairing them, a
passion for the work is what it’s all about.
Notes Wells, who recently
received the Order of the Long Leaf Pine for his service to the state of North
Carolina, “Passion for the business is what has kept North Carolina and its
dealerships moving ahead and ahead of the rest.”
 Women
Steer Industry Toward Diversity
Cars,
they’re not just a guy thing anymore. Industry
analysis by the National Automobile Dealers Association (NADA), shows that women
are altering the competitive landscape for new-car dealerships. They are a
presence to be reckoned with both on and off the showroom floor. For example,
studies show that women either influence the purchase of, or actually buy, 60 to
80 percent of the vehicles in the U.S.
And there’s a reasonable
chance that the person selling the car to a woman is another woman. About half
of the nation’s franchised car dealerships have at least one female
salesperson, and the total number of automotive saleswomen in the industry is
now estimated at 17,300.
At NADA’s Dealer Academy,
which offers training programs for future dealers and managers, 20 to 25 percent
of the students are female — a figure that has risen steadily over the past
decade. In 2001, 74 percent of the country’s franchised car dealerships had at
least one female manager, up from 70 percent the year before. Nationwide,
females comprise 17 percent of all managers at dealerships.
Bonnie Hunter of Charlotte
is a trailblazing member of this sorority. When she entered automotive retailing
36 years ago in Pennsylvania it would have been easier to get blood from a rock
then find dealerships working to create more opportunities for women, including
offering flexible schedules and child care benefits. Nevertheless, the young
wife and mother with a head for numbers took an immediate liking to the work.
Within three years she had made her way from clerical positions in the service
and warranty departments to office manager.
Then in 1971 she got a phone
call that would change her life. Dick Keffer, a car salesman she had worked with
in Pennsylvania, was in Wilmington where he had purchased his first dealership.
He needed a business manager. Was she interested? Knowing that the dealer for
whom she was working — nice as he was — would never have a woman in a job
that gave her authority over men, Hunter and her family headed to coastal North
Carolina. In 1974 they relocated to Charlotte so she could serve as business
manager for another of Keffer’s dealerships. By 1979 she was a dealer-owner in
Rock Hill, S.C. A year and a half later, missing the pace of a larger city and
business, she sold the dealership and returned to Charlotte as general manager
of Dick Keffer Pontiac GMC.
Today, Hunter is president
of Keffer Management Co., which has interests in nearly two dozen dealerships
from Florida to North Carolina. In the greater Charlotte area alone, Keffer
Management owns and controls six stores and employs 275 people.
“I know that in the
beginning Mr. Keffer (now the chairman of the company that bears his name) took
some chiding for having a female manager. But all he’s ever been interested in
is performance. He believes, as I do, that gender shouldn’t matter if you can
do the job,” says Hunter.
Like Bonnie Hunter, Barbara
Bush of Lenoir believes that increasingly talent and worth ethic, not gender,
are what it’s about in the world of franchised dealerships. It’s a world she
grew up in; her father, “Rooster” Bush, started out as a used car dealer,
then got a new-car franchise in 1956.
As a teenager she washed the
cars at Bush Oldsmobile Pontiac GMC. Over the years, including the period she
spent at Lenoir-Rhyne College earning degrees in psychology and sociology, she
worked in various departments, including sales. Long term involvement in the
dealership wasn’t part of her plan, though. Then on a Sunday night a few years
after her 1978 graduation, her father came to her and said he needed a sales
manager, he wanted her to fill the position, and, oh yes, she could start the
next day. Eventually she was promoted to general manager, and a year ago she
became dealer-operator of the business, whose name has been shortened to Bush
Inc.
It is difficult, given the
sensitivity to questions about ownership issues, to know precisely how many
franchised new-car dealerships have female principals. A recent survey of NADA
members has led the association to estimate there are 617 nationwide: 376 east
of the Mississippi and 241 west of the river. The North Carolina Automobile
Dealers Association calculates that about a dozen women are working as
dealer-principals in the Tar Heel State, while a “handful” of others are
“significantly involved” in the running of a dealership.
Bush believes that “on the
whole, women are naturals for this business given their stamina, organizational
skills, and ability to read people.” Of Bush Inc.’s 31 employees, six are
women. Among that group, one is flexing her sales muscles.
People like Hunter and Bush,
Linda Leith of Leith Inc. in Raleigh, Cindy Mynatt of Ben Mynatt Chevrolet
Oldsmobile in Concord, and Natalie Tindol of Gastonia’s Earl Tindol Ford, lead
by example. The success of their businesses drives home a message. That message,
offers Bonnie Hunter, is that “women can take good care of customers and
employees and be car savvy.”
Meanwhile, the next
generation watches and waits. Will Barbara Bush’s daughter follow in her
mother’s footsteps? “Who knows?” says Bush with a laugh. “But she
certainly loves to come down here and hang out. And she’s definitely got the
personality for it.” — Lisa H. Towle
Three
Dealers Honored as Role Models
Harold Wells of Whiteville began his career as a boy selling bicycles. By 1956,
he had progressed to his own franchised new-car dealership, an enterprise that
would ultimately grow to include multiple stores. As his business expanded so
did his involvement in industry issues. The ultimate acknowledgement of Wells’
expertise and leadership capabilities came with his election as president of the
North Carolina’s Automobile Dealers Association (NCADA) and then chairman of
the National Auto Dealers Association.
This is all to say that
Wells knows the business of automobile retailing inside out. So he’s
believable when he states, “Quite frankly, from a national point of view North
Carolina is looked on as having some of the finest dealers in the world and one
of the best-run dealer associations.”
The Pacesetters
The NCADA recognized three
members with Lifetime Achievement Awards this summer. The honor goes to
franchised dealers who have “contributed significantly to the automotive
retailing industry throughout their career.” Below are profiles of the award
recipients.
Carey Ilderton Sr.: In 1945, Carey Ilderton returned to High Point
from World War II and service in the U.S. Army Air Corps. Waiting for him was
his wife Eleanor, whom he’d married before shipping out three years earlier,
their child she had borne while he was away, and a job at his father’s
dealership.
Over the next 30 years they
busied themselves with building a life. Eight more children would join the
family. Ilderton’s volunteer work on behalf of everything from charities and
the city of High Point to civic and fraternal organizations helped improve the
social and economic climate of his community. And he worked in and managed every
department of the dealership, developing an understanding of how to operate a
successful business.
In 1971, he became president
and owner of Ilderton Dodge Chrysler Plymouth. The following year, at the
request of the state of North Carolina, he began researching the issue of
transportation for physically challenged people — an underserved market.
Ultimately, this would lead to the creation of the Ilderton Conversion Co.,
which builds and sells specially modified vehicles for individuals and mass
transit in multiple states.
Ilderton, who has chaired
the Dodge Dealer Council and led Dodge’s advertising association, has also
served as secretary, vice-president and president of the NCADA. Three of his
children are now involved in the family business, which has been designated a
five-star dealership by DaimlerChrysler.
Dick Keffer: Dick Keffer
began his career in automotive retailing in 1961 as a salesman at a Chevy store.
Ten years later an investor put up most of the money for a dealership Keffer
wanted to own. He ran the store and from its profits bought out the silent
partner’s interest.
Now, as chairman of Keffer
Management Co. in Charlotte, he affords others the opportunities he had to be an
entrepreneur. People with a desire to enter the dealer ranks are hired and
placed in one of Keffer’s Charlotte-area franchises. After they’ve
demonstrated that they have the feel and requisite fire in the belly for the
work, Keffer sends them forth, completely funding a store that they run. Just as
was done for him, the loan is repaid from the dealership’s profits.
Typically, such a buyout
takes 10 years. Once it’s completed the owner possesses the franchise 100
percent and has no further obligation to Keffer. The only thing he asks is that
“someday they help another person get started in the business.”
Giving back is a theme that
runs through all aspects of the life of this family man and former Marine. A
member of the Charlotte South Rotary, the Charlotte Business Council, the Marine
Corps League and the Knights of Columbus, Keffer also sits on the board of the
Boy Scouts of America. In addition to having served as a vice chairman of NCADA,
he is a NCADA “AutoPAC All Star” and member of the AutoPAC Board of
Directors.
Carroll Stearns: Carroll
Stearns’ life is the stuff of which movies are made. After his mother died
when he was a young boy, he was sent off to military school and shuttled between
relatives before settling with his grandparents in Burlington. At the start of
World War II, he joined the Air Force, flew a P-51 Mustang, was shot down over
Holland and spent the next 10 months eluding capture by the Germans with the
help of the underground resistance before making it home to Alamance County and
his bride, Norma.
In 1952, having completed
military service and then working as a seller of furniture and home appliances,
he joined a Buick dealership as a salesman. Nine years later he borrowed $25,000
against his house in order to raise enough money to become a partner in a Ford
store in Graham. Today, there are four dealerships in Burlington and Graham
under the umbrella of C.A. Stearns Co., of which Carroll Stearns is president.
Three of his four sons are now also contributing to the business and community.
Each one, having made their way up the managerial ladder, is in a leadership
position at a different dealership.
Head of the Class: Four years ago, Robert Glaser, president of the
NCADA, called Phillip J. Kirk Jr., president of NCCBI and chairman of the State
Board of Education, to see about scheduling a meeting. Shortly thereafter, the
men got together for lunch and the question du jour was, how, as businesspeople,
could the state’s auto dealers further public education in North Carolina?
What, replied Kirk, would
the dealers think of recognizing the Teacher of the Year by giving them a new
car for the duration of their term? Glaser took the idea to the NCADA’s board
of directors, where it was met with overwhelming enthusiasm.
The board voted to make the
car a permanent gift to the teacher, not just a loaner; to pay the taxes on it
so a financial burden would not be created; to host a black-tie gala for the
Teacher of the Year finalists, at which the winner is presented an automobile of
their choosing; and to create and widely distribute a poster featuring all the
candidates for Teacher of the Year.
“We get consistently
positive feedback about this program. It’s a big deal and it’s more than
ceremonial,” says Mike Ward, superintendent of North Carolina’s public
schools. “We expect a lot of our Teacher of the Year … and the car,
literally, helps them get to where they need to be.”
For example, Melissa
Bartlett, the 2002 Teacher of the Year and winner of a black 2002 Nissan Altima,
will take a one-year sabbatical from her classroom at Statesville High School.
During that time she will travel throughout North Carolina to speak to
educational and civic groups, serve as a policy advisor, present staff
development seminars to fellow educators, and promote careers in education.
“To my knowledge, no other
state has a business group that goes the extra mile to recognize their teachers
in this way,” says Kirk.
That may be changing,
however. Glaser, inspired by the success of the NCADA’s “bridge building”
(between the auto industry and education), has furnished his fellow automotive
trade association executives with information about the program and encouraged
them to do something similar. -- Lisa
H. Towle
Community
Service Drives Dealers
In a year darkened by declining revenues, budget cuts and layoffs, a beacon of
economic hope and stability has been auto dealerships. Consider that while
dealerships represent just two percent of all retail establishments in North
Carolina, they have continued to produce more than 21 percent of the retail
sales tax collected by state government. Consider further that dealership
payrolls represent 11 percent of the total retail payroll in the state, and each
franchised new-car dealership in North Carolina gives, on average, $10,500 a
year to charitable or community causes.
Most often, the people
behind these numbers fall into one of two broad categories: members of a family
that has been a part of a community for generations, or newer owners of
established stores known for contributing to the growth and health of rural
areas.
In Winston-Salem, the
dealership established by Oscar Fowler in 1933 has grown beyond his imagining.
Today, the Modern Automotive Network, lead by his grandsons (Fred and Robert)
and great-grandsons, includes seven dealerships (with an eighth on the way) and
employs more than 500 people.
“With us, 25-year
employees are so common we don’t even think about it,” says 62-year old Fred
Fowler. “We have children of employees coming to work for us now. We’re
right proud of that.” They’re proud, as well, of a benefit program that
contributes up to $250 to qualified organizations in which employees
participate.
To the east, in rural
Richlands, is another example of a dealership whose longevity has provided
stability for the town and security for the consumer. Richlands Motor Sales has
been in the same spot for 64 years. When Fred Mitchell bought the new-car
dealership in 1983 he appreciated its high profile in Richlands, and was
determined to keep it. Of his 13 employees, one has been on the job 40 years. He
personally addresses customers’ questions and concerns, spends $20,000 to
$25,000 annually on advertising, participates in service clubs and supports
local youth activities.
“If someone needs a car for a parade, food for the football
team on game night, or a sponsor for the Little League baseball team, they call
me,” explains Mitchell. “And that’s fine, because we have a wonderful
community here and want it to stay that way. The stronger Richlands is, the
stronger my business is.” —
Lisa H. Towle
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