Is Your GM the Right GM for Your Bottom Line?

By Dennis McGinn from AutoSuccess

​Lots of folks suit up to look the part. Unless the general manager of your dealership looks the part and plays that role hard, though, with passion and an enduring commitment to excellence, your dealership will not be great.

GMs fill big shoes. They cover a lot of acreage in their responsibilities — staying atop of each requires structure, time management, planning, relational skills — and a strong competitive nature.

Like a good controller, the GM protects your assets. They keep the wheels on and the boat afloat — and the best ones also lead the charge.

Careful management, as prudent as it sounds to the ear, isn’t necessarily the management you want for your business. The industry is full of careful managers. They dip toes in the water. They solicit inventories of opinions. Meanwhile, amidst their pondering and evaluating, the horse leaves the barn, the window closes, the opportunity moves down the street.

Rust Never Sleeps

A great GM is a closer — sees opportunity and seizes it or directs others to do so. Is this your GM? Has your GM laid out a crisp and structured vision for your dealership? Has your GM prepared your staff to capture this vision? Is he or she an exhorter, a motivator — and a “helping hands” kind of GM?

The Peter Principle theory says “managers rise to their level of competence.” Contemporary sage Tommy Gibbs says great leaders never allow themselves to stay in their comfort zone because they recognize that getting comfortable is one step closer to failure.

It’s time to ask yourself — Is your GM the right GM for your bottom line?

GMs and Recon

Scroll down the GM’s job description. Right below “evaluating used car aging” is the most important and influential responsibility a GM can master: reconditioning oversight.

Really? Recon oversight is a dealer’s greatest opportunity to flow more margin to the bottom line and it is listed among the GM’s duties as… an afterthought? Does your GM see the potential here — one increasingly important as new car sales taper off and CPO and other used cars take center stage for the next few acts? Unless managed closely and activities accounted for carefully, the dealership recon function can become like the proverbial rug hiding all sorts of nasty, ugly things like:

  • Patterns of appraisals that buy for too much or require extensive recon to retail profitably.
  • Retail labor and parts and other departments that brush some cost burdens off onto recon.

GMs Say…

In too many dealerships, recon is still run by spreadsheets, whiteboards and seat-of-the-pants organization and accountability. Misplace a car on the lot or take too long to get it from intake to the sales lot and that sucking sound is your money rushing down the drain.

Recon is a complex part of your business — more so than many GMs and their principals want to recognize. However, hundreds of dealers know now that, when operated using proven time-to-market (TTM) recon workflow technologies and tactics, recon centers:

  • Achieve regular three-to-five-day time-to-market cycles. When first starting the use of TTM software, many dealers assume their recon cycle is already three to five days; the software instead shows them to be operating at a costly eight- to 15-day cycle instead.
  • Reduce recon times. Cutting recon time by 2.5 days increases inventory turn by one. Shave five days and gain two turns. What might two additional inventory turns a year mean to your bottom line?
  • More cars sold at higher margins within the magic 30-day window.
  • It’s not just me claiming these advantages. It is also visionary GMs and dealers who understand the writing on the wall and who take action:

    • “If the GM isn’t involved in one of the highest profiting departments in the store, you might have the wrong GM,” said Tom Dunn, general manager for the Fred Martin Superstore in Barberton, Ohio.
    • If you don’t care about improving reconditioning, why should your staff?” said Edward Hyde, dealer principal of the Legacy Auto Network in London, Kentucky.
    • "I’m talking major amounts of money to the bottom line, the kind of money that would make you sick if you knew you were missing out on that,” said Joe Seppa, GM of Morrie’s Nissan, Subaru and Bodyworks in Brooklyn Park, Minnesota.

    GMs who give the right priority to recon enjoy faster TTM, reduced friction among associates and, because they get cars frontline ready faster, improve inventory turn and gross margin.

    Is your GM the right GM for your bottom line?

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