Sucker Punch

When I arrived in Atlanta in 1982 with my mattresses tied to the roof of my 'buy here- pay here car', you might say I was 'street tough' and 'world wise'... certainly not the warm and fuzzy, cuddly, kinder gentler Ziegler you've all grown to know and love. I used to say we couldn't have a class reunion till all of my friends got out of prison.

If I hadn't met Debbie, you wouldn't be reading this today. my life would have taken a different path.

 

Two years earlier I was a participant in The Battle of the Toughest which evolved into the UFC. Of course, I have to admit I lost... totally knocked out unconscious in 45 seconds of the first round... BUT, you know, there were 25,000 people in the Jacksonville Coliseum that night... only twenty of us were in the ring. In real life how many spectators criticize the gladiators?

 

Later that evening I was in a nightclub sort of celebrating with some of the car salesman I worked with who had supported me and chipped in for my training supplies. A lot of back slapping, laughing, and conversations about what I should have done (from spectators) ...and jokes about how to film a 45 second Ziegler fight.

 

Right in the middle of this warm gathering of friends some "Jackwagon" walks up to me...never seen him before...and this idiot says to me...

 

"Saw you fight tonight, you ain't worth a damn" ... I WON THAT FIGHT.

You see, Jacksonville is not necessarily the most gentile place to grow up... especially on the west side. Rusting cars and smoke-filled bars... there was definitely another Ziegler before you knew me.

One thing I knew from vast experience about bar-fighting is...

 

"Once you know it's going to happen, don't stand there and hold a conversation"

How many times have I seen some fool standing there making a speech about what he's going to do to me? While he's still talking trash I've already ended this conversation while he's still in mid-sentence.

Some time when I've had a few, ask me to tell you some stories about back in the day. I promise you'll laugh.

 

True Car

Just exactly what was this guy, Scott Painter, thinking? He holds interviews with everyone who will give him a little ink or shove a camera in his face...and he pompously brags about how he's going to disassemble the retail car business, commoditize the product, and tells dealers to get rid of other vendors...his company goes rooting around in your DMS gathering your customer data...which he's already announced (sort of) he's going to use to put you out of business...

 

This man and his company are all about destroying your dealerships and replacing it with his own warehouse brand.

 

AND, part of the plan is to put all of the other vendors out-of-business. Control the used car prices and control the financing. I believe this from all of the signs we're seeing...

 

Then, somehow, he raises another $200 million and gets Mike Maroone, president of AutoNation, on the board of directors... AM I the only one who thinks something stinks here? He brags about how many companies he's started... I'm thinking... "Couldn't Hold a job Big Guy?"

 

We all know you were sort of gone from Cars Direct with a little walk-way pocket change money... they marched you out with a little kazoo music, didn't they? Maybe that's a little too harsh and perhaps incorrect... I'll research some more and see if that's correct.

 

People think I have an ego? (whatever gave them that impression?)

 

This guy appears to me to be mega-deluded on steroids... at least that's the impression I get. What do you think?

 

I think that he thinks he's a visionary. I think he's a jerk. He speaks with such authority about how he's going to change the business model of the retail automobile business and bring everybody down that isn't him.

 

OKAY...Here's the bar fight analogy... This guy Painter, so full of himself, he's standing there telling us everything he's going to do to us AND doesn't realize that we're not going to take it.

 

While he's still talking, I'm thinking okay, now, let's take it down. BOOM.

 

There is a serious superiority complex happening somewhere here.

 

NOW, all you stupid dealers and managers pay attention...I sincerely believe Mr. Painter is telling you what he plans to do to you...with your help of course... he can't destroy you without your help you know?

 

Truthfully, in my heart of hearts, I think he's a zealot with multiple hidden agendas to massage an ego that even I can't begin to compete with.

 

Can't explain exactly why BUT, the word "Twerp" keeps coming to mind.

 

I believe TrueCar and ZAG are the worst threat to the retail automobile dealer we've ever faced. Do not allow them access to your Data.

 

Please read my blogs on ADM Community and Dealer Elite and read what others are saying... These blogs have had 25,000 page views so far and still going...

 

http://www.automotivedigitalmarketing.com/profiles/blogs/true-car-a...

 

OR...

 

http://www.dealerelite.net/profiles/blogs/true-car-and-zag-cyber-ba...

 

I just got back from my last trip of the year. Three million frequent flier miles with Delta Airlines... five million miles if you count the old miles before they began the program. I'll be home with Wife and Zach and Puppy until the end of January after Internet Battle Plan.

 

Last week I was consulting and training in two Toyota Dealerships in two states, Indiana and New York.

 

I work with a lot of Toyota dealerships and this trip was different...

 

First of all they had inventory. There were cars on the ground. For the first time in seven months Toyota showed an increase in sales, North America, month over month...and it was noticeable in the dealerships.

 

When Toyota's well - the market's well. Attitudes were up.

 

U.S. light vehicle sales showed a sales spurt of a 14% increase as a result of Toyota (and somewhat Honda) returning to business as usual. Nissan was already back in the game. This is their best showing since 2009.

 

I've always said they never deserved the hardships they've endured.

 

Earthquakes, recalls, spontaneous acceleration, nuclear plant meltdowns, tsunamis, floods, recalls, more floods in Thailand... WTH?

 

The average Japanese executive might have done that thing in the garden with the knife.

 

Nissan recovered more quickly and came back to market faster than either Toyota or Honda... mostly because of the genius of Carlos Ghosn.

 

This guy with a better company and less corporate obstacles would be even more incredible. He was on the scene, virtually the very day after...while his Japanese counterparts at Toyota and Honda... and several Japanese others...still had their thumbs firmly placed in precarious wet dark places while they were debating what to do...Carlos was making decisions and directing traffic at the ground zero where it was all happening. This unusual little guy, allegedly weird looking, Elvis Costello Mutant, wearing his hard hat and frame glasses was leading the team at the scene.

The Biggest Loser

What the Hell? Honda dropped from number four to seventh in the U.S. Market as Chrysler , Hyundai-Kia and Nissan moved ahead.

 

I won't beat a dead (dying) horse BUT Honda used to be an innovator...Now... afraid to step out there and take a chance with design, engineering, or content. They're building 'bland' cars when they had all of the breaks and opportunities to surge ahead...especially during the Toyota recalls.

 

We Don't Need This

I received a call last week from my friend Bernie Woodall at Thomson-Reuters news service. Bernie was hot on a story about Chevy Volt...and spontaneous combustion. Unfortunately, I'd been on the road for four days...out-of-touch and wasn't aware of the story. Couldn't help him even though I love an opportunity to be quoted in national press. Reuters has quoted me dozens of times and I always try to feed them breaking news when I am on a story. Many national stories they broke began with a phone call from me.

 

General Motors, the new product is great... I just bought a new Buick Enclave and I am overwhelmed with the vehicle, quality, performance, and appearance. That's coming off of nine Escalades and seven Corvettes. (Still keeping my Vette)

 

I called some of my dealers in his behalf but information was scarce.

 

As best we can perceive a Chevy Volt... one mind you, burst into flames long after a side impact crash test,. Have I got that right?

 

NOW, Chevrolet's hope and prayer, The Volt, is recalled for spontaneous combustion after a side-impact collision in a crash test evidently caused a weld to break and the car flamed up weeks later.

 

Is this as serious? Truthfully I don't think so. BUT, will it derail the product's momentum? Without as doubt.

 

You see, as usual, General Motors has farted around with this vehicle, in and out of bankruptcy... we're going to build it... NO, we're not going to build it...

 

Excuse me Mr. Obama, oh, yes Sir we will build it. We'll build it immediately. After all the Obama administration is pressing manufacturers to put a million electric vehicles like the Volt on the road by 2015.

 

The Volt has been a major non-event to date with high development costs and weak sales. Going into December with only 6000 units sold, far short of the 10,000 unit target...now this shadow hanging over them. If they are serious about selling 60,000 Volts in 2012, they need some serious PR right now.

 

Remember, Toyota is gearing up to sell a target of 400,000 Prius annual sales in the U.S. Market. Personally, I believe Toyota is going to spin off Prius as a separate brand in the foreseeable future. let's see how that plays on main street?

 

The Volt fix will cost GM less than a thousand dollars a unit protecting the battery and the circuitry. It's the reputation that's taking a hit more than substance. After all, combined gasoline and electric power, the Volt gets a realistic 60 miles per gallon which is 10 miles a gallon better than the smaller Toyota Prius.

 

In spite of so many sales and marketing successes recently... profits and increases in market share (partially because of Japanese disasters) General Motors is doing some incredibly inept moves putting more emphasis on pressuring dealers facility uniformity than meaningful sales initiatives.

 

Last month I wrote about my visit to Dearborn where my friend, Jim Farley VP of Global Operations for Ford, gave me a private tour of the top-secret future product development and engineering labs deep in the bowels of the Ford complex. I actually had to swear and sign it in blood not to write about or reveal what I had seen.

 

I came away with a firm understanding that Lincoln is going to rapidly become a world-class contender in the Luxury Sector heads up with Mercedes, BMW, Audi and Lexus.

 

NOW here come Cadillac...

With the North American International Auto Show less than a month away look for Cadillac to come out with all guns blazing introducing entry-level luxury with their game radically 'stepped up'.

 

Mary Barra, senior VP of global development at GM says they're ready to roll out four new products including the Cadillac ATS.

 

The ATS, smaller than the CTS is aimed head up to compete with C Class Mercedes and the BMW 3 series.

 

Small Luxury is the most dominant section of the market...and, until now, General Motors has not been in the game.

 

I predict you'll see the Luxury segment of the market continue to shift downward...remember I said it first several years ago and now it's becoming more of a reality. The boomers and the generally affluent buyers are adjusting downward, did it myself recently. Still want the toys and the technology and feel of luxury, but at a smaller less ostentatious price and fit. Frugality might just be the new cool.

 

Nobody is doing this better than Hyundai and Kia. Beautiful design, quality and loaded with gadgetry...no wonder they're coming on.

 

Cadillac already introduced the full-sized STS at the L.A. Show last month causing many competitors to suck in a breath quickly lest they gasped out loud... Cadillac is coming on.

 

Mary Barra is a personality to watch, rising superstar, and certainly the most powerful female executive with stature and authority I've ever seen breaking through the glass ceiling amongst the good ole boy club at Renaissance Center.

 

Okay, so now, Cadillac... we've got the ATS, the CTS, the SRX, the STS, and the Escalade. Oh, almost forgot, they're rolling out something called the XTS too.

 

Lincoln's got the MKZ, the MKX, the MKS, the MKT (ugly-assed mistake of a car) , the Town Car (RIP) and the Navigator.

 

Watch for some fool to name a car the STD some day.

 

That's the only problem I'm seeing here. When Alan Mulally first came to Ford, one of the first things he did was rename the Ford 500 back to 'Taurus'. Ford Taurus at one time was the number one selling car in the world. Mulally did the right thing.

 

We need to stop trying to be the Germans.

 

American Cars have names, personalities and cubic inches, excuse me. All of those bullshit alpha-numeric names have no identity. I promise you the public does not know the different cars in the lineup at Lincoln.

 

Same thing with Cadillac with such great brand equity still in the closet. If I were in charge the names DeVille and El Dorado would be revived.

 

Here Comes the UAW...sort of

When I first got into the retail automobile business back in the 70's, there were more than a million and a half members in the UAW... and that was all automobile industry employees. They were the 800 lb. gorilla and the manufacturers trembled and bent heavily to their every demand.

 

Personally, I believe they are largely responsible for where our economy has gone, jobs exported overseas and the rise of foreign competition.

 

Today they are limping around with only 377,000 members, and get this... only 115,000 of them work in the automobile industry. They've opened up UAW membership to casino workers, hotel workers, nurses and teachers. More than half of UAW membership is not in the car business.

 

The reason all of these other industries make up more than half of the UAW membership is to give them greater political leverage as a voting block to get concessions from politicians. Worked in 2008 didn't it?

 

Now, they are targeting international manufacturers building cars in the U.S. for unionization. Most likely Nissan plants in Tennessee and Mississippi are on the menu although they say they have not selected a target. Hyundai has already taken a defensive stance rallying their workers to reject UAW advances.

 

Usually not something I write about BUT, as of late, the union has taken to the tactic of picketing dealerships and disrupting business by intimidating customers. Let's see where this goes...

 

Worst case scenario, more great jobs shipped down to Mexico.

 

End of an Era?

From the beginning we all knew it was going to be a short run as executives go. That doesn't make it any better or easier to lose one of the greatest in the history of the industry BUT, it appears Ford is looking for Alan Mulally's replacement.

 

His vision, personal charisma, and sound business decisions led Ford out of their darkest hour. He rolled the dice, all or nothing, and threw the ball into the end zone. I know Alan from several encounters and he always made me feel welcome and unguarded as some do.

 

The lengthy one-on-one conversation he and I had at the Greenbrier a couple of years ago is one of my best career memories.

 

On the short list, wouldn't be surprised if they didn't make a hard run on John Krafcik who is currently the CEO of Hyundai North American operations. Krafcik left Ford after 14 years to go with Hyundai back in 2004. His background is product development and he's exhibited great vision and marketing at Hyundai. So for Ford, bringing him across would serve several purposes... bringing on a great executive with proven leadership at the top position with an understanding of company culture and product development...who incidentally knows Hyundai's game plans. AND, taking away a key player who is hard to replace from Hyundai who is a little short on the bench.

 

The other two candidates form within are obviously Jim Farley and Mark Fields... both personal friends of mine and great leaders with distinctly different leadership qualities and complimentary expertise.

 

Personally, I don't feel any one of the three is a mistake... other names are popping up BUT, truthfully, these are the only three I'd bet on if it was my company and family legacy riding on it Bill.

 

I know what decision I'd make if it was down to these three...but, I'll keep that to myself.

 

Of course, Bill Ford and company spokes mannequins are categorically denying the wall Street journal story that started all of this... BUT I tend to believe it's in motion right now.

 

I am speaking again this coming year at the NADA Convention in Las Vegas. Back to my roots, I'll be presenting "20 Persuasive Ways to Sell F&I Products" Please come out and attend the convention and be sure to visit.

 

AND now, we have Internet Battle Plan VIII scheduled in Atlanta January 18th and 19th at the Buckhead Marriott.

 

Not only are we bringing on NEW SPEAKERS with New Content. Ziegler's vision is a reality. We wanted to produce a two-day event that would add a lot of value to our dealers and their management. Not the same old people that speak at all of the events But Rather; a selected handful of highly successful presenters, some still working in the business to give your internet sales a turbo-charged increase the day you return to the dealership. Real nuts-and-bolts, how-to-do-it; we're showing, in depth with detail, exactly how to implement these techniques and processes in your dealership. Look http://www.internetbattleplan.com

 

AND finally, I'm presenting at Brian Pasch's DMSC Boot Camp directly before the NADA Convention in Las Vegas. My subject, negotiating and working a car deal. Imagine that. http://www.pcgdigitalmarketing.com/

 

As always, I continue to hold regularly scheduled Sales manager and F&I Manager schools here in Atlanta...the next two in February... http://www.ZieglerSeminars.com

 

Keep those emails and posts coming... ZieglerSS@aol.com

 

JIM

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Comment by Steve Marsh on January 1, 2012 at 6:01pm

Great comment on the Tru-Car plague--agree 100%.  Interesting take on the Luxury segment esp. since I am with Lexus--but have a New Sante Fe Limited as the wife's main ride and she loves it.

Comment by James A. Ziegler on December 20, 2011 at 5:32pm

Thank you Jillian...

Comment by Jillian Christiansen on December 20, 2011 at 5:14pm

Excellent article....

Comment by James A. Ziegler on December 19, 2011 at 8:40am

Elise, it appears to me that scott painter changes his story every time he speaks, depending on whether hje's speaking to dealers, the public, or his investors (which should be running away right now). 

Listen to Painter's words on the video...

"...future releases will address other parts of the car buying process, financing, leasing, insurance, maintenance, repair, refueling it’s a four trillion dollar ecosystem, it’s the biggest category on the web today and from a business model perspective, being able to aggregate an audience is core to the advertising business model and the auto category is one of the most lucrative in terms of a CPM and lead generation basis…”

Scott Painter - TrueCar

He is saying they're going to take over financing, leasing, and then the service department, insurance, even refueling and maintenance. Painter and his investors intend to hijack the entire dealership system replacing it with big box retailers,,,and then dictating to the manufacturers like Wal-mart. He laid it out in no unclear terms. 

Those dealerships making money with TrueCar do not get it either... the tactics they are using to overcome the TrueCar certificate lowball quote bait and switch or added addendums, or holding on the trade, high finance, etc... these loopholes are being closed by TrueCar one at a time until they disappear...poof. 

Comment by Elise Kephart on December 19, 2011 at 5:19am

Jim, going to sit with my GM in the morning and re read the truecar agreement. The whole DMS thing, is a little scary if they actually are using that as the only source to supply data.  I watched a video where Painter explains in detail how he uses his data, he said the DMS is only a small portion out of like 13 sources. 

Comment by James A. Ziegler on December 16, 2011 at 3:19pm

Okay Honda has taken a courageous stand and banned TrueCar pricing with it's dealers. I know for a fact VW is strongly considering doing the same. I hope VW realizes that they've just began to get some incredible momentum in the market AND now is NOT the time to allow an invader like truecar to devalue the brand in the public's eyes. No matter what you sell, TrueCar cheapens your brand.

Group 1 made sure their dealers cancelled after looking at the exposure of having these people rooting around in their DMS, especially with AutoNation's CEO on the board of Truecar...

Group 1 was smart enough to see the writing on the wall and run as from away from these people as possible. When is Asbury, Penske, Sonic and others going to awaken and realize they people appear to be a huge threat? Even large private groups like Rick Hendrick should be looking at the evident danger we're all perceiving here. 

Where are FordGeneral Motors and especially...where is Toyota in this escalating skirmish? I am embarrassed that mark Reuss, president of general motors would actually go to TrueCar Headquarters and play with Painter showing him a 750HP Camaro.

I did not mention Nissan because their dealers are using Truecar to sell way below invoice so they can collect stair step money. You guys are smiling now BUT if Nissan takes away the program, you're screwed royally because of the benchmarks you set with TrueCar making your brand image "Ultra Cheap Nissan"

Does Mark Reuss NOT understand that his dealers are being raided by these people cheapening the product down to unprofitable and below? I find it hard to believe that Reuss would publicly suck up to these people if he truly understood.

There are a few investigations of TrueCar popping up here and there AND we're still urging dealers to put more emphasis with your dealer associations to get off of the sidelines and represent us... I know a couple of associations are doing their best while others limped off of the battlefield without firing a shot...  weak. 

I am especially disturbed about Toyota staying quiet while Honda takes a stand. It's like sending a message that Toyota has less value. 

This thing will gather increasing momentum and I predict TrueCar will find some high-profile weak suck who will sellout their integrity for the publicity or hard cash and take a stand publicly backing them and betraying dealers.

Of course, this is all a lot of conjecture, speculation, supposition and opinion...I might be wrong. :)

 

Comment by James A. Ziegler on December 13, 2011 at 12:36pm

The Devil Made a Call to Georgia

by Joshua Hirsch


The Devil made a call to Georgia, he was looking for a industry to steal.

He was in a bind because of the forums chatter and was looking to make a deal.

When he came across a young man selling cars, and selling them HOT, then the Devil jumped on his speaker phone and said boy let me tell you what !! I guess you did not know it but I am a car guy too, and if you care to take a dare id make a bet with you.

Now you sell cars good son, but give the devil his due. I bet my business, against your industry because I think I’m better then you. The boy said my name is Jimmy and it may be a sin, but I take your bet your goanna regret cause I am the best there has ever been !! FIRE ON THE MOUNTAIN, RUN BOYS RUN !!!

Comment by James A. Ziegler on December 10, 2011 at 12:53pm

Thanks Stan Esposito and everyone. I am actually a little depressed after being informed I was no longer on the TrueCar-ZAG Christmas list.

Comment by Stanley Esposito on December 10, 2011 at 11:09am

Nice work Jim. I hope your holiday season is good and next year is even better!

Comment by Cliff Banks on December 10, 2011 at 8:26am

Hey, Paul -- not that I have a dog in this fight, but DE is the fastest growing dealer-focused blog in the industry -- and there are several. And with one posting last week generating more than 20,000 views and 70 pages of comments, seems like there is a lot of interaction going on. And it loads just fine for me....

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