How many Signals do you need???

[TheOne]

Although I am posting this in the Dealer/GM forum it is universally important to all who make their living in the dealerships of America.

It's time to wake up people. Everyone knows our industry is in decline, and facing ever increasing pressures, availability of credit, recession, etc. Everyone and their dog also has some sort of rationalization as to why it is happening and who is to blame. We all on the dealer side of the equation can list a thousand things the Manufacturer could do to fix it, build better cars, support the dealers better, on and on, and on.

The moment for decisive action has come and nearly passed. Make no mistake it is already far too late for many dealers in the U.S. and the people that they employ. Yes currently active will close and soon. Even if by some miracle the economy did a dramatic about face today many would still close. Jobs will be lost, new one are not being created. Vendors will close, dealer billings unfulfilled.

Those of you hoping to ride out the down turn with scaled back operations hoping for significant gain due to a smaller dealer body in an emergant market once the recession has passed are only delaying the inevitable. This strategy alone will fail.

Manufacturers will consolidate. New facility demands will be made and even greater pressure will be exerted to further shrink the dealer body even after the the recovery is well underway. The economy cannot support you, and the manufacturers only want a fraction of you.

The answer to the woes that face us all is as old as America itself. Innovation, the act or process of inventing or introducing something new. It is time to reinvent auto dealerships. This cannot be done without serious self examination first.

During the course of my career I have ruffled many feathers large and small, some even on this forum by questioning and challenging what I perceive as old school thinking. I have seen time and time again Dealers, GMs, Managers, and Consultants one after another hang on to old unprofitable ways, methods, and systems for no other reason than "this is the way we have always done it", or "there is the possibility that it might offend a customer, employee, or Joe the plumber who buys his cars from someone else". Is this so very different than the buggy whip salesman refusing to sell model T's because the racket might spook a horse?

The innovation that I suggest is not so novel, but does require courage. Dealers Learn and I mean really learn Fixed Operations. Learn it for yourself and take the fight for your economic survival to the service drive and the parts counter. 100% fixed absorption is not only possible it is required for you to survive. Learn it, teach it, demand it. Rid yourselves of those people offering excuses, and those who are not fully committed to achieving it.

Scale back your sales departments and their ridiculous expenses and advertising budgets. Maintain your place in the market as a tool to support Fixed Operations. Maximize your return on your existing customer base while making plans to recover your service business from the independents. execute those plans only after institutionalizing the process changes that allow you to operate profitability. Move away from personality based systems that leave you tied to individuals like a rope around your neck. Move instead towards real operating systems tha allow you to coach, manage and lead to predetermined levels of growth and prosperity.

Why besides "that what I know" continue to rely on razor thin margins, self-serving manufacturer, unreliable lenders, and a fickle market? It isn't hard to see that this is no longer working. Many, many, many of you are so wrapped up in the bark of a single tree that the forest completely escapes you. Maybe I'm wrong, maybe the courage, will, or determination just isn't there.

[X476]

Iam a little bias being that I work in the fixed op's side. But I agree with the fact that Fixed Op's is what is going to keep the dealerships alive. I'am very fortunate to work for a dealer that for the most part understands this. Our Service & Parts Director is second to no one. She has done a fantastic job of building our customer base and even more important RETAINING them. We are not as busy as we were but we are alot better than anyone else in town.

[TheOne]

Comparisons are great if meaningful. Busier than the competition, but profitable??????

[X476]

TheOne,

You correct you can be busy but not profitable. Here in the parts room we have turned a profit every month for the last 17 years. (not saying much if you lose money in parts you have got some bigger problems) Last month service was not and body shop was. This month is looking like the same but we have got 2 weeks yet to bring service around.

[scotstrong]

dealerprofit, is that you?

[ddeneen]

scott, i was thinking the same thing

[TheOne]

I thought DealerProfit was banned

[TheOne]

If you really want to rise to the challenge look at the total fixed overhead for the entire dealership. Cover that bill and your own departmental expenses and you will have recession proofed your store. Divorces, tax bills, audits, and law suits still an obstacle but hey who asked you to walk on water right??

The whole board seems to be dead! Silence those who question and the world goes to sleep???

[deboss]

scotstrong and ddeneen,

Agree - as my memory recalls his registration date is about the time dealerprofit went away. He must be finished establishing world peace and is now ready for a greater challenge.

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[Gasser]

I ALWAYS READ/RESPECTED DP'S VIEWS,THOUGHT HE ADDED ALOT TO THIS FORUM.(hehehe waiting behind tree for DP to show up)

~~TAKE AS DIRECTED