Friday, July 17, 2009

Congress Tries To Save Auto Dealers. Too Little, Too Late?

During the recent bankruptcies of both Chrysler Corporation and General Motors, much of America and Congress stood by as both passed judgment on hundreds of Auto Dealers around the country, pulling their franchises, effectively putting them out of business and handing the franchises to other dealerships, free of charge.

Ignored by all as the White House manipulated these closings and handed down directives to receive his socialist help is that the very proceedings by-stepped and ignored individual state laws on franchises.

Over a month later news is coming out that both Houses of Congress, seeing how many they threw into the unemployment lines, are taking steps now to “protect and reinstate dealers” that so unceremoniously lost their franchises.

With Obama announcing his opposition to such measures, I feel these moves are just another smoke screen thrown up to convince voters they tried and not to be held accountable for all the newly unemployed laid off from so many dealerships.

Should, by some fluke, the auto dealers regain their lost franchises, it will most likely be too little too late.

For example, the auto dealership I was employed at for 19 ½ years as a technician is one of those that lost their franchise in Chryslers closing of 789 dealers. Locally, we were known as Vancouver Mazda Dodge owned by Allen Webb since October 2005.

Webb has retained his Mazda franchise and has renamed the Dodge portion to “Used Car City.” Webb recently finished and moved the dealership from it former location in Hazel Dell to a new $11 Million facility, just weeks before losing the franchise.

Many bloggers discovered a disproportionate number of dealers losing their franchises that supported Republican candidates over those who supported Democrat candidates, fueling much speculation on the closing having a political payback motive.

Nothing has ever been proven in that regard.

It is doubtful that played any part in Webb’s case, as he is a Democrat.

In my estimation, Webb brought on his own problems as from the time he purchased the dealership, adding it to others in his Auto Group, a series of mismanagement and bad calls coupled with poor customer service in the last year doomed the dealership as the long time customer ship present when he purchased it just walked away.

The day he took over the dealership the entire sales crew walked out, with only one returning right away and just for a short time.

When he purchased the dealership, we were known as Clark County’s Dodge Truck store, selling and servicing an awful lot of Dodge Trucks, especially the Cummins Diesel models. We had a contingent of factory-trained technicians that had been employed with the previous owner 20 years or more, the newest technician being employed with the dealership 4 or 5 years.

Dealership Service Departments with that many long term technicians is nearly unheard of in the trade, giving us an advantage over other dealers as customers new us by name and felt comfortable bring their vehicles to a shop with such stability. Many would drop their cars or truck off and step into the Service Managers Office to chat with “John,” as they knew him well and trusted us.

We weathered previous recessions due to such trust and familiarity with customers who knew they would receive the best service possible.

None of this was good enough for Webb as he first trusted the newly acquired dealership to a General Manager who decided to put Dodge on the back burner and build up the inventory of Mazda Vehicles. That began losing sales as buyers began looking elsewhere for the trucks or cars they desired while Mazda sales rose only slightly.

Adding to the demise of the dealership was to pressure the Service Manager to leave and bring in more of a “yes-man” who was recently fired from another dealer, a Jeep Dealer that today, remains in business.

“John” realized that in order to keep well-trained and knowledgeable technicians, we must have an opportunity to make up lost pay from when we spent much time on difficult warranty diagnosis and repairs. Webb had decided that the “soup” work should go to lesser-paid lube techs so that service jobs would make him more profit personally.

“Floyd,” the new Service Manager, began right away alienating long term technicians as he brought with him other techs, not trained explicitly in Dodge, including his own son. Within a few months, as better paying jobs went to the new people “Floyd” brought with him and long term techs saw their paychecks dry up, those who had carried the dealer through rough financial times in the past began leaving, 4 in one day alone in September 2008.

Undeterred and leading many to think that was “Floyd” and Webb’s intent, more from the Jeep dealer were brought over as that one began recovering. More long-term customers began going elsewhere as they began discovering the trust they were used to enjoying was no longer there, as the new crew began their “shake them down” attitude towards customers.

Hours were changed to 6:30 AM to 8:30 PM 3 days a week per split crews, further leaving owners at the whims of the new “shake them down” crew who would at times leave a car set the 4 days they were off until they worked again.

New and confusing computer systems were instituted that managed dispatching of jobs and even time keeping for technicians.

In all it rapidly deteriorated into a very stressful workplace leaving older employees exhausted and with much lower paychecks to show for their years of loyalty.

The last long term Dodge technician was terminated June 16, 2009 just days after the franchise was pulled. The remaining technicians are all of the “shake them down” attitude and struggling to survive on used cars or those customers who may think there are still factory trained Dodge technicians there.

What they really receive are recommendations for unnecessary services and even unneeded repairs as the “shake them down” techs fumble through diagnoses.

In the final end, Allen Webb has no one to blame for losing his franchise but himself and his business decisions.

I find it unlikely that any of the franchises would be restored, given Obama’s strong opposition to the plan, but the off chance Webb were to regain his franchise, would it do him any good?

I’m sure that given time, a new customer base would be built and new technicians could be properly trained and hired, but he would never be able to rebuild what he threw away, either in technicians or the same customers who steadily purchased vehicles and returned for service and repairs.

It took the previous owner as well as “John” and every one of us techs years to build up that loyalty. It took just months to lose it.

I imagine other dealers around America have lost similar business base and technicians and also face the poor likelihood of regaining them in their employ.

While I still think the proposal is more of a smoke screen than anything, to negate an obvious vote loser for them, if Obama signed it into law, it will do little good over all as it will be just too little too late.

Perhaps everyone should thought the matter out better instead of jumping headlong into such a bad decision in order to nationalize the auto industry and alienate the customer base.

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