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The Puget Sound Dealer
A Message from the Editor
Official Publication of the Puget Sound Automobile Dealers Association 16101 Greenwood Avenue N Bldg 2100 Seattle WA 98133 Phone: 206 542-3551 Fax: 206 542-7561 Email: jim@psada.com www.psada.com
Life is Like a Bunch of Dots There is a quote I read once that went something like this: “Life is like looking at a picture really close. When you look really close, all you see is a bunch of dots. Life is like a bunch of dots. Each of us is a single tiny person up close. But when you stand back we are part of a big picture and we are connected, and it’s beautiful and wonderful.” Sometimes we feel like we are alone, but we are never alone. Sometimes we feel like we have to do everything ourselves, but in reality, when we stand back, it is easy to see that we are part of a symphony of people doing wonderful things together. Of course, there is the occasional dot that falls out of line, but for the most part, it is a pretty amazing picture when you consider our diversity and differences. Running a dealership is no easy scenario. To be successful you always have to look at the bigger picture and make sure it is a picture you are happy with and willing to hang on your wall. And, like all pictures, when you look close you see a bunch of dots…each dot one of the people that works for you and helps paint that picture of success. Every dot counts. Every one of them is important or there is a void in the picture. So, the next time you look at your employees, look at them as dots and realize that they are all connected to each other and to you…and to your customers and vendors. Hire wisely, review regularly, and love your employees always. Not only is this the right thing to do because we are all connected, it creates a successful, productive and profitable dealership. James Hammond Executive Director
BOARD OF DIRECTORS 2012 President Jim Morino Acura of Lynnwood 1st Vice President Sara Carter Carter Subaru, Shoreline 2nd Vice President Steve Klein Klein Honda, Everett 3rd Vice President Jim Walen Ford-Hyundai of Kirkland Trustee Position #1 Dan Wilder, Jr. Wilder Auto Center, Port Angeles Trustee Position #2 Marc Ikegami Doug’s Lynnwood Mazda, Doug’s Lynnwood Hyundai, Doug’s Northwest Cadillac Immediate Past President Jason Courter Honda Auto Center of Bellevue PSADA STAFF James R. Hammond Executive Director Linda Halverson Executive Assistant Susan Leonhardi Programs and Data Base Manager
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Message from the President - Jim Morino
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Nine Answers to Your Estate Planning and Tax Questions
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Safeguarding Your Dealership’s Assets
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Using Job Descriptions to Drive Performance
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Steve Bates and The Ultimate Driving Machine©
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Online Dealer Advertising - Search Less, Succeed More!
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Go With the Flow - Inventory Management Systems
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The Telephone Doctor: Your Attitude - How Successful Are You?
For information on advertising in this publication contact Jim Aitkins Blue Water Publishers, LLC 360.805.6474
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Facts About Where You Work That You Never Knew
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PSADA Remembers Its Founder, Larry Norton, Jr.
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Global Journeys with Janet Maines - Medical Tourism
Cover photo by Adam Buchanan
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Coffee Break
Michele Foley Office Assistant
Inside this Issue 4
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You Talk. We Listen. At Ryan Swanson, we connect with people on a human level. That’s why our approach to helping clients reach their goals is practical, straightforward and cost effective. It’s our no-nonsense way of doing business that puts people first, like Brad Brotherton of Brotherton Cadillac.
Humanese Over Legalese.
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206.464.4224 | www.ryanswansonlaw.com
Message from the President
Jim Morino Acura of Lynnwood
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PSADA Steps Deep Into High Technology
Over the past year PSADA has been working closely with software developers and certified Microsoft network engineers to bring dealer members the nation’s first, fully online, comprehensive wage and benefit analysis survey on a Microsoft Sharepoint platform. This past February you saw the fruits of all these efforts when you received the very sophisticated, but user-friendly online data input URLs that replaced the longhand input data booklets that you used to use to send PSADA wage, benefit and financial information. The online input data manager was designed to streamline your entry process. At the forefront of PSADA’s development was security. We are very aware of the sensitivity of the information you trust us with and we thank you for that trust. That is why PSADA’s new computer and server systems are state-of-the-art and protected by the best security protocols. But PSADA’s new systems will serve dealers with far more than just wage analysis. PSADA now has the capacity and ability to develop its own online dealership employee handbooks and other HR Management software. We are looking to the future and creating products that serve our dealers with excellence. And, because PSADA is a collective member organization, you can be assured that the price-point of future products will be dealer-friendly, too. PSADA is also an environmentally friendly company. We’re 98% paperless. So, watch your email. That is how we will communicate with you. Plus visit www.psada.com. The resources are extensive and they are all free with membership. Hope you are having a good 2012.
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Answers to Your Estate Planning & Tax Questions
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The daily operations of a car dealership require nearly all your available time and energy. You know that long term planning is important, and you intend to address it someday, but you never seem to have the time. If you and your family are to enjoy all the fruits of your labor, you must make the time for long term planning. Below are several important estate and asset planning questions and answers you should consider now. 1. Due to the change in federal estate tax laws, what estate planning opportunities should I consider now? With the increased gift tax exemption of $5 million in 2011 and 2012, now is the time to make large gifts. Gifting now would freeze the value of the gifted property and would remove postgift appreciation and income from your (potentially taxable) estate. If you have a business or property that you want to pass to family, you may be able to apply valuation discounts in order to maximize your gift: these valuation discounts may not be available for intra-family gifts in the future. Also, there is no Washington state gift tax. Therefore, lifetime gifts by Washington residents are not subject to a state gift tax and will escape the Washington estate tax. Take advantage of the current estate tax laws by looking at your gifting plan now.
By Kari Brotherton, Lance Losey and Nancy Kennedy Ryan, Swanson & Cleveland, PLLC
2. My neighbor tells me I need a Living Trust. I have a Will. Am I missing something? Living Trusts are frequently used in place of a Last Will as the primary means of transferring assets at death. They have unique qualities that make them an attractive alternative for certain individuals. In comparison to Wills, Living Trusts are more private and allow the estate to pass without probate if correctly implemented, among other qualities. However, Living Trusts also are more complex to create, require more maintenance, and can often fail to avoid probate if neglected. Don’t accept your neighbor’s word you are missing out, but do have a conversation with a qualified estate planning lawyer to judge for yourself whether a Living Trust meets your needs. 3. Why should I consider appointing a professional trustee to manage the trust for my children? Aren’t trust companies too expensive? A professional trust company may well be worth its fees. Consider the following reasons why it may not be best to appoint a family member: First, by serving as trustee, your family member is exposed to liability for which he or she has no training. Secondly, the relationship between your family member and the trust beneficiaries may be stressed by the financial entanglement created by the trust. Finally, if the trustee does fail in some respect, would you rather have your children seek legal redress from their relative or from a licensed and insured professional? Make the best choice for your family, but don’t dismiss professional fiduciaries out of hand.
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4. What is the difference between a Living Will, Health Care Directive, Advance Directive and Do Not Resuscitate Order? Living Will, Health Care Directive, and Advance Directive are interchangeable terms for the legal document that instructs your physicians to remove you from life support should you be in a terminal condition or irreversible coma. This document also can provide customized instruction for end of life care (for example, specific instructions mandated by conscience or faith). We recommend all of our clients possess a current Living Will/Health Care Directive/Advance Directive. In contrast, a Do Not Resuscitate Order is a document appropriate only for the seriously ill, as it instructs physicians not to make efforts to revive you from cardiac arrest. This instruction is not appropriate for all clients and should only be given after consultation with your physician. 5. How often should I update my Last Will? Unlike baked bread, pop music and designer clothes, your Will does not grow stale with time. A Will written in 1945 still may be valid and effective today. However, your Will may get out of line with your intentions as your family and financial circumstances change, or as estate tax laws are revised. For example, the $5 million gift to charity may no longer make sense when your net worth declines from $20 million to $10 million. Likewise, the nomination of Uncle Jim as Executor becomes inappropriate when Jim develops dementia or moves out of state. Rather than updating your Will with the passing of time, use significant changes in financial or family circumstances, or tax laws, as a trigger to review your Will. 6. What is a qualified personal residence trust? A qualified personal residence trust (“QPRT”) is an estate tax savings strategy that uses your personal residence to make a gift during your lifetime that will ultimately save estate taxes. For instance, if you make a gift of your home to your children now, you can reserve the right to live there for a number of years. The right to live there has a value, which is deducted from the value of your home in determining the amount of the gift. You save estate taxes because, if you survive for the number of years you reserved, the house passes as a gift to your children and is not in your “gross estate” for estate tax purposes. The amount of the gift consumes a lower portion of your gift/estate tax exemption that otherwise would occur, so there is more of your exemption left to shelter other assets. 7. When is a gift tax return required and what happens if I don’t file one? Gift tax returns are due by April 15th of the year following the gift and are most commonly required when an indi10
vidual gives any one person gifts during the calendar year that total more than $13,000. While there are penalties for failure to file gift tax returns, the penalties are generally based upon the tax due and often no tax is due. Even so, the tax community has seen an increase in gift tax reporting enforcement, including the IRS working with state agencies to obtain land records for intra-family transfers. Though historically rare, the IRS has examined hundreds of taxpayers in recent years. We suggest you meet with a professional advisor to determine if you are required to file a gift tax return. 8. How do I avoid Probate? First of all, this question assumes probate should be avoided. Because Washington has a relatively simple probate process, many people do not have much to fear from probate. Nevertheless, avoiding probate is generally done by employing a “Revocable Living Trust.” A Living Trust gives title of your assets to a Trustee (usually you) to hold for your benefit. At your death, your named successor Trustee holds legal title to your property and may transfer your assets to your named beneficiaries without probate. Probate is also avoided if all of your significant assets are held as “joint tenants with rights of survivorship” or have beneficiary designations. There are pros and cons to consider, so whether you should avoid probate, and how to best accomplish it should be discussed with your estate planning attorney. 9. What is a GST trust? Why should I create one in 2012? “GST” tax refers to the federal generation-skipping transfer tax. In general, the GST tax applies to the transfer of property (during life or at death) to grandchildren or more remote descendants. However, every taxpayer has an exemption from the GST tax. By funding a GST trust (also called a “dynasty trust”) and using your GST exemption, you can make property available to your children, grandchildren, or more remote descendants in a way that will avoid transfer taxes that may otherwise apply to your children’s estates. In other words, the estate tax is “skipped” at the death of the children. Right now, we have a very generous GST exemption of $5 million. Under current federal law, the GST exemption will decrease to $1 million in 2013. Therefore, 2012 is an excellent time to consider creating a GST trust. For more information, please contact any member of Ryan Swanson’s Estates & Trusts Practice Group: Lance Losey: (206) 654-2256; losey@ryanlaw.com Nancy Kennedy: (206) 654-2233; kennedy@ryanlaw.com Kari Brotherton: (206) 654-2227; brotherton@ryanlaw.com
a Winning team Get a CPA firm with a winning record on your team.
Peterson Sullivan LLP, one of the nation’s most successful specialists in auto dealership accounting, serves more than one hundred dealers in the Pacific Northwest. We are one of only a few CPA firms approved to perform audits for GM Motor’s Holding Division. And we are the only Washington State member of the exclusive AutoCPA Group. Following are only a few of the many areas where we are trusted advisors to our automotive industry clients: • Cash controls • Internal controls • Cost segregation • IRS reporting requirements • Dealership valuation • Sales and B&O tax consulting • Estate and succession planning • Tax planning • Financial statement analysis We believe strongly in building long-term relationships with our clients. We aim to understand your business so well that our advice becomes indispensable. Please contact Kevin Allison to see how we may assist your business needs at (206) 382-7777 or by email at kevina@pscpa.com. Peterson Sullivan. Driving your success.
Peterson sullivan llP
$ W By Matt Matson, Partner Peterson Sullivan, LLP
$afeguarding Your Dealership’s Assets
We are often asked by clients: “What can I do to safeguard the assets of my business and ensure the monthly financial reports are accurate?” The short answer is to make sure your internal controls are properly designed, implemented and monitored. Internal controls may not be fun or exciting, but they are the first and often last defense to preventing or detecting fraud, theft and errors. Below is a list of our “top ten” questions which discuss controls every dealership should have. This list should not be considered all inclusive and, keep in mind, internal control can only help prevent fraud, theft and error. Controls do not guarantee the elimination of issues as controls can be overridden in a variety of ways, such as collusion. 1. Bank Statements: Is the monthly bank statement opened and are the canceled checks reviewed by someone who is independent of accounts receivable, accounts payable, cash receipts and bank reconciliations? Independent review of the bank statement and enclosures can catch fraudulent transactions such as: • • • • •
forged checks modified checks (original payee or amount changed) odd/improper vendors odd/multiple endorsements improper cash transfers
Banks no longer routinely send many of the enclosures (such as canceled checks) that they used to enclose with each monthly bank statement, but these enclosures are almost always available for review on-line.
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2. Journal Vouchers: Are journal vouchers reviewed and approved prior to posting in the accounting records? Independent review and approval is critical to ensuring that only necessary entries are made. Journal vouchers are one of the most powerful accounting system tools. They enable corrections of errors and posting of nonstandard transactions. They can also be used to hide fraudulent transactions or to manipulate the financial reports. Independent review and approval is critical to ensuring that only necessary entries are made. 3. Write-Off Approval: Are write-offs of accounts receivable, policy work and no charge repair orders reviewed and approved by the sales or another manager? Approval of write-offs can detect theft such as: • • •
theft of cash receipts covered by write-off of receivables free service provided to friends or family services provided but payment made to an individual instead of the dealership
4. Corporate Credit Cards: Do corporate credit cards have specified spending limits? Are employees required to turn in all receipts? Are statements and receipts reviewed to ensure that all charges relate to dealership operations? Review, approval, and reconciliation of corporate credit card statements and related invoice receipts can catch: •
personal charges improperly charged to the dealership account
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abusive transactions where employees are charging inappropriately large expenses to the dealership
5. Reserve Accounts: Are all liability reserve account postings (such as those to wholesale loss or service contact chargeback liability reserve accounts) reviewed and approved in detail? Generally, reserve accounts do not reconcile to, or match, any specific item or amount. Independent approval and review can prevent fraudulent transactions or simple posting errors which are being hidden by posting against the reserve accounts. 6. Flooring Account: Is the flooring liability account reconciled in detail on a monthly basis? A detail reconciliation of the flooring account will ensure that amounts outstanding are related to inventory on hand or recently sold and can detect errors or theft if the inventory item has been sold (or never existed) but the flooring balance has not been paid. 7. Schedules: Are the schedules produced by the accounting system reviewed and reconciled in detail on a monthly basis? The schedules should be reviewed for old outstanding items and/or unusual balances at least twice a month. The reviewer should also be alert for entries being posted through journals that are not normal for the account being reviewed. Proper reconciliation of the schedules will help eliminate errors in the monthly financial reports. Because the monthly (or weekly in some cases) factory statement reports a tremendous amount of activity each month, it is critical that this be reconciled within a few days of receipt of the statement. 8. Monthly Reconciliations: Are other balance sheet accounts such as various types of receivables and payables reconciled from the accounting system to the supporting detail schedules? Also, are such reconciliations reviewed for accuracy and unusual items? Reconciliation and review are important to ensure that all transactions are accounted for on a timely basis and to ensure that detail schedules accurately support the balances in the accounting records. Review of reconciliations looking for unusual reconciling items can detect errors or improper transactions posted to hide fraud or theft. To document accountability, both the preparer and reviewer should sign, or initial, and date each reconciliation when prepared or reviewed.
functions and do they change functions for continuous two week periods at least annually? Having employees rotate duties for a period of time can detect errors or theft. Many times, an ongoing fraud requires the perpetrator to continually manipulate specific financial data or accounts. Rotation of duties or enforced vacation can create a gap in the perpetrators ability for manipulation and may highlight the improper transactions. 10. Used Vehicle Transactions: Are employees monitored to ensure used vehicle transactions take place through normal dealership operations? Relationships with all wholesalers should be evaluated at least quarterly and all sales to wholesalers should be reviewed and authorized by the dealer or general manager. If possible, three bids should be obtained on wholesaled vehicles to help ensure the amount received is proper and independence is maintained with all wholesalers. These basic controls provide a foundation for the overall internal control for a dealership. There are many other controls that may be necessary or useful in preventing fraud, theft or errors. Proper internal control assists in ensuring that assets are not improperly used or taken from the dealership. They also help make sure that monthly financial reports properly account for all transactions. However, internal controls are not a guarantee that fraud, theft or errors are not happening. Also, you should remember that the effectiveness of internal control in the future cannot be guaranteed because operations, policies or procedures may change, so your control procedures should be regularly reviewed and adjusted as needed. For more information on this subject, contact Matt at 206-3827777 or at mattm@PSCPA.com.
9. Rotation of Accounting Duties: Are employees, especially in the accounting department, required to take vacations? If not, are employees cross-trained on multiple 13
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By John Strom
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Using Job Descriptions to Drive Performance
In this issue I want to elaborate a bit on the topic I presented in the December 2011 issue – being clear about Job Expectations. That discussion was the second in a series designed to help you look at how you manage key aspects of your business. I’ll pick the series up next time. For now, I want to share what an example of the type of job description I discussed looks like. A well-conceived and well-written job description contains: • Position Title – Following a good “Titles & Expectations” format (e.g. Sales Consultant not “Salesperson”; Technician not “Mechanic”, Administrative Assistant not “Clerk”, etc.) • Reporting Relationships – To whom the position is directly responsible and accountable (no more than one!) and with whom they work. • Specific Responsibilities – The specific responsibilities of the job (e.g. “develop new business” not “make five prospecting phone calls per day.”). • Duties – A list of what they’re expected to do daily/ weekly/monthly/annually. • Measurements of Effectiveness – The specific, quantifiable results measures that are used to gauge job performance effectiveness (e.g. profit produced; number of client contacts, etc.). 14
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Qualifications – Required and desirable qualifications of the position. Look at the General Job Responsibilities that apply to all team members and the Sales Consultant Job Description to see how this is done. •
What’s the benefit of having expectations this clearly defined? …. team members clearly understand what to do every day, …. this frees them to work toward the achievement of shared objectives, and …. foster the creativity and initiative that leads to greater success! Watch your people’s productivity and your profits rise when this is the case!! John Strom has been helping retail automotive managers improve their performance for over 25 years. He has held a number of management positions in both single-point and multiple franchise operations, including General Manager. His company, Strom & Associates, is a member of the Performance Development Group. To learn more as about their services, visit www.perdevgrp.com.
Job Descriptions General Job Responsibilities The following general job responsibilities apply to all team members. The listings in parentheses ( ) following the item indicate the policy and procedure to refer to on how to perform this responsibility. 1. Represent and conduct yourself in the best interests of the organization in a professional and safe manner. 2. Treat all clients/customers and fellow team members with courtesy and respect. 3. Ensure the proper and expedient handling of all clients/customers. 4. Demonstrate the highest levels of honesty, integrity, ethics and morals in your words and actions. Be in compliance with all laws and regulations. 5. Ensure all work you perform and all results you produce reflect the highest levels of quality and that they meet or exceed our clients’/ customers’ and the organization’s expectations. 6. Read, know and follow all policies and procedures applicable to your job (organization and manufacturer/distributor/supplier). (CP1000) 7. Complete all responsibilities and duties on schedule and on a continuing basis, as expected. Follow through and follow up. (CP1002) 8. Be enthusiastic. Maintain a “positive mental attitude.” 9. Coordinate your activities with your fellow team members for maximum effectiveness and efficiency. 10. Cooperate to the fullest extent possible with your fellow team members. 11. Communicate with fellow team members and management. Keep them informed of all changes, problems, progress, failures, etc. as appropriate. Share your suggestions and ideas. (CP1008) 12. Ensure all paperwork you initiate or handle is done properly and flows smoothly in a timely manner. Coordinate this flow with others as appropriate.
13. Work your assigned hours, follow meal and break schedules and be available to work overtime when the need arises. (CP1005) 14. Actively participate in all meetings and training sessions as appropriate. (CP1007, 1008) 15. Control waste and expenses, especially the waste of your time and that of others. 16. Develop and sustain your knowledge of our products and services at the level needed to effectively perform your job and communicate with our clients/customers and your fellow team members. 17. Identify and train your successor(s) when possible. If you manage other team members, ensure they are training their successor. (CP1002,1010) 18. Train others to ensure they are capable of filling in for you when you are away. (CP1005, 1007, 1010) 19. Fulfill all promises and commitments you make. Do not make any that you cannot or will not keep. 20. Be neat, clean and appropriately dressed. 21. Keep your own work area and the general area of your department clean and neat. Help maintain the cleanliness of the dealership as assigned. 22. Assist in maintaining complete, accurate and up-to-date information about our clients/customers, inventories and transactions in our computer, in files and on documents. Ensure that corrections to this information are made promptly when appropriate. 23. Ask questions. Do not assume things. If you are not sure, ask questions of the appropriate person, one who will know the correct answer and/or is responsible for the outcome. 24. Assist others in the performance of their job when appropriate. Be helpful. 25. Perform other duties as assigned.
Job Description Sales Consultant A Sales Consultant is hired by and reports to a Sales Manager (or Assistant Sales Manager). They work with almost every other team member in the dealership from time to time. Responsibilities Sales Consultants are responsible to do everything necessary to result in people buying or leasing vehicles from the dealership. They are to “help people buy,” rather than “selling them.” 1. Serve as the organization’s representative in all activities connected with the sale of new and pre-owned vehicles and related products and services to our clients and customers. 2. Perform all duties necessary to help customers buy/lease our products and services at or above established profitability guidelines. 3. Follow all General Job Responsibilities as stated in the Employee Handbook and/or the General Job Responsibilities description.
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Continually develop new customers and new business. Continually work to turn customers into clients—advocates of doing business with the organization. 6. Maintain effective relationships with previous clients (…and customers, as appropriate). 7. Work with prospective customers/clients in such a way as they feel served, being accurate and reliable in all you do and available to them (or having other acceptable-to-them alternatives available). 8. Maintain and upgrade knowledge of the organization and the products and services we sell and of competitive products, services and organizations. 9. Maintain up-to-date, accurate records, files, forms, etc. 10. Establish short- and long-term objectives to consistently improve the accomplishment of the above. continued on page 16
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Duties These are to be performed daily/weekly/monthly/annually as directed. 1. Use the telephone, mail, email, internet (social media) and personal contact to develop new business. 2. Serve customers/clients as they work through the process of buying/leasing a vehicle or any of the organizations’ other products and services. This includes meeting, interviewing, advising, presenting, experiencing, purchasing, delivering and servicing customers/clients. 3. Assist management as directed in the performance of all actions required to do business effectively and efficiently. This includes such things as: keeping books and records accurate and up-to-date, maintaining displays of products and information, keeping the facility neat and clean, collection of past due accounts, customer/client management, etc. 4. Together with management, set annual, monthly, weekly and daily results-oriented performance objectives. Develop and work action plans to effectively achieve these objectives. 5. Perform any and all other duties as may be assigned from time to time. Measurement and Feedback 1. Sales Consultants are measured based upon the actions they take in terms of: a. Gross profit produced b. Number of products and services sold c. Number of Customer/Client contacts – new, followthrough, follow-up d. Ability to use product knowledge effectively e. Customer/Client satisfaction and advocacy (including conversion of customers into clients) f. Organizational support (of philosophies, policies, procedures, guidelines and people) 2. They receive feedback about their performance on a daily, weekly, monthly and annual basis. Such feedback shall focus on development (future actions) rather than evaluation (past actions). Qualifications 1. High school diploma or GED equivalent; Bachelor’s degree preferred 2. Three+ years related experience related to the job above; or any similar combination of education and experience 3. Ability to handle rejection 4. Compatible work ethic/work values 5. Ability to emotionally engage people 6. Adaptability 7. Desire to provide strong customer support 8. Ability to convey value about products and services
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Photo by Adam Buchanan
By Craig Chastain
Steve Bates
And The Ultimate Driving Machine ©
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It’s good to be BMW these days. The Ultimate Driving Machine© saw record sales in 2011. They recently passed the two million mark for BMWs made in America. They won all three ALMS racing series championships. They co-starred with Tom Cruise in the latest Mission: Impossible. And they have Steve Bates running the store at BMW Seattle. Bates is General Manager at one of the premier dealerships in the Lithia Motors family, a 66-year old organization with close to 90 locations throughout the Midwest and West. His team of 100+ sales and service professionals operate from glistening facilities just east of Seattle’s professional sports stadiums. For this transplanted Brit, the state-of-the-art complex is a source of great personal and professional pride. “Lithia and BMW built this facility with the customer – the driver – in mind,” he says. “They gave us a store that serves our clients and honors the brand.” Medford-based Lithia acquired the Seattle BMW franchise in 2001, just days after 9/11, and immediately began planning for a move from their downtown store on Pike Street. “Our former location was limiting our ability to grow,” says Bates. “This new facility has five floors, 39 service bays, and more that 300,000 square feet of floor space. At any time we’ll have at least 90% of our inventory on display – more than 350 vehicles – and a merchandise store with all things BMW.” Bates’ love of cars is quickly obvious as he recalls
his early career experiences in Great Britain, including eight years as a London chef before finding his life’s calling in automobiles. He came to America in 1995 where he and wife Sheila found a Northwest home to raise their three children and enjoy their grandchildren. At least one of the Bates clan has inherited his father’s “car gene.” Son Christopher is a technician in the dealership’s expansive service department. “Some of the things we’ve loved about the Northwest as a family are the same elements that make BMW so popular here,” he says. “The change of seasons calls for versatile, intelligent cars that adapt to changing driving conditions. The four-wheel-drives do extremely well in this market, but BMW gives us dozens of models and platforms so there are choices for everyone.” He points to the Seattle culture as a unique match with a car company known for its ecological commitment, technological vision and long-term sustainability. ”Our clients come to us with high expectations,” he says. “Most of the time, they’ve done their homework and know what they want.” Bates prepares his staff across departments with an eye to providing an exceptional customer/dealer experience. “We want everyone to be putting the customer first, whether they’re out in the showroom or under the hood,” he says. “We use every resource we have to connect and serve our clients.” The supportive and energetic environment has produced a low turnover/high motivation team that draws new and repeat customers from across the Northwest.
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Photos by Adam Buchanan
Bates has chaired the dealer’s marketing advisory group and regional business council: his marketing savvy has helped generate positive word-of-mouth that’s supported by a strategic and effective advertising program. “Online is a major part of our marketing approach,” he says. “We have an excellent in-house team that creates great ads for TV and radio, but we’re finding that the majority of our customers come to us because of our Internet presence.” “Almost every car in our inventory has at least 20 photos on our website at www. bmwseattle.com,” he continues. “We try to give the customer as much information as possible so that our time together can be productive.” BMW Seattle opened the doors of their new facility as the economy began its downturn in 2007. They shared the challenges to the industry that all dealerships endured, and today there’s a shared optimism that the car business is being reborn. “BMW is leading the way in this recovery,” says Bates. “They’re investing more than 900 million dollars in the Spartanburg plant. They’re rolling out some spectacular new models this year. Today they’re the leading manufacturer of premium automobiles in the United States.” Mirroring the carmaker’s model of commitment to the environment and community involvement, the dealership has been a longtime supporter of numerous charities and non-profits. They’ve donated vehicles and merchandise to fundraisers; directed money to arts organizations and the Paramount Theatre; supported charities like United Way and JDRF. “We try to do a little for a lot,” says Bates. “There are so many worthy causes and we try to reach out to as many as we can.” A British car-lover selling automotive excellence in the American house that BMW built. For Steve Bates, it’s a dream job. “To say I have the perfect job is an understatement,” he says. The Ultimate Dealer Machine©.
Steve Bates with some of his crew
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(Downtown) (Dow town) (Downtown) (Downtown) (Dow town) n n (Downtown)
Redmond Redmond Woodenville Woodenville
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North North S oo os s S oSnohomish Snohomish
South outh h South outh h Snoh homish m h Snohomish Snoh homish m sh h sh Snohomish
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Thurston Thurston
KING K IFederal N G Way
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Olympia O Olympia O Thurston Thurston
East Pierce East Pierce
Eastt Pi E Pierce PIERCE Eastt Pi E Pierce PIERCE
THURSTON THURSTON
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Grays Harbor Grays Harbor
To get in the driver’s seat, contact Jeff KentMt. Rainn ieierr Centralia To get in the driver’s seat, contact Jeff KentMt.NaRain Centralia t’l. ’ nPie ark ar ier rk Grays Harbor H b Grays Harbor H b
206-270-4748 jeffrey_kent@cable.comcast.com N a t’l. ’ P ar arkk 206-270-4748 jeffrey_kent@cable.comcast.com LEWIS
Source: Polk Insight based on sales within the Seattle DMA among the top 50 auto dealers, December 2010 – November 2011 new vehicle registrations. Source: Polk Insight based on sales within the Seattle DMA among the top 50 auto dealers, December 2010 – November 2011 new vehicle registrations.
PA C I F I C PA C I F I C
comcastspotlight.com comcastspotlight.com WA H K I A K U M
LEWIS
ONLINE
DEALER ADVERTISING By Jeff Kent Business Development Manager Comcast Spotlight – NW Region
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Think about the first time you went car shopping. Most likely you learned about different makes and models when you saw them in TV commercials or glossy magazine ads. Your nearest dealership also ran ads in the local newspaper. But you could only get so much information about your vehicle options from the available media. Once you were really ready to start comparison shopping, you had to visit your local dealership – and often more than one – to narrow down your choices. Now think about the last car you bought. This time the process was very different, wasn’t it? Because today, most of the car shopping experience happens online. Almost 90% of consumers today use the Internet to research new vehicles.1 As an auto dealer, it’s important to know which consumers are using the Internet to buy cars, and how they are using it, so you can maximize your online advertising opportunities.
Search Less, Succeed More!
of news and entertainment content, attracts approximately 26% of Seattle Honda owners in an average month.3 Your Strategy When you think about your media strategy, remember to consider a holistic approach that accounts for where your target audience is spending their time researching their purchase decision. Online advertising, when used in conjunction with other media like television, extends your brand’s reach. Often consumers are watching TV while surfing the Internet, which increases the chances they will see your ads on both screens and retain your message more effectively. Research shows when you advertise on TV and on the web simultaneously, brand recall increases on average 49%.4 Whether you utilize videos of vehicles, specs and reviews, or other online advertising options – the web provides advertisers a platform to have deeper engagements with consumers.
The Online Auto Shopper Often, auto dealers fall into the trap of focusing online What kind of auto buyers are you likely marketing on search engine optimization and keyword to reach online? Seattle’s foreign auto buyers advertising. It sounds like a great idea, but in practice it are more likely to enjoy outdoor recreation, perform volunteer work and attend cultural should again be just one piece of your overall strategy. events. Local domestic auto buyers are more likely to enjoy camping, casino gambling and live sporting events. Between both groups, nearly 40% spend When choosing where to advertise online, remember you will more than ten hours a week online. They are more likely than get the most bang for your buck on websites with high consumer the average consumer to seek out automotive information on engagement. Users spend more time on these sites and view more 2 the Internet, and to shop for their next vehicle online. pages, providing more opportunity for them to see and respond to Honda drivers are a great example of these trends. your ad. When users are engaged they are more likely to purchase Almost half of Seattle area Honda owners spend more than your product and retain your ad’s message.5 Xfinity.com is a good ten hours a week online, and they are more likely than the example of a high-traffic, high-engagement site. Each month it average local consumer to utilize the Internet for their autogenerates more than 19 million total visits in the Puget Sound motive needs. Xfinity.com, which provides a wide spectrum region, reaching more than a million unique local residents. The 22
average user visits Xfinity.com 18 times per month, views 94 pages and spends 105 minutes on the site.6 Often, auto dealers fall into the trap of focusing online marketing on search engine optimization and keyword advertising. It sounds like a great idea, but in practice it should again be just one piece of your overall strategy. Using banner ads along with search is better than search alone. People who used search and were additionally exposed to display advertising were 22% more likely to produce a sale.7
A study conducted by Eyeblaster Research on cross channel search and online display campaigns showed 72% of the cross channel campaign conversions (sales resulting from online advertising) were a direct result of the display ads, but only 28% were the result of search advertising. This study suggests businesses that use display advertising to extend their reach beyond search receive the overwhelming majority of their web-to-sale conversions as a result of their display ads. The purchase funnel is a theoretical marketing model that describes the customer’s journey towards the purchase. The further the prospective customer moves through the funnel, the higher the likelihood that he or she is going to purchase the product. Search works on the lower parts of the funnel by targeting prospective customers in the consideration stage or in the intent to purchase stage and pushes them to buy the product. Display, on the other hand, works on all stages of the funnel. It brings new prospective customers into the funnel – and creates the potential that they will purchase from your dealership – by generating awareness. When they interact with your advertising early in the buying process you get their attention all
the way through the favorability, consideration and intent to purchase stages. Online Advertising Options Don’t forget to take the opportunity to showcase your vehicles the way they were meant to be seen – through motion, sound and engagement. Today’s online advertising options are more dynamic and impactful than ever. Given that over 80% of the content consumed on the Internet each month is video, you should prioritize video in your display ads whenever possible. You can use video within the banner ad to generate excitement and vehicle consideration. Video ads deliver 5 to 15 times the engagement performance of traditional banner ads. You might also want to consider pre-roll video ads, which users watch prior to viewing a video online. Rich media ads also create deeper product engagement; when the user scrolls over the ad, they can interact with it and, of course, can click through to your website. Have you considered making a statement by taking over an entire website page with your advertising? A “roadblock” guarantees your ad is the only one shown on the web page, ensuring you full impact on the consumer without competition from other advertisers. Finally, make sure your online advertising is geographically targeted to reach your specific customers. You will access the people most likely to shop at your dealership, and you will avoid wasting precious advertising dollars on consumers outside your local area. Your Future is Here Online advertising is the next generation billboard and video content delivery system, and it’s here to stay! It should be an important component of your overall advertising strategy. It works best long-term, so keep it in front of your consumers and let it drive awareness and purchase consideration for your business. The car shopping world has changed and now is the time to grab the wheel and steer consumers to your website, your dealership and that next big sale. You may contact Jeff Kent at Jeffrey_Kent@cable.comcast. com.
MediaMind Nielsen Cross-Platform Homes March 2010, Scarborough Seattle-Tacoma DMA August 2011 3 Scarborough Seattle-Tacoma DMA Feb 2011 4 Nielsen IAG A18+ March 2010 5 Advertising Research Foundation 6 Seattle DMA ComScore Dec 2012 7 eMarketer Sept 2007 1 2
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GO WITH THE Do your managers really use an inventory management system? If not, why not?
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FLOW
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Having been directly involved in the retail automobile business for nearly 40 years, I have come across a myriad of “better mousetraps” and so called “magic pills”. If I had a dollar for every time a vendor told me that “all you have to do is sell one more car to pay for it”, well, let’s just say that we have all heard that before. The truth is, that as it relates to the new and used vehicle sales game, it’s all about vehicle turnover. It always has been and it always will be. The question then becomes, how can we increase vehicle retail turnover? We could try and spend more money advertising. We could offer to pay extra commissions. We could try and price our inventory on the Internet to be the most attractive in terms of a price search. We could lower our grosses. We could try to reach out to a broader base of prospects. We could also wish, hope and pray. These are not the solutions that I choose to advocate. The solution that I do advocate is to “Go With the Flow” and this premise is the basis for this article. Have you ever wondered how one of your competitors always seems to be able to deliver more vehicles than you? Or how someone in your “20 group” was continuously selling one to one (or more) used to new? Or how they grossed more per unit than you? Or how they were able to experience little or no “wholesale pain”? The answer is that they have learned to “Go with the Flow”. In short, stocking more of what is moving well and less of what is not. This increases the number of quick turners, and we all know that the “quicker turners” gross more. That goes for both the new vehicle department as well as the used. This is no secret. I recently completed an exhaustive study of all of the ramifications inventory decisions can, and do, have on the dealership’s bottom line. Many things were clearly revealed and confirmed by the data as a result of the study. The following list is not intended to be a revelation, nor is it all inclusive.
Scott Dreisbach
Quicker turning vehicles gross more per unit on both the front end and back end • There is a direct correlation between inventory age and gross profit • Gross almost always goes up as availability goes down and the opposite is also true • Sales compensation in real dollars and as a percentage of gross goes up in direct proportion to vehicle age • Many specific years, makes and models sell faster than others • The Internet is your ally, not your enemy • More inventory does not mean more deliveries • Salespeople tend to lead prospects to the “freshest” inventory • Dealers’ advertising dollars are largely spent on the slowest moving inventory • Seasonality, special events and incentive programs are a fact of dealership life • Forecasting sales is very unpredictable and is usually optimistic and inaccurate What do I mean by “Go With the Flow”? Simply put, I mean, monitor actions, measure movement, make decisions, adjust your inventory and then do it all over again. When I refer to actions I mean things like demo drives, Internet hits, phone calls, actual unit showings, etc. Measure and record specific actions for each investment (unit). Measure movement means how many, how much, how long, etc., and this means all retail sales. Based on the answers to those first two key indicators, make decisions and then make inventory changes. One of my favorite sayings is “without a map, any road will do”. Get yourself a “map” and follow it. One of the best (and this “map” is free) methods to increase retail vehicle turnover (Going with the Flow) is 25
installing a stocking guide and simply measuring the cost of sales of the units we are delivering versus the remaining inventory by sales segment and individual model years within each segment. I have developed an Excel spreadsheet (“stocking guide”) tool that you can use to accomplish this and I will be happy to send it to you upon request with no charge or obligation. Simply send me an email asking for the used vehicle stocking guide and I will send it to you. It is easy to use and it really does work. I like to use the following 11 sales categories and the eight most recent model years within each category. The categories are: small car, sporty car, mid-size car, full-size car, small truck, small sport utility, large truck, large sport utility, minivan and van. When you clearly know what the cost of sales of the vehicles are that are “burning gas” is and couple that with how quickly they turned, and then compare that to your “ground stock”, you will have an exact idea of what you need to stock. As an example, if your number one gross revenue producing sales segment is mid-size cars and your best performing model year and quickest turner is 2008 within that segment and the average cost of sales is $8,200, then it stands to reason that your inventory of vehicles in that segment and model year needs to be as close to $8,200 (lot ready) per unit as possible. The sales pace of that segment determines your “stocking guide”. The closer your inventory is to the cost of sales of the vehicles that you are selling, the more active that inventory becomes. Conversely, the further away from the $8,200 target your inventory is, the less active it becomes. If, for example, you happen to be offered a trade that is a 2008 mid-size car but is worth around $14,000, get a buy figure on the unit that is good for at least ten days, trade for the vehicle, try it out on the lot for those ten days and if it isn’t gone at retail at the end of those ten days, cash it to the person who gave you the buy figure. This will allow you the opportunity to try other vehicles without the risk of wholesale pain. Ultimately, you will find the ideal inventory in both the number of units you need, as well as the cost, for each sales category and model year. I strongly suggest aiming for a target of a 37 days’ supply of units and a 37 days’ supply of dollars in each sales category and model year. (The unit days and dollar days calculations were covered in a prior article and I will be happy to send it to you upon request.) It will soon become evident that there are some sales categories and model years that just do not make sense to participate in with an inventory investment. You will also find that by maintaining 37 days’ worth of units and dollars, there will be categories and model years that sales grow rapidly in. And finally, you will also be able to find the point of diminishing returns in each sales category where more unit in inventory, does not necessarily mean better sales in that category and model year. Part of the reason Wal-Mart has become the retailing giant 26
that it is, is due to strict adherence to the basic principles of inventory management: monitor demand, measure movement, make decisions and adjust inventory. You will rarely find any of their shelves empty or overstocked. If it is a good producing, quick turner, they gradually increase their stock until they find that point of diminishing return (where more doesn’t equal better). If they have tried it and it doesn’t work, they forget it and move on with something else. If you will take the time to implement this type of system, (or any of the available vehicle inventory management systems, mine included), you will increase your total Used Vehicle Department’s gross profit more than you might imagine. The bottom line is when customers leave our individual used vehicle car lots without purchasing, it is almost always because they did not see what they truly were looking for. (Sometimes they will not even get out of their vehicle and just do a “drive by”.) Remember, you cannot be all things to all people, and it is impossible to stock everything. When your used car lot has more on the ground of what your customers are looking for, what do you think will happen? Today’s technology gives us all the opportunity to make more intelligent decisions, more accurately and faster than ever before. Literally, with a few clicks of your mouse in the right program, you can get all of the information you need to make a better inventory decision. While it is impossible to predict economic swings, natural disasters, terrorist activities or wild fuel price fluctuations, you can phase in a “more active” inventory. It has been said by many different professionals that the first step to recovery is to admit you have a problem. This step is often the most difficult one to take as it involves an admission to oneself that somehow, someway, we have not achieved what we wanted. As car people, we always want to do better. Being of the optimistic breed, we all believe we will do better, even when repeated results keep staring us directly in the face, month after month. Is your inventory the problem… or the solution? Do your managers really use an inventory management system? If not, why not? Are you willing to change both your and their behaviors to attain different and better results? Once you decide to really “Go With The Flow” and implement those changes, you will be sailing along and charting a course to increased profitability. If you need anything from me, or would just like to talk about what some other dealers are doing to grow their business, please feel free to contact me anytime. For more information about this topic contact Scott Dreisbach, Vice President of Valuinsight, 561-368-7810 x 108, sdrize@ valusight.com, www.valuesight.com.
The Moss Adams dealer serviCes Group Presents
2012 Workshop for
Cfos and Controllers
Save your spot at our annual conference and stay up to date on vital tax and compliance issues affecting auto, truck, RV, and heavy equipment dealers. DATE
June 21–22
LOCATION
NYNY Hotel and Casino, Las Vegas, NV
REGISTER
www.regonline.com/2012DSWorkshop
w w w. m o s s a d a m s . c o m / d e a l e r s e r v i c e s
Certified Public Accountants | Business Consultants
Acumen. Agility. Answers.
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By Nancy Friedman The Telephone Doctor
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Your Attitude! How Successful Are You? 8 Steps to Get You There!
We’ve identified eight characteristics that those with a great attitude have in common. Stick with us –we believe you’ll enjoy this! 1.
Choose to have a great attitude - Successful people have chosen their attitude. Many folks tell me, “Gee, I’m usually in a good mood.” Catch the difference there? Right - ‘usually.’ You see, a mood is temporary and an attitude is permanent. What we have found is that successful people with a great attitude are able to get out of a bad mood quicker than those who don’t have a great attitude.
2. Visualize success - Successful people visualize themselves being successful. It doesn’t mean you’ll always get what you visualize, but it really helps to visualize what you need. Think about American Idol. Every one of those contestants firmly believe they have a chance of winning. And the successful cyclist Lance Armstrong, winner of seven Tour de France, never saw himself losing. Visualizing success does help. 3. Energy, humor and enthusiasm - Successful people walk differently. Watch how people walk - even in the parking lot. It’s a special energy. Those who keep their head up high and have a gait that’s a tad faster than just lollygagging along seem to have the attitude that makes them successful. Show me the slow, drag your feet, head down walker and I’ll show you someone who, in all probability, isn’t as successful as he’d like to be. And we know from all the very successful comedians, successful people laugh a lot. They enjoy making others laugh. Laughter is contagious. Successful people with a good attitude tend to find humor in things quickly. 4. Resist negative tendencies - Successful individuals stay away from negative tendencies. Successful people with a good attitude resist becoming part of others’ negativity. They feel better for it and their attitude stays in check. 5. Be a ‘whatever it takes’ person - Seems it’s real easy to turn customers (or anyone) down and not make a second effort. Successful people are what we call double checkers. They look for positive alternatives. Their attitude tells them to double check the situation and offer a positive alternative. 6. Accept change - Things didn’t go your way? You couldn’t/didn’t get what you want? Successful people can accept change and move on or forward much better than others.
7. Be grateful for what you have - Those that are successful with a good attitude are most often void of jealousy. They share. They help. They donate. They are genuinely happy for others. Are you? 8. Smile - We know the most successful individuals with that great attitude SMILE - a lot!
And please remember that a “Phony smile is better than a real frown!” For more information about this article, contact www.telephonedoctor.com
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This Is Maui. This Is Makena. The New Makena.
Just beyond Wailea is the beautified Makena Beach & Golf Resort, with its new rooms and suites, ocean vistas and service with aloha. Tennis, beach activities, outdoor spa treatments, magnificent beaches and the finest golf to be played on the island of Maui. Experience the new Makena at value rates which include the resort fee and breakfast for two daily. Truly Maui at its best. For Reservations please contact 1.800.321.MAUI (6284) or visit www.makenaresortmaui.com, or call your travel agent.
5400 Makena Alanui, Wailea-Makena, Maui, Hawaii 96753 www.makenaresortmaui.com
For more information, please scan this QR code.
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Facts About Where You Work That You Never Knew The Auto Industry’s Odd Beginnings
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When you think of the American auto industry, inevitably you think of Michigan and Detroit. But before World War 1 the national headquarters for automakers was Indiana where there were once hundreds of automakers. The Indianapolis Motor Speedway dates back to that time in 1911 when Indianapolis was the nation’s auto-manufacturing center. The last of the manufacturers left Indiana in 1963 when Studebaker shut down. The Genesis of a Great Industry The automobile as we know it today evolved. Parts of a car that we consider indispensable were added on the standard car production one by one over the past 100+ years. The engine crank was developed in 1782 by James Watt. Jean Lenoir invented the spark plug in 1860. In 1892 DeDion designed and sold the Bouton, a small but high-speed one cylinder engineered power car. DeDion later built the first V-8 in 1908. Windshield wipers were invented by a New York City woman named Mary Anderson in 1902. Powered windshield wipers didn’t appear until 1923, the same year that the radio was added as an accessary. Until 1920 car owners actually had to estimate how much fuel they had in their tank because vehicles did not have gas gauges. Until 1939 turning required sticking your arm out the window regardless of the weather. Buick changed that by introducing turn signals as standard equipment. But you still had to crank the window lever to open the window until 1946. Padded dashboards appeared in 1954 and electric door locks appeared in 1956 on several luxury models. In 1958 the adjustable side view mirror was introduced right on the heels of Ford introducing the first electric trunk release and Chrysler introducing the day-night rearview mirror. All-weather antifreeze plus coolant didn’t hit the shelves until 1960. And those brake lights in your rear windows? They were added after a suggestion by Elizabeth Dole, former chief of the U.S. Department of Transportation.
What’s in a Name? Did you know that the little statue on the grill of every Rolls Royce has a name? It’s Spirit of Ecstasy. Certainly a fitting name for the grand lady of all-time icon of elegant automobiles. Charles Rolls, co-founder of Rolls-Royce was the first Englishman and only the 12th person in the whole world to be killed in an airplane crash. Mr. Royce soldiered on, and when illness confined him to home, he ran the business by sending letters. He succeeded. The Mercedes-Benz three-pointed star is also world known. Mercedes was the daughter of German automaker Gottlieb Daimler. Mercedes is Latin for grace. The three-pointed star was supposed to symbolize Daimler’s ambition of universal motorization – “on land, on water and in the air.” Daimler offered the first car for sale in 1887 – the Benz. The Chevrolet bow-tie emblems came from a design seen on the wallpaper of a French hotel. The famous script that creates the Ford in the blue oval came from C. Harold Wills. The font was taken from a home printing kit that Wills had used as a teenager to make pin-money printing greeting cards. Michelin and More….. In 1895, Edouard and Andre Michelin, brothers who owned a rubber factory in Clermon-Ferrand, France, introduced the first pneumatic tire for cars. In 1908 their company contributed the first duel truck tires; in 1938 the first steel-cord tire; and in 1948 the first radial tire. Today America’s #1 manufacturer-specific automotive training center is located at Shoreline Community College. Its Professional Automotive Training Center began in 1978 as a legacy to the first automotive mechanics’ school that was established in 1904 by the Detroit YMCA.
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In Step Car Dealers, Auto Parts, and more…. The first car dealer didn’t emerge until 1902 in New York City. Until then buyers bought cars directly from the manufacturer. Three years later in 1905 the first car was reported stolen in St Louis and the 59th Congress tried unsuccessfully to regulate the operation of motor vehicles. Things have changed, haven’t they? In 1900 President William McKinley became the first President to ride in an automobile. The first auto parts and supply business opened in St. Louis in 1899, one year after the first independent auto dealership was established by William Metzger in Detroit. Three years later Charles Duryea built the first gasoline-powered automobile. The Duryea Motor Wagon Company was the first to make more than one car from the same design. The Duryea won the first auto race in the USA in 1895. Duryea was a devout Trinitarian, a sect of Christianity. His car’s design reflected his religious beliefs with three wheels and an engine with three cylinders. A Story About Henry Ford – a man of innovation and amazing marketing Henry Ford is famous for saying “Any color as long as it is black.” But the most popular color for cars and trucks is red. Henry, as we know, was the first in the world to mass-produce vehicles. The Ford Model N sold for $500 in 1906. In 1906 dollars, that is a lot. In the 1920s Ford automobiles actually cost less than they did in 1909 because of increased accuracy and efficiency during assembly. A Model T cost about $850 in 1909 but a similar model was only around $300 a little more than a decade later. By 1916 fifty-five percent of the cars on the road were Model T Fords, a record that has never been beaten. Unknown to many, the first Ford cars had Dodge engines. Rebates in 1914? Henry Ford was the first automaker to offer a rebate. In 1914 Ford made a public promise that he would make a $50 rebate to every customer if his automobiles’ sales exceeded 300,000 from August 1914 to August 1915. He kept his promise and mailed out 303,213 special checks for $50 to every owner. Fifty bucks in 1915 was heavy cash being equal to ten-days’ pay or 10% of the purchase price of a new Ford. Why Ford Wouldn’t Offer Credit. In 1923 Henry Ford did another first. Henry instituted a “savings account” plan due 32
to his personal hatred for the trend of buy-on-credit plans that were sweeping the consumer market at the time. Due to his religious beliefs, he disliked the idea of instant gratification and extended payment, and therefore did not offer any sort of credit on Ford automobiles. His alternative was the 1923 layaway or saving account plan. While this idea did work and sold many Fords, it did not work as well as credit. Eventually, Ford’s Model T sales stalled. GM’s new strategy of technologically advanced yearly makeovers combined with Ford’s outdated Model T and no available credit caused Ford’s 1920 sales to drop while GM’s soared. Henry’s son, Edsel, had been recommending a new car for years and finally won out with the production of the Model A. Edsel also eventually succeeded in convincing Henry of the benefits of consumer credit. In the 1930s the Ford-owned Universal Credit Company became a major player in world auto finance. It’s important to note that Edsel Ford, Henry’s only child, was responsible for the aesthetics of the new Model A more than any other person. Henry oversaw EVERY detail of the technical and mechanical makeup of the car, as always, but he obligingly left his son to attend to the way the car looked, since even the old autocrat Ford recognized Edsel’s innate design sense and good taste, which the man had in spades. The resulting Model A was one of the most handsome and stylish cars of its time at any price. The design weathered the decades to become a benchmark of popularly-priced good taste and elegant design – all to Edsel’s everlasting credit. A Great Tale About the Ignition Engine and AC Delco’s Birth French-born Albert Champion visited the United States, in 1889, when he was 11 years old, to compete in bicycle races. After gaining a greater interest in racing, and an enthusiasm for the horseless carriage, Champion headed back to his native land. His interest in the fledgling automotive industry led him to a hobby (and consequently, a great way to pick up a few extra French Francs) of making spark plugs. After successfully turning his hobby into a true manufacturing business, Champion again crossed the pond, this time for good, to establish the Champion Ignition Company. After a falling out between Champion and his investors, he and the Champion brand were torn apart. Never discouraged,
Champion joined forces with Flint, Michigan’s Buick Motor Company to form the AC Spark Plug Division. In the same time-frame, Charles Kettering was planting the seeds of his industrial contributions. Born in Ohio in 1876, Kettering was a school teacher turned engineer. After graduating from Ohio State University in 1904, Kettering was hired into the inventions department at the National Cash Register Company (NCR) in Dayton, Ohio. There, he developed an electric motor for cash registers, the OK Charge phone for department stores and several other contributions to a revolution then taking place in business machines. In 1909, Kettering and an associate at NCR, formed their own industrial research laboratory, the Dayton Engineering Laboratories Company (DELCO). Within three years, they had produced a new all-electric starting, ignition, and lighting system for automobiles. The system first appeared as standard equipment on the 1912 Cadillac and as its use spread, women could conveniently become drivers without the assistance of a chauffeur. In 1916, Alfred Sloan purchased DELCO, along with six other companies to form United Motors Corporation. UMC was sold to General Motors in 1918. Over the span of a century, ACDelco, as it exists today, was formed through several name changes, many mergers, and countless reorganizations. During that time the brand has taken part in many events. Some of those events include Lindbergh’s trans-Atlantic flight, Amelia Earhart’s solo flight, and Neil Armstrong, Mike Collins, and Buzz Aldrin’s trip to the moon. Interesting Automotive Brilliance and History It is always fun to end with scattered facts collected from researchers, bloggers and trackers. •
You know all those raised-bun reflectors in the center of the road? They were invented by Dr. Elbert Dysart Botts. Botts lived from the late 1800s until the early 1960s. The bumps are called Bott’s Dots.
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Seat belts are a federal requirement today, but they didn’t appear on any vehicle until Nash put one on their Rambler in the 1950s. They didn’t become standard equipment until 1963. Two years later rear seat safety belts also became standard equipment.
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License plates have been around for a very long time. New York State was the first state to require them in 1901.
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Parking meters first appeared on an Oklahoma City street in 1935.
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The idea of drive-in convenience to customers started in South Bend, Indiana at a local bank.
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Chrysler is credited with changing the image of vehicles in the world. In 1984 Chrysler introduced the Dodge Caravan and the Plymouth Voyager mini-vans.
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days, but Earl truly changed the face of the auto industry. In 1948 he introduced the tail fin on the Cadillac. Fins didn’t go away for a decade. And, in 1953 Earl created one of America’s automotive icons – the Corvette. •
The fastest speed recorded in the 1901 Grand Prix was 46 mph. In 1972 the average speed on an LA freeway was 60 mph with cars getting only 17 mpg. In 1974 the national speed limit was reduced to 55 mph due to oil shortages. Speed limits weren’t lifted until years later. But not all roads are “free’ ways. Toll roads are old news to transportation. The first one in the U.S. was in 1792 in Pennsylvania and Connecticut.
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New cars are turbo charged and more. In the mid-1900s it was all about cylinders. The last 12-cylinder car to be produced in the United States was Lincoln Continental in 1948.
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Hong Kong is the city with the highest concentration of Rolls Royce cars per driver in the world.
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Exotic car company Ferrari produces a maximum of 14 cars per day.
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The very first Porsche 911, which was produced in 1964, had an overall power output of 130BHP.
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The smallest car on earth that can fit a human inside is called the Peel P50. The car can go only 35mph and it weighs less than 150 pounds.
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As of 2010, the state of California has issued at least six standard motor vehicle licenses to people named “Jesus Christ.”
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Airbags take about 40 milliseconds to inflate during an auto accident.
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A car horn in good working order plays the musical note “F”. And, here is one of the oddest facts of all: there used to be record players in cars in the 1940s and 1950s. They were made by Motorola. How did that name come about? The most common record player at that time was Victrola. So they named themselves Motorola.
This story was compiled from dozens of Internet sites, blogs and automotive fact sources.
Harley Earl is a name that many may not know these 33
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PSADA Remembers its Founder
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Larry Norton, Jr. 1925-2012 Industry visionary, friend and mentor By Jim Hammond
On February 5, 2012 the industry lost one of its greatest visionaries. Larry Norton, Jr., President of Westlake Chevrolet in Seattle and Founder of PSADA, passed away in Fallbrook, California at age 86. Westlake Chevrolet was founded by Larry’s father, Larry Norton, Sr. in 1930. It was one of the first new car dealerships in Puget Sound. Larry, Jr. began working with his dad in 1940 selling cars. In 1970 he purchased the dealership from his father and ran it until 1985 when he closed his dealership. After that he resided half the year at his avocado and persimmon ranch in Southern California with his wife Eileen and the other half either at his downtown Seattle apartment or Bainbridge Island cabin, which he had since a kid. Eileen passed away in November, 2011. Larry was a successful new car dealer. In 1975 he was President of Washington State Auto Dealers Association. That same year he founded the King County Automobile Dealers Association, later to become the Puget Sound Automobile Dealers Association. He also headed up the Downtown Seattle Auto Dealers Group, which, at that time was 15 new car dealerships. Larry always had big ideas. He knew that Seattle would become the major city that it is today and he knew that the Seattle Auto Show could become one of the major auto shows in the nation. Larry just believed and his belief was contagious. It is that contagion that inspired all the dealers in the Puget Sound region to come together as one organization. Whether everyone knows it or not, Larry has had an impact on every one of us. Larry Norton, Jr. was my friend. As a young twenty-something he hired me a couple of years out of the U of W to start the dealer’s association. He was a nicely suited new car dealer and I was a kid with hair down to my shoulders. Afterwards for years he frequently remarked that he hired a hippy. He visited me one morning at my office in the IBM building where I was in my second year doing the Seattle Auto Show as an account exec for Stimpson King Thomas & Capeloto Advertising. Larry was the chairman of the dealer’s auto show committee. Larry asked me, “Do you want to take a walk?” Well, it was a walk of a lifetime a mile back to Westlake Chevrolet. He asked me if I would come to work for the dealers directly to start the association and to do the auto show. I asked where the office was located. He said there was no office, that I could share his.
And I did. April 1, 1975, PSADA was born. Larry was our first President. For the first six months I shared Larry’s office right there in Westlake Chevrolet. In fact, we shared the same desk. Then Larry helped build offices for the association on his second floor where PSADA lived until we moved to the college in 1986. Did I grow close to Larry? Oh, yes! He was always there for us until the end. He was my friend, my mentor and PSADA’s benefactor. Larry had a passion for his fellow dealers and for PSADA. There was nothing he wouldn’t do to help the fledgling organization succeed. The history of PSADA is well known and Larry was part of it every step of the way. One of Larry’s greatest professional joys was the Professional Automotive Training Center at Shoreline Community College. I remember when I told him what we wanted to do. He was all for it and he became a huge advocate for the program. In 2000 Larry made one of the largest financial contributions that any single dealer has ever made to PSADA – a scholar endowment of $100,000 to establish the Norton Family Automotive Technician Scholarship endowment for the Professional Automotive Training Center. Larry said, “I have always been a strong supporter of the Association and think that the technician programs at Shoreline is one of the most important contributions our dealers body has given to the regional auto industry. It is my hope that other Puget Sound dealers will follow my lead and make similar financial endowment contributions to PSADA and the College. It delights me to make this contribution to PSADA and to the College.” Because of Larry no student will ever have to abandon their schooling at the training center because of lack of funds. Since 2000 Larry’s visionary thinking has protected and produced dozens of talented automotive technicians. Time moves faster than anyone of us can comprehend. It is hard for me believe that Larry is gone. But his spirit and everything he believed in lives on. And, as for me, I will always be grateful for his trust of a “hippy” kid and everything he poured into me. 35
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Global Journeys
With Janet Maines
Medical Tourism
H
Surgery then Recovery at a World Class Resort or Spa
Have you ever imagined yourself on a sunny beach sipping a tropical drink while recovering from surgery? More Americans are traveling abroad to have procedures ranging from teeth whitening to hip replacement surgery because the costs of the treatment/procedure and the travel expenses combined are often significantly lower than the cost of the procedure in the US. Medical Tourism, a term that describes traveling across international borders to obtain health care, is a billion dollar industry. In 2012, it is estimated that six million Americans will be traveling abroad for treatments and procedures. There are many reasons people are seeking alternative health care services in other countries! Health insurance doesn’t cover specific procedure
formed overseas are non-emergency conditions. Doctors work with counterparts in the U.S. to share diagnostics and complete evaluations to ensure that the patient is psychologically and physically ready to take a trip and undergo an operation Traveling abroad includes luxury accommodations in an idyllic location and weeks of post-operative care and recuperation. The spread of technology and the increased standards from the West-trained physicians who speak English make traveling less of a challenge. Many of the international facilities and physicians are accredited by the same commission that reviews institutions.
Brazil
1) Out-of-pocket expenses would exceed the cost of the trip 2) Travel to get privacy 3) Use time away to focus on getting well & help speed recovery Another reason for the rapidly increasing popularity of medical tourism is that some patients want the highest quality of care they can afford, no matter where on earth it is. The most common procedures per37
Thailand Wonderful Exotic and Sunny Place to Recover Medical destinations in this specialized niche in Asia include India, Malaysia, Singapore, Thailand and the Philippines. Latin American countries attracting the major share of the market include Argentina, Brazil, Costa Rica, Mexico and Panama. Ideal countries for medical tourism are countries that are open, convenient to get to, safe and secure and a great destination in their own right. Latin America and Mexico are extremely popular among U.S. tourists for this type of travel because they are close to the U.S. border and many doctors are U.S. certified and offer less expensive procedures. Places like Singapore, India and Latin America are not considered Third World anymore in regard to medical facilities. In Latin America, travelers will come to Panama and Costa Rica for procedures ranging from heart to reconstructive knee operations. In the Caribbean, the top medical tourism destination, by far, is Puerto Rico. The major advantage of traveling to Puerto Rico is that it is a commonwealth of the U.S. The field of Medical Tourism is an expanding one with an increasing globalization, the borders are crumbling, and patients, professionals, healthcare providers and payers are all reaching out around the world. It’s only a matter of time before there are multinational corporations for clinical services.
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Some People Save Thousands Dodging Their Large Deductibles at Home People who have health insurance with large deductibles and co-pays of 15-20 percent can often save thousands of dollars by traveling abroad for surgery and paying the entire cost themselves as opposed to just their portion of the cost in the U.S. When a person decides to travel abroad, they set in motion a process seeking a super-specialty hospital comparable to the Cleveland Clinic or the Mayo Clinic. All the debate about health care has led to the innovative new ideas of India Medical Tourism. Doctors are now serving patients through concierge medicine, a “fee-for-service� and health care delivery characterized by a direct, financial relationship between private physicians and their patients. Four Seasons Hotel Westlake Village is connected to the California Health & Longevity Institute
Argentina
where I found an entire program centered on prevention offering a more beneficial approach to ensure healthy individuals take the concept of wellness to a whole new level. Western and Eastern philosophies merge in the areas of medicine, fitness, nutrition and life style to help you create a lasting life change.
Philippines
And you can have it all and stay in a luxury hotel? Yes! With more companies focusing on health in the workplace, you can learn to have a healthier life – cooking classes, fitness consultations, spa treatments, a comprehensive and high-tech medical checkup – and do it all at a luxury hotel. If you are considering going abroad for medical treatment, it’s important to do your homework and research your condition, treatment options, and destination ahead of time. Talk to your primary care provider, and consider the level of care your situation requires. It may seem strange to pack sunscreen as well as crutches for a journey, but if medical bills, airfare and accommodations cost less than the deductible and other charges you might pay in the U.S., it might make sense to pick up your passport and go. I will be attending the upcoming Medical Tourism Global Forum being held in Puerto Vallarta to learn more about this growing and fascinating field of combining medicine and tourism.
Costa Rica
About Janet For more than 21 years Janet has been handling travel arrangements for the auto industry. She specializes in corporate meetings, leisure vacations and cruises, group conventions and incentive travel. For more information about this article or to have Janet help you plan your next get away, contact Janet Maines & Associates, A Full Service Travel Agency, 206-782-0576. Toll free: 866-2948747. Email: janetmassociates@aol.com or on the web at www.jmtravelco.com.
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Coffee Break Mind Your P’s and Q’s. A game of concentration. At local taverns, pubs, and bars, people drank from pint and quart-sized containers. A bar maid’s job was to keep an eye on the customers and keep the drinks coming. She had to pay close attention and remember who was drinking in ‘pints’ and who was drinking in ‘quarts,’ hence the phrase ‘minding your ‘P’s and Q’s.’
God willing and the Creek don’t rise! It’s not about water. Did you know the saying “God willing and the Creek don’t rise” was in reference to the Creek Indians and not a body of water? It was written by Benjamin Hawkins in the late 18th century. He was a politician and Indian diplomat. While in the south, Hawkins was requested by the President of the U.S. to return to Washington. In his response, he was said to write, “God willing and the Creek don’t rise.” Because he capitalized the word “Creek” it is deduced that he was referring to the Creek Indian tribe and not a body of water.
Cost You an Arm and a Leg! Ha, never knew that. In George Washington’s days, there were no cameras. One’s image was either sculpted or painted. Some paintings of George Washington showed him standing behind a desk with one arm behind his back while others showed both legs and both arms. Prices charged by painters were not based on how many people were to be painted, but by how many limbs were to be painted. Arms and legs are ‘limbs,’ therefore painting them would cost the buyer more. Hence the expression, ‘Okay, but it’ll cost you an arm and a leg.’ (Artists know hands and arms are more difficult to paint).
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The term “Big Wig.” Here’s how they cooked this term up.
Not Playing With a Full Deck of Cards. Literally, a taxing issue.
As incredible as it sounds, men and women took baths only twice a year (May and October) Women kept their hair covered, while men shaved their heads (because of lice and bugs) and wore wigs. Wealthy men could afford good wigs made from wool. They couldn’t wash the wigs, so to clean them they would carve out a loaf of bread, put the wig in the shell, and bake it for 30 minutes. The heat would make the wig big and fluffy, hence the term ‘big wig... ‘ Today we often use the term ‘here comes the Big Wig’ because someone appears to be or is powerful and wealthy.
Common entertainment included playing cards. However, there was a tax levied when purchasing playing cards but only applicable to the ‘Ace of Spades.’ To avoid paying the tax, people would purchase 51 cards instead. Yet, since most games require 52 cards, these people were thought to be stupid or dumb because they weren’t ‘playing with a full deck.’
Chairman of the Board. Hmm, it’s really about wood. In the late 1700s, many houses consisted of a large room with only one chair. Commonly, a long wide board folded down from the wall and was used for dining. The ‘head of the household’ always sat in the chair while everyone else ate sitting on the floor. Occasionally a guest, who was usually a man, would be invited to sit in this chair during a meal.. To sit in the chair meant you were important and in charge. They called the one sitting in the chair the ‘chair man.’ Today in business, we use the expression or title ‘Chairman’ or ‘Chairman of the Board.’
Mind Your Own Bees Wax! OK, it’s time to face the truth. Ha! Personal hygiene left much room for improvement.. As a result, many women and men had developed acne scars by adulthood. The women would spread bee’s wax over their facial skin to smooth out their complexions. When they were speaking to each other, if a woman began to stare at another woman’s face she was told, ‘mind your own bee’s wax.’ Should the woman smile, the wax would crack, hence the term ‘crack a smile.’ In addition, when they sat too close to the fire, the wax would melt. Therefore the expression ‘losing face.’
Straight Laced. Literally a “fitting” comment. Ladies wore corsets, which would lace up in the front. A proper and dignified woman, as in ‘straight laced’ wore a tightly tied lace. 42
The Word “Gossip.” I’ll drink to that! Early politicians required feedback from the public to determine what the people considered important. Since there were no telephones, TVs or radios, the politicians sent their assistants to local taverns, pubs, and bars. They were told to ‘go sip’ some ale and listen to people’s conversations and political concerns. Many assistants were dispatched at different times. ‘You go sip here’ and ‘You go sip there.’ The two words ‘go sip’ were eventually combined when referring to the local opinion and, thus we have the term ‘gossip.’
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