Tuesday, May 05, 2009

Hasn’t Drive a Ford Lately; Not Likely to Any Time Soon

We here at Not Making This Up are big fans of Alan Mulally.

Mulally is the ex-Boeing genius hired to turn around Ford Motor Company three short years ago, and he is the individual responsible for the fact that Ford has not filed Chapter 11, has not taken government funds, and has not and likely will not require a rescue at the hands of American taxpayers.

Mulally is responsible for Ford’s rescue because he’s the guy who decided Ford would borrow every dollar it could get its hands on while credit was easy and nobody else in Detroit could see the same writing on the wall.

But if Mulally is going to turn Ford into a good business, rather than just a survivor, he’s going to have to sell cars. And if my mother’s experience is anything to judge by, Mulally has his hands full.

My mother has been a Lexus driver ever since American car quality started going into slogans instead of the cars themselves. But she recently decided—like many Americans, I’d bet—that since Ford seemed to be doing a good job against all the odds, she’d help the team and buy a Ford.

Now, you would think the local Ford dealer would be thrilled. After all, most businesses in Florida haven’t exactly been shooting the lights out lately, let alone car dealers.

Let alone American car dealers.

But this particular Ford dealer could not be bothered—or at least this particular salesman couldn’t.

Instead of asking a thing about her driving habits, what she planned to do with the car, how she planned to used it, he launched straight into the Guy Question, “What are you looking for?”

As if a grandmother is going to say “Well I want a turbo-charged six-cylinder twenty-five-hundred-CC engine with a Grampton Cycle Frapper and eight-way, hand-tied seats.”

Then, without so much as getting her name and address as she backed slowly away from him, the salesman at the Ford dealership let her go…on down the road back to the Lexus guy.

Jeff Matthews
I Am Not Making This Up

© 2009 NotMakingThisUp, LLC

The content contained in this blog represents the opinions of Mr. Matthews.
Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. Nor are these comments meant to be a solicitation of business in any way: such inquiries will not be responded to. This content is intended solely for the entertainment of the reader, and the author.


Anonymous said...

Jeff; I had exactly the opposite experience a few weeks ago.

I'm a 45, male, and was thinking of replacing my Ford Escape for a newer model (its a 2002). The sales guy, older and crusty sat me down in his office, asked me how much millage I had on the car (30k) and what I liked about the car, and what were my requirements. He also had a good look at my current car (for appraisal value I first thought)

At the end of this discussion he told me: There is not a car in our lot that you will want to buy, your millage is so low, and your car is fully paid-off, and hence until it starts acting up (he though I was good for another 3-4 years), there is no car that would fit 'my" requirements more than the car I currently drove.

He gave me his card, and said don't waste your time, you are just browsing your current car is in great shape good for a few years, if you still want to replace it in 2011 give me a call.

Honestly, it was probably the best sales pitched I ever heard

Anonymous said...

I would have put your mom in a Triton V-8 F-150. Best truck ever.

Big J said...

Yeah, domestic car dealers/guys are brutes. I used to work for Ford not long ago (2008) and the difference between domestic and import dealers was night and day...import guys are wine and cheese pussycats while domestic guys are beer and brats, blowtorch and tongs guys. This is a severe problem going forward but like all the other issues it is largely a problem of their own making. Whenever I called on one of these dealers I found that every instinct on how 'not' to do business somehow got ingrained in these guys as standard operating procedure, and so they do a great job turning buyers into shoppers. Mulally gets kudos for trying but the problem is still immense. When the franchise laws get broken/overturned and it becomes easy to terminate dealers, only then will this get better. Right now it s a huge problem just getting rid of one dealer let alone hundreds...one dealer took three years and over a mil to get rid of. These guys are like furniture...you can't get rid of them, lol.

Anonymous said...

The dealer network is under stress - particularly at GM. The parent companies treat these guys so badly - employee pricing, overlapping territories, wholesale cancelling of badges without any compensation... If they aren't selling trucks they have very little going - and much fixed costs.

steve said...

she had her mind set on the Lexus before she even entered the Ford dealership

Anonymous said...

That's a pretty harsh assessment of a huge company based on the behavior of one person, who isn't even employed by Ford.

That said, I comend your grandmother for giving Ford a chance.

May I suggest a follow up to the dealer to explain her experience and make sure you mention that you went and bougt a Lexus insead.

Jeff Matthews said...

"Steve" didn't read the post. Probably "Steve" works for one of the Big 3, which is why they're in trouble--not listening to what their customers are saying.


Josh Morgan said...

I ran into the exact same kind of language from a car dealer on our local news last night. Don't sell, help people buy. Why is that so hard?


Anonymous said...

looks like a principal agent problem - which pretty much infects all of American business. Get your commission, whether its making loans to 14K strawberry pickers to buy 750K houses, or selling cars. Just make the quarterly number - don't worry about repeat business.

Nick said...

The dealerships and their protection racket, state franchise laws, are the bane of the domestic autos. The cars improved years back but the dealership experience has stayed awful. These places are the face of the car companies and they are ugly mugs. I drive American cars only but I won't walk into the dealerships here in Detroit. You think there is an entitlement issue with labor? These jokers at the dealership wrote that book.

malcolmm said...

If I based my purchase decision on what the car sales people are like, I never would have bought my current car - a Toyota Matrix.

The first Toyota dealer I went to wouldn't even look at my trade in, a low milage Honda Civic. Then I asked him about the availability of the Matrix in my favourite colour, yellow. He told me they no longer make it in yellow, because yellow was too popular. Obviously the reverse is true, yellow isn't popular, but this guy would say whatever he thought I wanted to hear.

Idiotic car sales people are everywhere, I did my own research and ended up using a broker - who bought my trade in for a lot more than I was expecting.

Anonymous said...

You gotta respect what Ford has done. I've driven GM and Toyotas for the past 30 years, but I'm going to look real hard at Ford when it comes time.

If I buy, it would be my first Ford.

Anonymous said...

Ford passes Toyota in market share


Also saw on CNBC this am that they have gained about 2 percentage points over the other manufacturers.

Lance said...

She might have had the same experience in a Toyota dealership.

A couple of years ago we decided we probably wanted a Prius. So on a Saturday morning my family went into our nearest dealer. A guy came up to us, and we said we were interested in a Prius. His first words? "What package do you want?" I still don't know what that means.

We walked out, drove to our second nearest Toyota dealer and bought a Prius that day.

bluewingcapital said...

There's good sales people and bad ones. That's not the manufacturer's fault.
Ford's bigger problem is resale value on new vehicles. I needed an SUV with 3rd row seats for mountain travels and settled on a low mileage Eddie Bauer Explorer. Paid $21K at the dealership for a vehicle that MSRP'd at $34K+ a year earlier. Assume I could have paid $31K new, the depreciation was 29% in 1 year!
I would NEVER buy a brand new Explorer!

Tahoe Kid said...

To be fair, the problem is not limited to Ford nor is it limited to the sales process. I had such a bad experience with a Ford minivan but only on the service side. The car was purchased new from a Ford dealership with a "One price-No haggle" pricing strategy. That part was easy and the price was surprisingly fair. However, the downside was owning the Ford minivan that regulary cost $1000-$2000 per service call. Insane. And the new engine needed at 85k miles was the worst. Most of the service department advisors were like hungry wolves when my wife brought in the car with kids in tow. I finally gave up, donated the car and have owned Hondas ever since. BTW, I never buy cars from dealers anymore. I only use a car broker. Total time from start to finish has been two hours or less. Tell them what you want (model, color, options) and they shop price and deliver it for $500 plus a kickback from the dealer (paid by todealer to broker). The prices are great.

Anonymous said...

She should have gone to a Lincoln dealer, that would have been a fairer comp. I got one in 2007 and the sales people were fine.

Agreed the sales guy should have been more excited maybe its harder now because customers are buying so few cars of all types.

Anonymous said...

I went to a GM dealership and said that I was interested in purchasing a newer model of the car I own 2005 model (and drove up in). I was interested if the auto press reports were correct about the car being upgraded for the 2009 model year...
None of the salesmen knew much about that...
I already own their product, and was well dressed that day...
I wondered if I could test drive one. They said I could test drive one after I bought it. They also said if they let me test drive one, they would be fired like a shot out of a cannon.
I wondered if they had any sales brochures or literature. They said they sometimes got some, but they saved it for the buyer of each car, and each salesman got a copy too. None were available to be handed out to prospective purchasers. They suggested I look on the internet.
Thinking that this was a "weird" dealership, I went to two other dealerships and got similar treatment.
How do they expect to sell cars like this? Does GM know what is going on at their dealerships?
I also got similar treatment about purchasing a Cadillac CTS-V.