grossman chevrolet

GROSSMANCHEVROLET
TheautomobileranksasoneofAmerica's
bestsuccessstories.The belovedcar has
also changesthe lives of thousandsof
businessownersassociatedwith the industry. One such companyis Grossman
ChevroletCadillacin Burnsville.
Its history datesback three generations to l9l9 when L.S. Grossman
launchedhis own car dealershipafter a
year of selling cars for anotherdealer.
Startinga car dealershipin those days
was a very dubiousendeavor.But L.S.
was a natural risk taker and didn't shy
away from the chancyventure.
With the new business,he wastaking
a big gamble that the popularity of the
automobilewould skyrocket.Indeed,it
GrossmanbLakc Strcetlrcation circa 1940.
did. In just oneyearfrom l9l8 to 1919,
carsin the U.S.
the numberof passenger
In thosedaysthe
forefrontof the industry.Bythe 1950s
doubledto 1,651,625.
his efforts had paid off handsomely,
averagecost of a new car was $826 and
still considereda luxury sincethe aver- andGrossmanChevrolethadgrown into
age incomewas only $1,125per year. one of the largest dealershipsin the
Midwest. It was about
this time that L.S.'s
son, Harold,joined his
father in the booming
business.While growing up, Harold had
spentsummershelping
out at the dealership
so it was no surprise
when he signed on
full-time. Harold's
brother, Burton, also
came on board as an
employeeat the dealership-making it a
true family business.
By 1967whenL.S. decidedto retire,
TheLal<e&rcet shovfloor in 1949.
he had built the companyup to about
200 employees.Harold steppedup to
buy the dealershipfrom him, and Burton
Becauseof this, dealersat the time didn't
have vast car lots like they do today. opted to move on to other endeavorsat
that time. To fill that void, Harold
like L.S., who had
Instead,businessmen
brought in his son Mike to becomean
a tiny lot at 1304EastLakeStreet,would
integral part of the team.
buy one car from the manufacturerand
ChevUnderL.S.'swatch,Grossman
sell it beforepurchasinganothervehicle.
nearlyfive decades
JustasL.S.predicted,the automobile rolet hadexperienced
of growth, but hard times were on the
caughton in popularityand quickly behorizon.An economicdownslidein the
camea necessityratherthan simply a
andhigh
1970sresultedin fuel shortages
luxury item. His businessexpandedwith
interestrates,which put the brakeson
the market,and he soon had cars lined
car sales.Although Harold had learned
up bumper to bumper on the lot. By
the ropes from his father,his business
the end of World War II there were so
on EastLake Street philosophycouldn't have been more
manycar dealerships
different. While L.S. thrived on taking
that peoplecalledit "AutomobileRow."
risks and expandingthe company,his
L.S. continuedto take risks with
tha
antarnricc
anrl
rrrns
altvatls
af
fha
snn fnvnred e different annroach which
allowedthe businessto
stay open during this
difficult time.
Even as salessputtered, Harold always
vowed to "do the right
thing" for customersand
employees-regardless
of the bottom line. His
belief wasthat if you did
the right thing, the economicswould work out
on its own. That philosophy createdsome
very loyal customers
and someequally loyal
employees.
Severalmembersof the dealership's
staff logged twenty,thirty, or forty years
of service for the company.One gentleman even spentmore than fifty years on
the payroll. Many of those employees
have since retired, but they've been replaced by a new guard of equally loyal
workers who have alreadybeen on staff
for twenty to twenty-fiveyears.
When Mike cameon board full-time
at the age of twenty-six in 1967,he was
no newcomerto the business.As a young
lad he had sold usedcarsin the summertime, and as a teenagerhe had worked in
the servicedepartment.His first full+ime
position was in salesmanagement.
Initially, Mike was mentoredby one
of the dealership'smost experienced
managersand soakedup as much informationashe could.But his educationwas
cut short when his tutor suffereda heart
attackin 1968andwasunableto continue
working.ThetragedyforcedMike into the
despitehis limrole of generalmanager,
ited experience.It provedto be a trial by
fire for Mike, who was forcedto learn on
thejob.
From the get-go,Mike and Harold
were at oddswhenit cameto runningthe
Mike was
business.Like his grandfather,
felt
confined
by
risk-taker
and
a natural
When
approach.
his father'sconservative
the car industrytook a nosedivein the
1970s,Mike cameup with a diceyplanto
keep the companyon the upswing.His
strategy was to buy dealershipsthat
were in decline,build thembackup, and
then sell them for a profit. When Mike
first approachedhis father with the
plan, Harold was dead-setagainst it.
Mike wasfinally able
With persistence,
to convincehim to eive it a trv.
ln 1974GrossmanChevrolet acquired
a slumpingChryslerDealership.Mike sent
one of his own managersto the new location to breathe life into it. The plan
worked, and Mike sold the revived dealership to the former manager at a profit.
When he showed Harold the check from
the sale, Harold became a firm believer
in Mike's plan.
The strategy not only bolstered the
coffers of GrossmanChevrolet, but it also
provided a golden opportunity for one of
his employeesto take a leap and become
a businessowner. That proved to be even
more gratifying for Mike than making
a profit on the sale. Following that success, Mike began searching for other
dealershipsto acquire and began grooming other managers within the ranks,
with the hopes of giving them a shot at
businessownership.
Mike's practiceof rewarding workers
who showed promise began long before
he joined the family car business.In his
former position as a wholesale parts jobber, Mike was always on the lookout for
t a l e n t e d e m p l o y e e s .W h e n h e s p o t t e d
TheremodeledBurnsvillebuilding, circa 2005.
someonewho stood out, he advanced
themto the next level.Thatbelief in employeesandthewillingnessto let workers
developto thebestoftheirpotentialpaid
offfor everyoneinvolved.It's no wonder
Mike continuedwith the samepolicy at
Grossman
Chevrolet.
Followingthat first success
with the
acquisition,Mike continuedto fosteren-
The remodeled Lal<cStreetlocation,
trepreneurship
amonghis top employees.
GrossmanChevroletboughtfour additional dealerships
andsoldthreeofthem
to their formermanagers,
at a profit.
As the dealership
continued
to hold
up under the economicdownturn,the
needarosefor additionalspace.In 1978
GrossmanChevroletmovedto its current
locationon West l4lst Street.It's there
that 600 to 700 new and used cars and
trucks and a state-of-theart serviceand
parts facility sprawl across sixteen
acres.Theultra-modernsite sitsat the
crossroadsof two important interstate
freewaysfor the Twin Cities area, making accessa snap.
Two years after the historic move
from their humble beginningson East
Lake Street,Mike took over the day-today operationsof the business.After
spendinghis entire careerwith the dealership,Harold walked away from it in
1990 when Mike bought it from him
outright. Even though Harold no longer
held an official role at the company,
Mike still liked to run ideasby his father.
In 1994Mike introduceda policy that
Haroldthoughtwassheerfolly. Mike went
againstthe grainofmost otherdealerships
in the industryand set a "One Best Price
for Everyone"policy, which meansno
haggling or negotiating.He also put the
salespeople
on salarywith commissions,
basednot only on salesvolume but also
on customersatisfaction.
His reasoningbehindthe moveharkened back to the "do the right thing"
messagehe had learned from Harold.
Over the years,Mike had noticed other
TheBurnsville usedcarfacility, vhich utas
built in 1999.
rr
once againas a leader
in the area. In fact,
Mike's willingness
to take risks and go
againstthe grain has
increasedthe value
of the businesstremendously.
Although he has
introducedsomepolicies that didn't fit in
with his father's businessphilosophy,Mike
continues to follow
many of the basic tenets Harold and L.S.
shared.Thecompany's
longtime
motto
of
Burnsvilleshowfloonchta 2005.
"Bargains, Service,
Integrity" hangson a sign in Mike's office, and he has vowed neverto stray
from thosemainstays.He is committed
dealershipsincreasinglyengagingin
practicesthatseemedunfairto consumers, to offering the best pricesto customers,
and he wantedno part of it. As a reaction providing the best serviceafter the sale,
to that unseemlytrend in the industry
and maintaining his integrity.
Mike initiated the one-pricepolicy as a
To that end, Mike has made a conway to keepeverythingaboveboard.
sciouschoice to make all the company's
Mike figured that there was no way
advertisingvery straightforward.He feels
customerscouldbe asadeptat negotiating that somefirms aremore interestedin sella car salewhenthey only do it onceevery
ing the "siz:,le" rather than the steak,but
three to five years-and his salespeople Mike prefersto tell it like it is. Sometimes
werenegotiatingcarsaleson a daily basis. he has optedto shunadvertisingin favor
In addition,he felt thesalespeople
would
of community involvementas a way to
be moreinclinedto "do the right thing" if
spreadthe word aboutthe dealership.For
their bonuseswererelianton customersatexample,the businesshas sponsored
isfactioninsteadofsolely beingbasedon
severalbasketballclinics for local youth,
salesnumbers.Theradicalnotion worked
After more than eighty years in the
and GrossmanChevrolethas emerged area,the companyhasearneda solidreputation for fairnessand service.That has
helpedthe dealershipreachsalesfigures
that L.S. could never have imagined.
Thesedays,the firm sells approximately
3,000 new and used cars,trucks, and
SUVs eachyear.And Mike continuesto
find innovativewaysto movethebusiness
into the next gear.In 2005 the company
addedCadillacto its line of vehiclesand
officially becameGrossmanChevrolet
Cadillac.And althoughthe firm hashad
a history of makingacquisitionsandthen
selling them off, Mike swearsthis one is
hereto stay.
As the auto industry continuesto
evolve,there'sno doubtthattheGrossman
operationwill maintainits place as a
leader.The road aheadpromisestwists
and turns, but yearsof experienceand a
willingnessto try new thingswill help the
companyedgeout the competition.And
story.
that's a trueAmericansuccess