Deana`s Auto Biz

/ DEALER EDITION /
“
Women
IN THE
”
Industry
SPONSORED BY
“
Women
IN THE
”
Industry
Dealer Reopens at Long Last
Colleen McDonald, Livonia Chrysler Jeep (MI) . . . . . . . . . . . . . . . 1
Mom-Daughter Car Dealership
Carries On in Oregon
Deana Eckman, Deana’s Auto Biz (OR) . . . . . . . . . . . . . . . . . . . . . . 7
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PROFILE
Dealer Reopens
at Long Last
C
A VICTIM OF THE PURGE OF 2009-2010 IS SELLING
CARS AGAIN • By Lillie Guyer
olleen
McDonald is a
franchised dealer again. It took
some doing.
McDonald in November
reopened Livonia Chrysler Jeep in
Livonia (MI), after a nearly 6-year
struggle in arbitration hearings
and court battles against Chrysler
Group, beginning in 2010.
It ended in a dealer win last
June at the highest court in the
land.
“We were very excited and
relieved when the U.S. Supreme
Court upheld the U.S. Court of
Appeals 3-0 published opinion in
our favor,” McDonald says.
“Women
in the
Industry”
Sponsored By
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Her store is among 32 Chrysler
dealerships nationwide to win
back their franchises. About
2,100 dealerships were closed
by General Motors and the thenChrysler Group as part of bankruptcy restructurings in the economic crisis of 2008-2009.
Of those closed, 789 were
Chrysler-Jeep-Dodge dealerships.
Chrysler pared nearly 25% of its
dealer body.
Post-bankruptcy, Fiat acquired
Chrysler and created Fiat Chrysler
Automobiles.
The dealer legal actions were
brought on by Section 747 of the
Consolidated Appropriations Act
of 2010, which gave dealers arbi-
“Excited and relieved,” Colleen McDonald says.
PROFILE
“
“IT’S
POSSIBLE
THERE
WILL BE A
FEW MORE
WHO WILL
REOPEN.”
HER ADVICE
TO THEM:
HANG IN
THERE.
”
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tration rights to win back their
shuttered stores.
In 2008, GM and Chrysler
received $80.7 billion in U.S.
Treasury TARP (Troubled Asset
Relief Program) loans to restructure their operations. The purpose was to restore profitability.
But a chief goal became paring
back the dealers.
The automakers’ decision to cut
dealers came after an automotive task force was appointed by
President Obama’s staff to oversee the GM and Chrysler bankruptcies. The task force under
Steve Rattner decided the two
automakers had too many dealers to be competitive.
TWO STORES STAY CLOSED
In addition to her Livonia store,
McDonald lost two other stores
in Michigan: Century Dodge in
Taylor and Holiday Chevrolet in
Farmington Hills.
The businesses were begun by
her father, Walt Norris in 1979.
Her husband, Dave McDonald, has
served as the general manager
and vice president.
Since coming back onboard, the
McDonalds set 2016 sales goals
that include 650 new vehicle sales
as a minimum sales requirement
from Chrysler.
The McDonalds did not arbitrate
the Chevrolet store. They also
did not win in arbitration for the
Dodge store.
Looking back, she says they
should not have arbitrated Dodge
along with the Chrysler-Jeep
franchises. “We should have had
separate hearings. I am sure if
we had, we would have won both
arbitrations,” she says.
She adds: “The Supreme
Court found no merit in Chrysler
Group’s (plea) to re-hear the
case.”
It was an expensive victory
though. Including reinstatement
and legal costs, it ran “well over
seven figures,” she says.
After they got the word, the
McDonalds began a gradual reopening. They received a “term
agreement” from Chrysler after
satisfying both building and
working-capital requirements,
she says.
PHOTO COPYRIGHT © MEDIOIMAGES/PHOTODISC/THINKSTOCK
Re-opening the Livonia
Chrysler-Jeep dealership meant
renovating the former site. The
McDonalds did that in record time
– about nine weeks. Their efforts
included sprucing up the showroom, improving the sales lot and
stocking the store with vehicles.
The McDonalds filed against
Chrysler group individually, but
as the legal process wore on the
Appeals Court lumped the arbitrating Michigan and Ohio dealers
together.
The dealership hired 32 employees (including 16 who worked
there before) and plans to add
about 10 more within the next
year.
SURVIVAL LESSONS
The lean years brought lessons
in survival. McDonald says they
were able to survive after the closures because they had “no debt
in our business or personal life.”
She also ran a Mitsubishi dealership from the Livonia site, which
helped to weather the storm, but
has since been closed.
Her attorney, Bob Davis, told
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PROFILE
Colleen
McDonald
‘had the
heart to
win.’
her later, “You had the heart to
win. You believed in what you
were doing.”
The business has changed in a
variety of ways over the years,
she says, citing among other
things the need for advanced
training and new skill sets.
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Chrysler provides much of the
training, but dealers pay for it,
she notes.
She characterizes the working
relationship with FCA as positive
as they reconnect with some people and connect with new ones at
the automaker.
McDonald is hopeful that some
Chrysler dealers still in litigation
will get back their franchises.
“There are a few dealers still
in litigation in other states,” she
says. “So it’s possible there will
be a few more who will reopen.”
Her advice to them: Hang in
there.
Dave McDonald, who has been
at the front lines along with his
wife, says the struggle was worth
it. They have big plans.
“In the upcoming year we will
focus our efforts on proper training for our employees and implement processes that will blow
away the competition when they
visit our service or sales department,” he says.
One sale at a time, he believes
“we will earn back our reputation” and their customers. WA
PROFILE
Deana Eckman and
daughter Shelley Whitney
(next page) at their
dealership.
“Women
in the
Industry”
Sponsored By
Mom-Daughter
Car Dealership
Carries On in Oregon
No big gig, says Deana Eckman of Deana’s Auto Biz
BY TOM BEAMAN
D
PROFILE
eana’s Auto
Biz sits on a
pie-shaped
patch of
asphalt,
maybe only 10,000 sq.-ft. (929
sq.-m.) in all, at the corner of U.S.
Highway 30 and SE 6th Street in
Pendleton, OR.
The dealership has no service
or parts departments and sells
less than 100 pre-owned units per
year. The 2-room office, no larger
than a shipping container, has
two desks, a sofa and a dachshund named Marley.
Deana’s Auto Biz is the automotive equivalent of Floyd’s Barber
Shop in the vintage TV program
“The Andy Griffith Show.”
“This is just a little, little, little
show,” says owner Deana (pronounced DEE-na) Eckman. “This
isn’t any big gig at all; it’s just me
and my daughter. Before that, it
was just me.”
However small, Deana’s Auto Biz
has survived over the years, serving the transportation needs of
the residents of Pendleton, which
saw its last new-car dealership
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leave town years ago.
Eckman hasn’t always been
a dealer. The Portland native
moved to Pendleton, about 150
miles (240 km) to the west, after
high school to work in production and as a janitor in the nowshuttered Monsanto fiberboard
plant in nearby Pilot Rock. After
12 years, life in the plant began to
wear on her.
“I just wanted to do something
different,” she recalls. “I have a few
family members in the Portland
area who are in the car business.
One of them said why don’t you try
selling cars? I always liked cars so I
thought I’d give it a try.”
She applied for a job and
ended up getting hired at the
now-closed Comrie Oldsmobile/
Cadillac in Pendleton. Eckman
sold new and used cars there
from 1989 to 2001 and later
served as finance manager.
Buoyed by the confidence and
experience gained over 12 years
with a franchise dealer, she decided her next step would be to
open her current business.
“I just wanted to get out on my
PROFILE
own,” Eckman says. “I rented a
lot from a lady who was moving
out of state, then I purchased our
own property five years later.”
The auto industry was booming in 2001 when the National
Independent Automobile Dealers
Assn. listed 54,622 member dealers. The recession slashed that
number to 36,418 in 2009. About
40 million used cars are sold
annually by franchised dealers,
independent dealers and private
parties.
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O
ver the years, Pendleton,
population of about
17,000, had been known
as wheat and rodeo town. It’s
the birthplace of the Pendleton
Woolen Mills, and although company headquarters is now in
Portland the company’s iconic
blankets are still produced in the
original facility.
Pendleton’s unemployment rate
is 7.4% and per-capital income
$22,893, according to U.S. Census
Bureau.
“The economy is pretty stagnant,” says East Oregonian
Managing Editor Daniel Watten­
burger. “We haven’t come back as
strongly as the urban areas.”
“Everything has kind of
tanked,” says a representative
of the Pendleton Chamber of
Commerce. But Deana’s Auto Biz
has survived.
“I had a low overhead and for
14 years it was just me,” Eckman
says. “I stayed small and just
rode it out. Sales were not really
affected.”
She and daughter Shelley
Whitney, who joined the dealer-
PROFILE
ship last year after working as a
manager of a Wells Fargo Bank
branch in Pendleton, are proud of
their store’s hometown feel.
“We like to sit down and get to
know our customers,” Eckman
says. “I’ve got customers who
come in just to visit. They appreciate us being a female-owned
dealership. Guys do a great job,
but women just have a little more
finesse and are better listeners.”
Whitney says post-transaction
relationships are important. “We
regularly touch base with customers. We see them around town
and at the grocery store. We send
them birthday and Christmas
cards.”
Eckman spends $400 to $500
a month for small display ads in
local newspapers, but she says
the majority of her business
comes from repeat business and
referrals.
“Word of mouth spreads quickly
in a small town, and the dealerships that last are the ones that
do right by their customers,” says
Andy Friedlander, NIADA’s director-communications.
“
I’VE GOT
CUSTOMERS
WHO COME
IN JUST TO
VISIT. THEY
APPRECIATE
US BEING
A FEMALEOWNED
DEALERSHIP.
”
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T
rying to find quality preowned vehicles has become
more of a challenge for
Deana’s Auto Biz since the local
franchise dealers left town.
“When we had new-car dealers
here, I used to purchase used cars
from them that they had been carrying for 60 or 90 days and wanted
to get rid of,” she says. “Those
were the easy days, when you
could hook up with a local dealer
and take a look at their front line
stuff. That really made it easy. But
now things have changed.”
Another challenge: “Franchise
dealers have become more
aggressive in pursuing used-car
sales, which has taken some of
the market share away from independents over the past several
years,” says Friedlander.
Eckman today acquires most of
her stock at auctions in Portland
and Spokane, WA, online and
through trade-ins. Enterprise and
Hertz rental agencies are steady
sources as well.
“You just have to know what the
market is, who you’re selling to
and what’s selling the most,” she
PROFILE
says. “If Chevy Cruzes are
hot, we try to keep one or
two in stock. It’s a blue- collar area so we have to keep
prices moderate.
“We watch what we sell. If it’s a
good product, and it seems like
we can’t keep it on the lot, we try
to keep it going like that. Younger
people want navigation (systems),
so we try to (stock) those vehicles.”
“D
YOU JUST
HAVE TO
KNOW
WHAT THE
MARKET IS,
WHO YOU’RE
SELLING TO
AND WHAT’S
SELLING
THE MOST.
eana’s Auto Biz is still
able to offer finance and
insurance products such
as service plans and gap insurance. Service work is referred to
local shops.
“We’ve cultivated relationships
with some really good mechanics here in town,” Whitney says.
“They’re certified, they do a good
job and they understand we have
a business to run. They take care
of us.”
Whitney’s experience in the
lending industry brings specialized expertise to the business.
“For the past 12 or 13 years I’ve
(focused) more on the subprime
market,” she says. “I worked at
”
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Eckman: “If Chevy Cruzes are hot,
we try to keep one or two in stock.”
American General Finance, Citi
Financial, and then Wells Fargo. If
anyone has had any credit blemishes in their past, we know how
to work with that.
“It takes a little more elbow
grease to get something like that
done but we can get it done,
that’s for sure. We have great relations with lenders who cater to
that kind of clientele.”
Like many car dealers, Deana’s
Auto Biz wants to grow, but not
in the same way new- car dealers
do. There will be no new shiny
showroom or added acreage.
“I think we’re going to stay
here,” Whitney says. “There’s
plenty of space to accommodate
what we want to do. We don’t
want to expand the size of the
car lot. We want to keep it small
because it’s just my mom and me
working here.” WA