I’ve been trying to put some things about the automotive industry into some sort of mental perspective lately and quite frankly it’s a challenge.
Now, both GM and Chrysler are in Chapter 11. Bear in mind that this level of bankruptcy is not necessarily a bad thing. Think major airlines. Seemingly, most of the major carriers have filed Chapter 11 at least once and yet airplanes continue to fly toting passengers to their destinations. The only domestic automaker which seems impervious (barely) to the Chapter 11 flu is Ford. Ford appears to have been able to make many of the changes needed in order to weather this “perfect storm”.
That said, there are some who are questioning why or whether or not there is a need for domestic automakers. I tend to think that there is but remain mystified at our seeming inability to sustain the industry domestically.
I marvel at the notion that we have 3 American automakers all of which to one degree or another are floundering. And yet, by my count there are 7 Japanese automakers doing business in the U.S. (I’ll list them for you: Toyota, Honda, Nissan, Subaru, Mazda, Mitsubishi and Suzuki) along with 4 German manufacturers (Mercedes, BMW, Audi and VW). Interesting.
So what’s the difference? The answer to that would take people with far more expertise than I have untold volumes to dissect, discuss and debate. So what’s the short version?
Much has been made of labor costs and labor unions and legacy costs. This has been a burden which has bedeviled the Detroit 3 for decades. Unfortunately it has never been resolved due to intransigence which has led to the whittling away of union benefits but which has also led to an erosion of the Detroit 3’s integrity. The final concessions being made now include a 17.5% ownership position in GM by a UAW retiree health care trust fund. Who would have thought that the UAW would essentially own a big chunk of an automaker? And even with that the Ch 11 filing could not be avoided. And of course, the majority ownership of GM will be the U.S. government at 60% with the Canadian government in third place at 12%.
These costs have seriously inhibited the capability of the Detroit 3 to innovate, engineer and make quality vehicles at a price point which consumers find attractive without the additional major expense of incentives of up to 20% of the retail price of the vehicle.
More importantly, the Detroit 3 has never embraced management processes which are streamlined, responsive to change and forward thinking. Processes are ponderous and inhibit the ability to introduce models which meet changing consumer needs and tastes on any kind of timely basis. Toyota, Honda and Nissan all introduced new sub-compact models 3 years ago in the Yaris, Fit and Versa.
To date none of the Detroit 3 has managed to come up with a comparable model. If the 3 largest Japanese manufacturers can introduce vehicles like this (all in the same year) positioned to fit changing driving habits due to fuel prices, why couldn’t the Detroit 3? Like the “J3” the “D3” employ highly skilled and creative engineers and designers. What was the difference? In a word, the difference was institutional. Is forward thinking inhibited by management structure, legacy costs or both? I tend to think it’s a function of both.
Detroit’s ponderous monoliths are doubly handicapped by a large “dealer body” which is present in virtually every marketplace in America which can justify a Chamber of Commerce. Not so with import manufacturers.
With its restructuring, GM will be closing up to 40% of its franchise dealers (that includes Hummer, Pontiac, Saturn and Saab). Chrysler has notified 900 of its intention to terminate their franchises and untold hundreds of Ford/Lincoln/Mercury dealers have closed or consolidated.
This will help the D3 to have a sustainable dealer-body. Let’s put it this way, Toyota has managed to become the largest selling manufacturer with about 1700 dealerships while GM has had in excess of 4000.
Domestic manufacturers dramatically expanded their dealership base following World War II when GIs were coming home. Auto manufacturers had excess capacity based on their expansion as war industries. GIs wanted cars, manufacturers wanted to make them—a perfect marriage. Dealerships expanded rapidly, serving small communities throughout the nation. In the 1970’s when Asian makes were introduced to the U.S., the development pattern of communities and economic bases was largely set and it was easier for Asian manufacturers/distributors to target the dominant markets for the greatest efficiency of penetration. And they were incredibly successful at doing that.
So domestic manufacturers have had the additional disadvantage of a far larger body of dealerships—many of them small, serving small markets and marginally profitable. Although in these markets, the importance of the dealership to the fabric of the community is often times substantial.
The dealer-body is vital to the success of the manufacturer. They are independently owned franchises. However, one of the biggest differences between a McDonald’s franchise and an automobile franchise is that at McDonalds you not only have the facility but you make and sell the food the McDonald’s way too. With an auto dealership, you buy the wholesale product and then merchandise and sell it according to loose guidelines. This has led to a great deal of consternation over the decades for dealers, manufacturers and consumers (and perhaps that’s putting it mildly).
So, there are multiple dimensions to this issue on both a micro and macro level. Will direct government involvement help substantially to revive and restructure it? In all likelihood, it’s the only chance the domestic auto industry has.
And finally, is a domestic auto industry (D3) important to America? Let’s go back to earlier in this post; there are 3 domestic auto manufacturers doing business in the U.S. There are 7 Japanese and 4 German manufacturers as well as others. The erosion of the market segment dramatically escalated over the last 5 years for a variety of reasons—but let’s focus on the most obvious—because the D3 relied on fuel inefficient, though popular “body on frame” SUVs and pick-ups too long for profitability. They put all their eggs in that basket and then failed to respond to changing needs and trends. Add to that, dramatic increases in fuel prices topping out at $4.50 a gallon in 2008 and the “perfect storm” of conditions for catastrophe were present and the domestic industry fell victim.
Can this industry recover? It has to. It’s that important to American jobs, society and the American economy. It won’t be easy. But it’s possible. And hopefully, like the airlines, the industry will be back, serving the public in a seamless fashion as it works through Chapter 11 and beyond to do a better job of serving the American public.
Monday, June 1, 2009
Friday, May 29, 2009
Chrysler to Iacocca--Return Your Demo! Can Detroit Come Back?
This morning, Reuters is reporting that former Chrysler CEO and icon Lee Iacocca will be losing both his pension and lifetime company vehicle as Chrysler proceeds through bankruptcy.
Now, I don’t think that Iacocca losing his company car is any huge deal to him. He can probably afford to buy any vehicle he wants. But, the article did remind us that it was Iacocca who became a visible spokesperson for Chrysler appearing in numerous commercials proclaiming “If you can find a better car—buy it.”
This was back in the early 80’s and had more to do with the resurgence of Chrysler Corporation than did Ricardo Montalban’s pitch for the Chrysler Cordoba with its’ “fine Corinthian leather” in his inimitable accent.
Montalban, like Billy Mays, was a paid pitchman. It was entertaining though. But when Iacocca extolled the virtues of his products, we believed him. He was Lee Iacocca—the CEO, a giant in the auto industry. He was just talking to us on the TV and being honest and upfront (at least in our perceptions). Iacocca was talking about the value of the vehicles made by his company. And that’s where I’m heading with this.
The Detroit 3 are all in trouble. The only one which seems to be steadily working its way out of it is Ford. As we all know both GM and Chrysler are in bankruptcy. Very simplistically the way they’re going to survive and emerge from bankruptcy is through careful re-organization and a commitment to doing things right. A commitment which, quite frankly, just hasn’t been there for a while.
Let’s get back to that value idea for a bit. As an automotive sales trainer, the absolute foundation of sales is this from Zig Ziglar: “Buying occurs when value exceeds price.” It’s that simple. Except that too many sales staff, sales managers, dealerships and manufacturers have bastardized their approach to getting value to exceed price by discounting and rebating first and building value either not at all or as a secondary strategy (i.e. “lookit all you’re getting for a dirt cheap price”).
Back in the day, someone at Chrysler (or their advertising agency) knew this and enlisted Iacocca’s active participation. He was the first of the CEO’s to pitch his own product and no one did it better than him until Chrysler tried to reprise the approach in 2006 with “Dr. Z”—Dieter Zetsche, the Chairman of DaimlerChrysler.
Domestic manufacturers have to first engineer and build value into the products that they’re going to offer to the public. This basic rule is one which hasn’t been done well enough or often enough over the course of the last 3 decades or more by the Detroit 3. Even then it will be hard to get customers to return to their products.
“We build value when we talk to customers about what’s relevant to them,” is the next maxim that I work to impress upon sales staff as a trainer. And, the only way to find out what is relevant is to ask questions. The manufacturers are going to have to ask potential customers some questions about the products they want to own and drive and then work like hell to engineer it, make it and market it.
And finally (bear in mind that this is all in the 1st 10 or 15 minutes of the basic sales training class) as I trainer I cover the ways in which value is built with customers: “We build value when we talk to the customer in terms of what we do more of, better than and differently than anyone else when it comes to ourselves, our dealership and our product.”
Here’s my point. Most organizations don’t train their staff to approach sales in this way and yet it’s the optimal way to do it. Most organizations put the emphasis on sales at the end of the line—after the product is made and delivered to the retailer (remember that’s when the sale is counted by the manufacturer).
Chrysler and GM have an onerous task ahead when it comes to the financial and legal ramifications of their bankruptcy filings. But when all is said and done they are companies which design, build and market vehicles. Ultimately they have to do that and do it well.
What if the Detroit 3 reversed the process? Take a page out of Tom Peters. Put the focus on determining what is relevant to customers about the vehicles they wish to own and drive. Be “more, better and different” than any of the competing automakers when it comes to focusing on and responding to the needs and wants of consumers. And then deliver it to the dealer-body ready to be sold to the American consumer.
As these companies work to emerge from bankruptcy, they are going to have to do things to re-instill faith and confidence from the buying public. Maybe this is the way to go about doing it. And then maybe Lee Iacocca can get his car back.
Now, I don’t think that Iacocca losing his company car is any huge deal to him. He can probably afford to buy any vehicle he wants. But, the article did remind us that it was Iacocca who became a visible spokesperson for Chrysler appearing in numerous commercials proclaiming “If you can find a better car—buy it.”
This was back in the early 80’s and had more to do with the resurgence of Chrysler Corporation than did Ricardo Montalban’s pitch for the Chrysler Cordoba with its’ “fine Corinthian leather” in his inimitable accent.
Montalban, like Billy Mays, was a paid pitchman. It was entertaining though. But when Iacocca extolled the virtues of his products, we believed him. He was Lee Iacocca—the CEO, a giant in the auto industry. He was just talking to us on the TV and being honest and upfront (at least in our perceptions). Iacocca was talking about the value of the vehicles made by his company. And that’s where I’m heading with this.
The Detroit 3 are all in trouble. The only one which seems to be steadily working its way out of it is Ford. As we all know both GM and Chrysler are in bankruptcy. Very simplistically the way they’re going to survive and emerge from bankruptcy is through careful re-organization and a commitment to doing things right. A commitment which, quite frankly, just hasn’t been there for a while.
Let’s get back to that value idea for a bit. As an automotive sales trainer, the absolute foundation of sales is this from Zig Ziglar: “Buying occurs when value exceeds price.” It’s that simple. Except that too many sales staff, sales managers, dealerships and manufacturers have bastardized their approach to getting value to exceed price by discounting and rebating first and building value either not at all or as a secondary strategy (i.e. “lookit all you’re getting for a dirt cheap price”).
Back in the day, someone at Chrysler (or their advertising agency) knew this and enlisted Iacocca’s active participation. He was the first of the CEO’s to pitch his own product and no one did it better than him until Chrysler tried to reprise the approach in 2006 with “Dr. Z”—Dieter Zetsche, the Chairman of DaimlerChrysler.
Domestic manufacturers have to first engineer and build value into the products that they’re going to offer to the public. This basic rule is one which hasn’t been done well enough or often enough over the course of the last 3 decades or more by the Detroit 3. Even then it will be hard to get customers to return to their products.
“We build value when we talk to customers about what’s relevant to them,” is the next maxim that I work to impress upon sales staff as a trainer. And, the only way to find out what is relevant is to ask questions. The manufacturers are going to have to ask potential customers some questions about the products they want to own and drive and then work like hell to engineer it, make it and market it.
And finally (bear in mind that this is all in the 1st 10 or 15 minutes of the basic sales training class) as I trainer I cover the ways in which value is built with customers: “We build value when we talk to the customer in terms of what we do more of, better than and differently than anyone else when it comes to ourselves, our dealership and our product.”
Here’s my point. Most organizations don’t train their staff to approach sales in this way and yet it’s the optimal way to do it. Most organizations put the emphasis on sales at the end of the line—after the product is made and delivered to the retailer (remember that’s when the sale is counted by the manufacturer).
Chrysler and GM have an onerous task ahead when it comes to the financial and legal ramifications of their bankruptcy filings. But when all is said and done they are companies which design, build and market vehicles. Ultimately they have to do that and do it well.
What if the Detroit 3 reversed the process? Take a page out of Tom Peters. Put the focus on determining what is relevant to customers about the vehicles they wish to own and drive. Be “more, better and different” than any of the competing automakers when it comes to focusing on and responding to the needs and wants of consumers. And then deliver it to the dealer-body ready to be sold to the American consumer.
As these companies work to emerge from bankruptcy, they are going to have to do things to re-instill faith and confidence from the buying public. Maybe this is the way to go about doing it. And then maybe Lee Iacocca can get his car back.
Wednesday, May 27, 2009
Car Buying 101: What to do with a Trade-In
Note: See my post from April 20 "Is Now a Good Time to Buy a Car" for the 1st 2 Rules of car buying. http://just-walt.blogspot.com/2009/04/is-now-good-time-to-buy-car.html Rule #1 Start your shopping at home and Rule #2 Shop for your money before you go to a dealership. This post starts with Rule #3.
In car sales, over 80% of transactions involve a trade. Chances are that you’re already driving a car when you want to buy a different one and you’re thinking of “trading it in”.
As a profitability and sales training consultant in the auto industry I have encountered various ways this is handled at hundreds of dealerships. And, in a lot of them it’s not handled very well. The vast majority of customers don’t know how to handle it either.
Rule Number 3: Be realistic about your trade
A few simple steps will help you as you’re getting ready to buy a new vehicle and trade your old vehicle.
Step 1— know the pay-off amount if you still owe a loan balance on your trade-in. This is easy to do either online or by phone. Most loans now have a website where you can access the pay-off amount. You can usually find it by looking at your loan documents. And most lenders have a phone number where you can find out the pay-off. It’s usually automated and all you typically need is either your loan number or your social security number or both.
Know the pay-off amount! It will be critical in finding out whether or not you owe more than the vehicle is worth. And the pay-off is NOT the same as the sum of the remaining payments.
Step 2—get an idea of how much your trade is worth. This is easy enough to do as well and you need to go back to Rule #3—be realistic about your trade. The simplest way is to go online to KBB.com (that’s Kelly Blue Book). This site will open and 2 boxes will be on you screen, one for new cars and one for used cars. Click “go” in the used car box and it will walk you through the process. You’re going to ask for Trade value not for “sell it yourself” or “retail”.
You want to get an idea of what you might expect a dealer to offer you for the vehicle and this will get you reasonably close. If you look up “sell it yourself” or “retail” the difference between the results you get and what a dealer tells you will send you through the roof. Now, whatever the trade-value shows on KBB.com, subtract about $1000 from that amount. This should get you reasonably close to what a dealer will offer you. Why the discrepancy? Here’s why:
“Trade-in Value is what consumers can expect to receive from a dealer for a trade-in vehicle assuming an accurate appraisal of condition. This value will likely be less than the Private Party Value because the reselling dealer incurs the cost of safety inspections, reconditioning and other costs of doing business.”
That’s right off the KBB.com website. Look at the bold phrase. That’s why you will be offered less than what the KBB amount shows. I can’t think of anyone who has ever had their vehicle inspected and reconditioned prior to taking it to a dealer for trade-in. It’s things like 4 matching tires each with a minimum of 40% of their tread or 50% of brake pad remaining. That’s just for starters.
Yes, if the dealership keeps your trade and re-sells it at retail, they will be marking it up several thousand dollars. They may have to spend $1000 or so for it to be ready for retail. But that’s how dealerships make money.
Plus, the dealership has to pay for its facility, advertising, etc. This is part of being realistic about the value of your trade. If the number you come up with is unsatisfactory to you, be prepared to sell your vehicle on your own—and you can put however much or little money into reconditioning and merchandising it as you want. But if you do that, be patient and it’ll be up to you whether you want to wait to buy your new car until after you’ve sold your “trade” or not.
So, if you’re going to proceed with trying to trade your vehicle, have these 2 key pieces of information (pay-off and estimated value) with you. Hold these 2 cards close to your vest because they’ll come in handy later in the process.
We’ll jump ahead just a bit in the process here. Let’s assume that you’ve selected a vehicle to buy and that now you’re going to go inside the dealership with the sales person. You’ve established that you’re interested in trading.
Let me put it slightly differently. In sales training, I would suggest to sales staff that they introduce the “trade” with this “wordtrack”: “Sir/ma’am were you going to continue to drive your current vehicle or were you thinking of selling it to us?” Think about those words. When you’re trading a vehicle you ARE SELLING it to the dealer. They’re not “trading” with you; they’re buying it from you.
One of the things I have trained sales staff to do is to do a silent walkaround of your trade-in, with you present. It’s a technique to “de-value” your vehicle and to get you more realistic about its value. If you’ve done your homework (pay-off and estimated value) you’ll already be realistic. At that point they will need to see your vehicle registration which is also a good time for you to provide your insurance slip as well.
Step 3—Expect disclosure. Once you’re inside with the sales person, at some point he or she will take a bunch of papers to “the desk” or to the manager. Ideally the manager will get up and go outside and “put his hands on” the car, even drive it. Then he will come back in to do some “mumbo jumbo” which will yield a “trade value” or “allowance”. The “mumbo jumbo” involves going to KBB.com or another source to “book” the vehicle. Sometimes if you’re trading another manufacturer’s car it will involve a phone call to a used vehicle manager at a dealership that sells that make to get a value.
Then the manager will come up with a “book” value from which he/she will subtract reconditioning and other costs which should then yield what is known as ACV or “actual cash value”. Quite frankly, this is the true trade value of your vehicle. A scrupulous dealer will show you how they arrived at that figure.
What the dealer of course wants to do is to provide you with one figure (usually a monthly payment amount) for a proposal to buy the car. Often they will also include the “trade allowance”. If that isn’t provided, send the sales person back to the “desk” to get it. If it’s at great variance with what you came up with, ask for the “form” or documentation on HOW they arrived at that figure. You can also request an MMR or Manheim Market Report.
This is a document available to subscribing dealers which shows how much automobile wholesalers have recently actually paid for vehicles similar to yours in your market area. It is arguably the most accurate source for the value of a trade in vehicle because it shows the “real” money that wholesale buyers have paid for vehicles that they intend to recondition and retail.
Quite frankly, if a dealership is unwilling to share with you HOW they arrived at the ACV/trade valuation or to provide an MMR what you might wish to do is leave. There are hundreds of dealerships out there with thousands of vehicles for you to buy. Expect and require disclosure. And, odds are that the dealership will disclose the information once you are insistent that the whole “deal” depends on it.
This doesn’t happen very often anymore, but when the trade appraisal is provided to you, make sure that your keys are returned. Yeah, some dealers still play the game of “hi-jacking” your keys so just make sure that you get them back now. This will also send the message that you are still not committed to “buying and driving today” which is fine. If that question comes up, your answer is simple: “If I buy this car and trade you mine, you’ll get the keys. But let’s concentrate on this other stuff first.” And then just leave your keys sitting conspicuously on the table or desk top.
You want to be satisfied with your trade value, and you also want to be satisfied that if you owe more than what it’s worth that the difference will be accommodated in whatever final deal is negotiated. We’ll talk about that in a future post.
And lastly for today, a little information can be a dangerous thing. It’s as counterproductive for you to take this information to a dealership and act like a know-it-all butthead as it is for dealership personnel to act the part of fast talking, bs’ing, conniving jerks. However, one of my consistent messages to dealer sales personnel has always been that their success depends on the “Golden Rule”: “Them with the gold, make the rules.” The customer has the gold and dealership staff are trying to earn the privilege of getting you—the customer—to part with some of it.
In car sales, over 80% of transactions involve a trade. Chances are that you’re already driving a car when you want to buy a different one and you’re thinking of “trading it in”.
As a profitability and sales training consultant in the auto industry I have encountered various ways this is handled at hundreds of dealerships. And, in a lot of them it’s not handled very well. The vast majority of customers don’t know how to handle it either.
Rule Number 3: Be realistic about your trade
A few simple steps will help you as you’re getting ready to buy a new vehicle and trade your old vehicle.
Step 1— know the pay-off amount if you still owe a loan balance on your trade-in. This is easy to do either online or by phone. Most loans now have a website where you can access the pay-off amount. You can usually find it by looking at your loan documents. And most lenders have a phone number where you can find out the pay-off. It’s usually automated and all you typically need is either your loan number or your social security number or both.
Know the pay-off amount! It will be critical in finding out whether or not you owe more than the vehicle is worth. And the pay-off is NOT the same as the sum of the remaining payments.
Step 2—get an idea of how much your trade is worth. This is easy enough to do as well and you need to go back to Rule #3—be realistic about your trade. The simplest way is to go online to KBB.com (that’s Kelly Blue Book). This site will open and 2 boxes will be on you screen, one for new cars and one for used cars. Click “go” in the used car box and it will walk you through the process. You’re going to ask for Trade value not for “sell it yourself” or “retail”.
You want to get an idea of what you might expect a dealer to offer you for the vehicle and this will get you reasonably close. If you look up “sell it yourself” or “retail” the difference between the results you get and what a dealer tells you will send you through the roof. Now, whatever the trade-value shows on KBB.com, subtract about $1000 from that amount. This should get you reasonably close to what a dealer will offer you. Why the discrepancy? Here’s why:
“Trade-in Value is what consumers can expect to receive from a dealer for a trade-in vehicle assuming an accurate appraisal of condition. This value will likely be less than the Private Party Value because the reselling dealer incurs the cost of safety inspections, reconditioning and other costs of doing business.”
That’s right off the KBB.com website. Look at the bold phrase. That’s why you will be offered less than what the KBB amount shows. I can’t think of anyone who has ever had their vehicle inspected and reconditioned prior to taking it to a dealer for trade-in. It’s things like 4 matching tires each with a minimum of 40% of their tread or 50% of brake pad remaining. That’s just for starters.
Yes, if the dealership keeps your trade and re-sells it at retail, they will be marking it up several thousand dollars. They may have to spend $1000 or so for it to be ready for retail. But that’s how dealerships make money.
Plus, the dealership has to pay for its facility, advertising, etc. This is part of being realistic about the value of your trade. If the number you come up with is unsatisfactory to you, be prepared to sell your vehicle on your own—and you can put however much or little money into reconditioning and merchandising it as you want. But if you do that, be patient and it’ll be up to you whether you want to wait to buy your new car until after you’ve sold your “trade” or not.
So, if you’re going to proceed with trying to trade your vehicle, have these 2 key pieces of information (pay-off and estimated value) with you. Hold these 2 cards close to your vest because they’ll come in handy later in the process.
We’ll jump ahead just a bit in the process here. Let’s assume that you’ve selected a vehicle to buy and that now you’re going to go inside the dealership with the sales person. You’ve established that you’re interested in trading.
Let me put it slightly differently. In sales training, I would suggest to sales staff that they introduce the “trade” with this “wordtrack”: “Sir/ma’am were you going to continue to drive your current vehicle or were you thinking of selling it to us?” Think about those words. When you’re trading a vehicle you ARE SELLING it to the dealer. They’re not “trading” with you; they’re buying it from you.
One of the things I have trained sales staff to do is to do a silent walkaround of your trade-in, with you present. It’s a technique to “de-value” your vehicle and to get you more realistic about its value. If you’ve done your homework (pay-off and estimated value) you’ll already be realistic. At that point they will need to see your vehicle registration which is also a good time for you to provide your insurance slip as well.
Step 3—Expect disclosure. Once you’re inside with the sales person, at some point he or she will take a bunch of papers to “the desk” or to the manager. Ideally the manager will get up and go outside and “put his hands on” the car, even drive it. Then he will come back in to do some “mumbo jumbo” which will yield a “trade value” or “allowance”. The “mumbo jumbo” involves going to KBB.com or another source to “book” the vehicle. Sometimes if you’re trading another manufacturer’s car it will involve a phone call to a used vehicle manager at a dealership that sells that make to get a value.
Then the manager will come up with a “book” value from which he/she will subtract reconditioning and other costs which should then yield what is known as ACV or “actual cash value”. Quite frankly, this is the true trade value of your vehicle. A scrupulous dealer will show you how they arrived at that figure.
What the dealer of course wants to do is to provide you with one figure (usually a monthly payment amount) for a proposal to buy the car. Often they will also include the “trade allowance”. If that isn’t provided, send the sales person back to the “desk” to get it. If it’s at great variance with what you came up with, ask for the “form” or documentation on HOW they arrived at that figure. You can also request an MMR or Manheim Market Report.
This is a document available to subscribing dealers which shows how much automobile wholesalers have recently actually paid for vehicles similar to yours in your market area. It is arguably the most accurate source for the value of a trade in vehicle because it shows the “real” money that wholesale buyers have paid for vehicles that they intend to recondition and retail.
Quite frankly, if a dealership is unwilling to share with you HOW they arrived at the ACV/trade valuation or to provide an MMR what you might wish to do is leave. There are hundreds of dealerships out there with thousands of vehicles for you to buy. Expect and require disclosure. And, odds are that the dealership will disclose the information once you are insistent that the whole “deal” depends on it.
This doesn’t happen very often anymore, but when the trade appraisal is provided to you, make sure that your keys are returned. Yeah, some dealers still play the game of “hi-jacking” your keys so just make sure that you get them back now. This will also send the message that you are still not committed to “buying and driving today” which is fine. If that question comes up, your answer is simple: “If I buy this car and trade you mine, you’ll get the keys. But let’s concentrate on this other stuff first.” And then just leave your keys sitting conspicuously on the table or desk top.
You want to be satisfied with your trade value, and you also want to be satisfied that if you owe more than what it’s worth that the difference will be accommodated in whatever final deal is negotiated. We’ll talk about that in a future post.
And lastly for today, a little information can be a dangerous thing. It’s as counterproductive for you to take this information to a dealership and act like a know-it-all butthead as it is for dealership personnel to act the part of fast talking, bs’ing, conniving jerks. However, one of my consistent messages to dealer sales personnel has always been that their success depends on the “Golden Rule”: “Them with the gold, make the rules.” The customer has the gold and dealership staff are trying to earn the privilege of getting you—the customer—to part with some of it.
Tuesday, May 26, 2009
Excerpts from Cali Prop 8 Court Ruling (Strauss v Horton)
It’s interesting that there is so much flying around the media, online and in blogs about the just issued ruling on California Proposition 8 Case. The decision in Strauss v. Horton (the Prop 8 Case) was 136 pages long with 40 pages of concurring opinions and 1 dissenting opinion.
So what exactly did California’s Supreme Court say? As is so often the case, the actual opinion isn’t as horrific as those on either side of the issue might suspect. The Court was pretty narrow in its opinion.
According to the Court:
“the principal issue before us concerns the scope of the right of the people, under the provisions of the California Constitution, to change or alter the state Constitution itself through the initiative process so as to incorporate such a limitation as an explicit section of the state Constitution.”
The argument which was presented to the California Supreme Court was whether the issue in Proposition 8 (that a marriage as defined in California is between a man and a woman) was an amendment to the Constitution or a revision of the Constitution.
It was a narrow case as such cases by their nature tend to be. It was the best chance that the appellants believed they had to challenge the restrictions of the successful Prop. 8 election.
According to the Court’s decision:
“At the same time, as numerous decisions of this court have explained, although the initiative process may be used to propose and adopt amendments to the California Constitution, under its governing provisions that process may not be used to revise the state Constitution”
“Petitioners’ principal argument rests on the claim that Proposition 8 should be viewed as a constitutional revision rather than as a constitutional amendment, and that this change in the state Constitution therefore could not lawfully be adopted through the initiative process.”
“…in resolving the amendment/revision question, a court carefully must assess (1) the meaning and scope of the constitutional change at issue, and (2) the effect — both quantitative and qualitative — that the constitutional change will have on the basic governmental plan or framework embodied in the preexisting provisions of the California Constitution.”
“Proposition 8 does not entirely repeal or abrogate the aspect of a same-sex couple’s state constitutional right of privacy and due process that was analyzed in the majority opinion in the Marriage Cases — that is, the constitutional right of same-sex couples to “choose one’s life partner and enter with that person into a committed, officially recognized, and protected family relationship that enjoys all of the constitutionally based incidents of marriage”
“Nor does Proposition 8 fundamentally alter the meaning and substance of state constitutional equal protection principles as articulated in that opinion. Instead, the measure carves out a narrow and limited exception to these state constitutional rights, reserving the official designation of the term “marriage” for the union of opposite-sex couples as a matter of state constitutional law, but leaving undisturbed all of the other extremely significant substantive aspects of a same-sex couple’s state constitutional right to establish an officially recognized and protected family relationship and the guarantee of equal protection of the laws.”
Ultimately the Court has concluded the following:
“… we conclude Proposition 8 constitutes a constitutional amendment rather than a constitutional revision. As a quantitative matter, petitioners concede that Proposition 8 — which adds but a single, simple section to the Constitution — does not constitute a revision. As a qualitative matter, the act of limiting access to the designation of marriage to opposite-sex couples does not have a substantial or, indeed, even a minimal effect on the governmental plan or framework of California that existed prior to the amendment. Contrary to petitioners’ claim in this regard…”
“We agree with petitioners that the state constitutional right to equal protection of the laws unquestionably represents a long-standing and fundamental constitutional principle (a constitutional principle that, as we already have explained, has not generally been repealed or eliminated by Proposition 8)”.
OK, so now we have the benefit of the Court’s rationale on this issue. By ruling that Prop 8 was an amendment rather than a revision, there is almost no way the Court could have agreed with the appellant because that was the crux of the argument made against Prop 8 in the Court filing.
However, the rationale that the strictures of Prop 8 does not entirely repeal or abrogate a same-sex couple’s state constitutional right of privacy and due process strikes me as a stretch and potentially grounds for future appeal. In my limited knowledge, this strikes me as somewhat akin to “separate but equal” which Brown v Board of Education long ago found to be anything but equal.
For now, I would think that, based upon the wording of this ruling, advocates for benefits for same-sex couples can and should use it to make sure that all of the rights held by “married” couples are assured and guaranteed to same-sex couples. That seems to me to be a clearly worded element of this decision.
I haven't spent much time actually analyzing this ruling or doing a cross reference back to what the Court called the "Marriage Cases". It's also too bad that the media hasn't yet gone through the decision and reported on what indeed the Court said rather than just to say that Prop 8 was upheld. Maybe the media actually wanted all hell to break loose because it makes for better cable news and front page fodder than does a careful reporting of the actual decision.
Hopefully, we can use these actual words of California’s Supreme Court for more informed discussion and debate upon this important ruling and issue.
So what exactly did California’s Supreme Court say? As is so often the case, the actual opinion isn’t as horrific as those on either side of the issue might suspect. The Court was pretty narrow in its opinion.
According to the Court:
“the principal issue before us concerns the scope of the right of the people, under the provisions of the California Constitution, to change or alter the state Constitution itself through the initiative process so as to incorporate such a limitation as an explicit section of the state Constitution.”
The argument which was presented to the California Supreme Court was whether the issue in Proposition 8 (that a marriage as defined in California is between a man and a woman) was an amendment to the Constitution or a revision of the Constitution.
It was a narrow case as such cases by their nature tend to be. It was the best chance that the appellants believed they had to challenge the restrictions of the successful Prop. 8 election.
According to the Court’s decision:
“At the same time, as numerous decisions of this court have explained, although the initiative process may be used to propose and adopt amendments to the California Constitution, under its governing provisions that process may not be used to revise the state Constitution”
“Petitioners’ principal argument rests on the claim that Proposition 8 should be viewed as a constitutional revision rather than as a constitutional amendment, and that this change in the state Constitution therefore could not lawfully be adopted through the initiative process.”
“…in resolving the amendment/revision question, a court carefully must assess (1) the meaning and scope of the constitutional change at issue, and (2) the effect — both quantitative and qualitative — that the constitutional change will have on the basic governmental plan or framework embodied in the preexisting provisions of the California Constitution.”
“Proposition 8 does not entirely repeal or abrogate the aspect of a same-sex couple’s state constitutional right of privacy and due process that was analyzed in the majority opinion in the Marriage Cases — that is, the constitutional right of same-sex couples to “choose one’s life partner and enter with that person into a committed, officially recognized, and protected family relationship that enjoys all of the constitutionally based incidents of marriage”
“Nor does Proposition 8 fundamentally alter the meaning and substance of state constitutional equal protection principles as articulated in that opinion. Instead, the measure carves out a narrow and limited exception to these state constitutional rights, reserving the official designation of the term “marriage” for the union of opposite-sex couples as a matter of state constitutional law, but leaving undisturbed all of the other extremely significant substantive aspects of a same-sex couple’s state constitutional right to establish an officially recognized and protected family relationship and the guarantee of equal protection of the laws.”
Ultimately the Court has concluded the following:
“… we conclude Proposition 8 constitutes a constitutional amendment rather than a constitutional revision. As a quantitative matter, petitioners concede that Proposition 8 — which adds but a single, simple section to the Constitution — does not constitute a revision. As a qualitative matter, the act of limiting access to the designation of marriage to opposite-sex couples does not have a substantial or, indeed, even a minimal effect on the governmental plan or framework of California that existed prior to the amendment. Contrary to petitioners’ claim in this regard…”
“We agree with petitioners that the state constitutional right to equal protection of the laws unquestionably represents a long-standing and fundamental constitutional principle (a constitutional principle that, as we already have explained, has not generally been repealed or eliminated by Proposition 8)”.
OK, so now we have the benefit of the Court’s rationale on this issue. By ruling that Prop 8 was an amendment rather than a revision, there is almost no way the Court could have agreed with the appellant because that was the crux of the argument made against Prop 8 in the Court filing.
However, the rationale that the strictures of Prop 8 does not entirely repeal or abrogate a same-sex couple’s state constitutional right of privacy and due process strikes me as a stretch and potentially grounds for future appeal. In my limited knowledge, this strikes me as somewhat akin to “separate but equal” which Brown v Board of Education long ago found to be anything but equal.
For now, I would think that, based upon the wording of this ruling, advocates for benefits for same-sex couples can and should use it to make sure that all of the rights held by “married” couples are assured and guaranteed to same-sex couples. That seems to me to be a clearly worded element of this decision.
I haven't spent much time actually analyzing this ruling or doing a cross reference back to what the Court called the "Marriage Cases". It's also too bad that the media hasn't yet gone through the decision and reported on what indeed the Court said rather than just to say that Prop 8 was upheld. Maybe the media actually wanted all hell to break loose because it makes for better cable news and front page fodder than does a careful reporting of the actual decision.
Hopefully, we can use these actual words of California’s Supreme Court for more informed discussion and debate upon this important ruling and issue.
Saturday, May 23, 2009
Memorial Day Meanderings
It’s the Saturday before Memorial Day and I’m kicking back, reading Jeff Shaara’s “Steel Wave”, his new novel about the Normandy Invasion and I’m also watching “Band of Brothers” on the History Channel (about the 4th or 5th time). And it gets me to thinking about Memorial Day.
My father spent 31 years in the military, first as a draftee in WWII--where he served on the ground in Europe from D-Day until after V-E Day—then, after a year or so hiatus back on the family farm, in the Air Force finally retiring as an E-8. After that he worked for the state of Florida until he passed away. He never spent a day fully “retired”.
He always described his military career as “being in the service”. That’s what he would tell people he would meet and how he would describe himself even at home. I’m sure that he would have described his 20 years as a food products inspector for the Florida Dept. of Agriculture as being in the service too.
Dad described himself as “poor white-trash from the hills of Kentucky”. He was a man who eventually earned a GED and, like so many of his generation, was articulate, knowledgeable and self-educated. This man with a GED trained people with MAs in science in how to do their jobs. Not bad for “poor white trash”. Except he overcame all that; worked hard and raised a family and ended up with a pretty good life.
When we take our 3 day weekend for Memorial Day we’re supposed to remember those who have served. Most of us don’t. We’re too busy grilling and sipping beer and watching sports on the tube. Relaxing with our paid days off.
And there’s that word again. Service. That always seemed to be important. To be OF service as well as IN the service. Not enough of us do that. And not enough of us appreciate it. And Dad did it back when the pay was far less compared to other occupations than what it is today (in other words when it really was a sacrifice to be a public servant).
Appreciate those who serve, no matter in what capacity. If you’re young and just starting out in your career, give serious consideration to being of service by engaging in an occupation where you actively serve others, the community and the nation. It’s one of the most noble callings on earth.
My father spent 31 years in the military, first as a draftee in WWII--where he served on the ground in Europe from D-Day until after V-E Day—then, after a year or so hiatus back on the family farm, in the Air Force finally retiring as an E-8. After that he worked for the state of Florida until he passed away. He never spent a day fully “retired”.
He always described his military career as “being in the service”. That’s what he would tell people he would meet and how he would describe himself even at home. I’m sure that he would have described his 20 years as a food products inspector for the Florida Dept. of Agriculture as being in the service too.
Dad described himself as “poor white-trash from the hills of Kentucky”. He was a man who eventually earned a GED and, like so many of his generation, was articulate, knowledgeable and self-educated. This man with a GED trained people with MAs in science in how to do their jobs. Not bad for “poor white trash”. Except he overcame all that; worked hard and raised a family and ended up with a pretty good life.
When we take our 3 day weekend for Memorial Day we’re supposed to remember those who have served. Most of us don’t. We’re too busy grilling and sipping beer and watching sports on the tube. Relaxing with our paid days off.
And there’s that word again. Service. That always seemed to be important. To be OF service as well as IN the service. Not enough of us do that. And not enough of us appreciate it. And Dad did it back when the pay was far less compared to other occupations than what it is today (in other words when it really was a sacrifice to be a public servant).
Appreciate those who serve, no matter in what capacity. If you’re young and just starting out in your career, give serious consideration to being of service by engaging in an occupation where you actively serve others, the community and the nation. It’s one of the most noble callings on earth.
Friday, May 22, 2009
Obama vs Cheney--Back to Basics
Bear with me just a bit while I mentally journey all the way back to the mid-70s. Forget the wide bell-bottom jeans and fitted polyester double-knit shirts and harness boots.
I’m trying to recall lessons learned from lectures and readings—as well as all the introspection over the intervening years. But it starts here with Dr. Poochigian’s classes on political thought. With his emphasis on “linguistic analysis”. Yep, my Master’s degree is in Political Science emphasizing political philosophy and constitutional law. And, as I’ve maintained ever since, my MA in political philosophy and $2.50 will buy me a cup of coffee at any Denny’s. I used to be able to do that for half a buck but that’s the wages of inflation for you.
So, if you’re still reading, what I’m trying to do is to make some sense of the Cheney/Obama “debate” that is see-sawing back and forth in the media concerning Guantanamo Bay and “detainees”. The way I have typically done this in my life is to try to break things down to the most basic concept that I can.
Cheney has always bothered me and scared me. Because of that I have tried not to think too much about him. However, he seems to want to be the face and voice of conservatism within the Republican party during the Obama administration when Republicans are regathering themselves. Unfortunately, back in my own Republican days there seemed to be a strong “moderate branch” with which I identified which all but disappeared starting with the Gingrich years in the 90’s—which is when I abandoned the Republicans for good.
Cheney takes the classic approach that the ultimate aim of government is order—that everything flows from there. No rights can be assured; no benefits can accrue to the public until and unless order is assured. Rights are articulated and then whittled away all in the quest for maintaining order. This is the more cynical view of people as purely self-interested and ready and willing to resort to anarchy at any time.
Obama on the other hand believes in the aim of government as one which assumes the basic goodness and worthiness of people. This is the more optimistic view which passionately protects and expands upon the rights of individuals and works to assure the common good. More importantly, government protects the weakest of its citizens in order to assure protection for all of its citizens.
The Cheney view is one which could come up with a hollow rationale which claimed that because detainees were in Guantanamo Bay that they were outside the U.S. and consequently not subject to the protections of the Constitution. This was one of the flimsiest fabrications I’ve ever encountered. Everyone else at that installation is subject to the Constitution. The Cheney view justified torture of “detainees” because they weren’t really POWs, merely “enemy combatants”.
The Obama view is that the “Gitmo” environment, torture, etc. are just not right. If someone is in our custody, that person is the beneficiary of at least minimum assurances to treatment and due process. Now this sounds simplistic and it is. It’s either fundamentally right or it’s fundamentally wrong. Make that determination and go from there.
This is all such a hydra-headed monster that efforts to reduce it to what in elementary school arithmetic is known as the “least common denominator” is an essential exercise. It is this exercise that allows for issues to be exposed on a bare-bones level. It seeks the foundation of who we are and what we are.
Quite frankly the Cheney view is little different from a fascist view. It is a view that has justified totalitarianism in its various forms over the centuries. Obama’s view can be seen in a more egalitarian fashion—perhaps somewhat naïve. But give me naiveté anytime over the cynicism which led us through the debacle of the first 8 years of the 21st century and which Mr. Cheney would like to perpetuate.
I’m trying to recall lessons learned from lectures and readings—as well as all the introspection over the intervening years. But it starts here with Dr. Poochigian’s classes on political thought. With his emphasis on “linguistic analysis”. Yep, my Master’s degree is in Political Science emphasizing political philosophy and constitutional law. And, as I’ve maintained ever since, my MA in political philosophy and $2.50 will buy me a cup of coffee at any Denny’s. I used to be able to do that for half a buck but that’s the wages of inflation for you.
So, if you’re still reading, what I’m trying to do is to make some sense of the Cheney/Obama “debate” that is see-sawing back and forth in the media concerning Guantanamo Bay and “detainees”. The way I have typically done this in my life is to try to break things down to the most basic concept that I can.
Cheney has always bothered me and scared me. Because of that I have tried not to think too much about him. However, he seems to want to be the face and voice of conservatism within the Republican party during the Obama administration when Republicans are regathering themselves. Unfortunately, back in my own Republican days there seemed to be a strong “moderate branch” with which I identified which all but disappeared starting with the Gingrich years in the 90’s—which is when I abandoned the Republicans for good.
Cheney takes the classic approach that the ultimate aim of government is order—that everything flows from there. No rights can be assured; no benefits can accrue to the public until and unless order is assured. Rights are articulated and then whittled away all in the quest for maintaining order. This is the more cynical view of people as purely self-interested and ready and willing to resort to anarchy at any time.
Obama on the other hand believes in the aim of government as one which assumes the basic goodness and worthiness of people. This is the more optimistic view which passionately protects and expands upon the rights of individuals and works to assure the common good. More importantly, government protects the weakest of its citizens in order to assure protection for all of its citizens.
The Cheney view is one which could come up with a hollow rationale which claimed that because detainees were in Guantanamo Bay that they were outside the U.S. and consequently not subject to the protections of the Constitution. This was one of the flimsiest fabrications I’ve ever encountered. Everyone else at that installation is subject to the Constitution. The Cheney view justified torture of “detainees” because they weren’t really POWs, merely “enemy combatants”.
The Obama view is that the “Gitmo” environment, torture, etc. are just not right. If someone is in our custody, that person is the beneficiary of at least minimum assurances to treatment and due process. Now this sounds simplistic and it is. It’s either fundamentally right or it’s fundamentally wrong. Make that determination and go from there.
This is all such a hydra-headed monster that efforts to reduce it to what in elementary school arithmetic is known as the “least common denominator” is an essential exercise. It is this exercise that allows for issues to be exposed on a bare-bones level. It seeks the foundation of who we are and what we are.
Quite frankly the Cheney view is little different from a fascist view. It is a view that has justified totalitarianism in its various forms over the centuries. Obama’s view can be seen in a more egalitarian fashion—perhaps somewhat naïve. But give me naiveté anytime over the cynicism which led us through the debacle of the first 8 years of the 21st century and which Mr. Cheney would like to perpetuate.
Thursday, May 21, 2009
Food for Thought -- The GFW Equation
In the early 80’s, I had a friend named Lew Giesking who was the City Engineer in the small city in northern Iowa where I was the Chamber of Commerce Executive. Lew and I worked closely on a number of projects in the community, from planning a new swimming pool to the extension of infrastructure to a new Industrial Park that the Economic Development Corporation I also headed had purchased on the edge of town.
Our oldest sons were the same age and played on the same Parks and Recreation Baseball team. Occasionally, we’d schedule a meeting and would get together at the baseball field where our boys were playing. We’d have plans and documents spread on the hood of one of our vehicles and would be discussing the project at the same time that we were hollering out encouragement to our kids.
One particular day, as we were talking, I asked him a question. “Lew, I notice that your van has GFW Construction painted on the side of it. Now your name is Giesking, so that’s the ‘G’, but what does the F and W mean? Are those your partners?”
“No,” he responded with a smile, “They’re not. What GFW stands for is my priorities in life, God, Family and Work, in that order.”
Over the years, I’ve remembered that short conversation many times. What a wonderful way to try to live your life. As I think about it, at the time we were engaged in the “FW” part of it. We’d slipped away from our respective offices and ventured into the hot, muggy Iowa summer sun to share something with someone in our family while at the same time get a little work done.
But more importantly, we all sometimes tend to get our priorities a little bit lopsided. Today’s world tries to put an inordinate demand on us for work. We forget about why we work and all too often let what we do become who we are.
We can’t all paint “GFW” on the side of our vehicles. Maybe we need to make up a bunch of those bracelets that were popular a while back that said “WWJD” or “LiveStrong” but this time in big letters have them say “GFW” as a constant reminder of what our true priorities ought to be.
Because, maybe—just maybe--if we honored God and Family more by remembering what our priorities should be, then the Work part would go a lot better too.
Our oldest sons were the same age and played on the same Parks and Recreation Baseball team. Occasionally, we’d schedule a meeting and would get together at the baseball field where our boys were playing. We’d have plans and documents spread on the hood of one of our vehicles and would be discussing the project at the same time that we were hollering out encouragement to our kids.
One particular day, as we were talking, I asked him a question. “Lew, I notice that your van has GFW Construction painted on the side of it. Now your name is Giesking, so that’s the ‘G’, but what does the F and W mean? Are those your partners?”
“No,” he responded with a smile, “They’re not. What GFW stands for is my priorities in life, God, Family and Work, in that order.”
Over the years, I’ve remembered that short conversation many times. What a wonderful way to try to live your life. As I think about it, at the time we were engaged in the “FW” part of it. We’d slipped away from our respective offices and ventured into the hot, muggy Iowa summer sun to share something with someone in our family while at the same time get a little work done.
But more importantly, we all sometimes tend to get our priorities a little bit lopsided. Today’s world tries to put an inordinate demand on us for work. We forget about why we work and all too often let what we do become who we are.
We can’t all paint “GFW” on the side of our vehicles. Maybe we need to make up a bunch of those bracelets that were popular a while back that said “WWJD” or “LiveStrong” but this time in big letters have them say “GFW” as a constant reminder of what our true priorities ought to be.
Because, maybe—just maybe--if we honored God and Family more by remembering what our priorities should be, then the Work part would go a lot better too.
Subscribe to:
Posts (Atom)