Central Oregon auto dealers say they are maneuvering through the current economic road blocks with a renewed focus on customer-driven goals.

The industry has been a mainstay of employment in sales, service and spin-off business as well as fostering long-established ties with the community through financial support, charitable donations and sponsorship.

And while there have been significant recent challenges, including the devastating loss of some local GM and Chrysler franchises amid national sales numbers down to levels not seen in over two decades, they remain determined to emerge stronger and track closely with consumer demands.

ROBBERSON FORD CHANGES THE CULTURE
Jeff Robberson, leader of Bend-based Robberson Ford (which also includes the Lincoln, Mercury and Mazda lines) typifies the approach, citing steps taken to ‘right size’ the company to operate efficiently in response to the realities of the marketplace.

Robberson said: “We have had to make some hard decisions, including cost-cutting, inventory adjustment and relatively reducing our workforce, but we feel we have now reached a sales volume that is stabilized, so we can adapt to be viable at that level.

“One of the biggest challenges at Ford has been to change the culture, to show that we are no longer just about big trucks and fast Mustangs – though we still have leadership in best-selling trucks – and to that end the company has accelerated development of new products that customers want and value, including the 2010 Fusion, which is proving a hit in the mid-size market and includes a hybrid version.

“Our sales have grown in seven of the last eight months; we are well into a coordinated plan and believe we are positioned in the right place at the right time in terms of available products, organization and a path to profitable growth.”

Recently, Motor Trend magazine lauded the Fusion as a worthy competitor to the top-selling Toyota Camry and Honda Accord, saying the new hybrid shows Detroit is building the kind of “trendsetting, high-mileage, high-quality cars Capitol Hill claims they can’t build.”

Robberson says Ford is lucky to have had the leadership of CEO Alan Mulally, who took the helm in 2006 and spearheaded restructuring after previously being credited with reviving Boeing’s fortunes.
Mulally engineered financing to provide liquidity for operations and investment which, so far, has seen Ford resist the move to government funding involvement undertaken by the other of the ‘Big Three’ domestic automakers. He also instituted the ‘One Ford’ plan aiming to have all parts of the organization work effectively towards a common goal.

Under Mulally, Ford is reworking some traditional models and adding new ones with an international flair. 

One of his first requests was to challenge Ford designers to revive the mothballed, one-time flagship Taurus model. The result is a 2010 version combining ‘bold American’ and ‘kinetic’ European styling in a well-received, more personal luxury sedan than the workaday four-door it replaced.

Robberson added: “Everyone at Ford has been partners in the turnaround and has been involved in the, sometimes lively, discussion of the best way forward.

“The company has offered full disclosure and realizes the importance of everything from the assembly line pride in quality to the retail dealer network and investing in research and development to keep the juices flowing for innovative new products.”

Robberson joined the family business in 1986 after a successful stint in the trucking industry. He recollects his father Gordon, known as “Gordy,” who founded the company in 1957, telling him that after coming out of another recession he never wanted to solely rely on selling a car to feed his family.

“Right from then we made a conscious effort to also build up the ‘back-end’ of the business, “ said Robberson, “which has included the parts, service and garage elements, incorporating a state-of-the art collision center, and we have strived to earn customers’ loyalty and trust as part of a long-term relationship.”

CARERRA MOTORS STAYS CLOSE
TO THE CUSTOMER
Staying close to the customer is a mantra echoed by Tom Anderson, owner of Porsche Audi VW BMW dealer Carerra Motors.

“We are not watching the news too much,” said Anderson. “We are doing OK and just thankful that we are here doing business to the best of our ability and taking care of our customers.”

Anderson said that from his general and local market perspective there was “good news and bad news”.

“The bad news is that the number of automobiles sold in the last year in the U.S. is less than 1982 and at nine to ten million represents almost half of the volume seen in 2007.

“The good news for us is that our brands are doing relatively better than others from a market share standpoint.

“European models are up from seven to nine per cent share and are forecast to rise to 12 per cent, which represents a larger piece of a shrinking pie.

“The product offered is the priority and our engines are very efficient in terms of safety, performance and fuel consumption.”

Anderson said that the German manufacturers had actually ratcheted up research and development and he was excited at the prospect of more ‘world-class’ offerings coming on line.

“If you aren’t paying attention to product development, the ability to catch up is almost impossible.” He observed. “We have a lot of great products and choice – just in the Audi line we have everything from the A3 to A5, S5, Q5 and Q7 in a variety of colors. We also have some exciting diesel developments, including in the BMW 3-series, with more to come.”

Anderson acknowledged that financing requirements for customers could be more stringent in the current economic climate, but his affiliations had the advantage of strong captive banks and capital and had not contracted to the extent of some domestic auto lenders like GMAC, which had even abandoned leasing as a customer option.

As far as the ousting of some GM and Chrysler franchises, he commented: “We all have a lot of respect for our fellow dealers here and it is disturbing and unfair that an asset can be taken away from you like that. People seem to be losing sight of the fact that the dealer community is not a cost to the auto manufacturers, but a source of all revenue.

“We are all also big contributors to the community, because the community has been good to us.
“I heard that Chrysler is effectively ‘orphaning’ four million customers – who are not necessarily going to buy Chrysler products again.

“But for our immediate future, we are positive. We enjoy our closeness to the customer and community and appreciate the loyalty of our clients, and will continue to do business the best we know how.”

BOB THOMAS BEGINS TO LOOK DIFFEENT
Industry stalwart and pillar of the local community, Bob Thomas says his dealership will “look a little different” after falling victim to GM’s franchise cull, but promised to offer the same “friendly service” for which it is renowned.

GM severed its franchise agreement with Bend-based Bob Thomas Car Co. – which has been a GM dealer since 1918 – as part of the automaker’s Chapter 11 bankruptcy filing which saw 1,300 dealers axed from its 6,000-strong national network.

The decision was upheld despite a direct appeal from Thomas, with a letter of support from Oregon Senator Ron Wyden protesting that the region’s largest metro area would be losing its only GM dealer, leaving Madras as the sole GM location for Central Oregonians.

As part of a ‘wind-down agreement’ Thomas will have up to the end of October 2010 to sell his existing inventory of new GM vehicles. The company will keep operating its Honda dealership and continue to sell used cars and trucks, as well as undertaking service and repair work.

Thomas said: “We have approximately four hundred days to wind down inventory, and will continue GM warranty work through that period, as well as continuing with GM repairs and those for all makes and models .

“We will focus more on Honda regarding new vehicles as a matter of necessity as well as on our used car and garage capability.

“All new car sales have been impacted by the general economy –often any discretionary spending is being deferred and activity is significantly lower across market sectors, not just in automobiles. This is a time for caution and de-leveraging, and to be responsive to the times.”

Thomas was in Washington D.C. last week to speak before a congressional oversight committee that wanted to hear, from representative affected dealers, how the GM situation is being handled.

His company has scaled back from eight-five to around sixty-five employees to meet the adjusted demand of resources, but Thomas did not rule out the possibility of picking up another line/franchise that currently lacks a presence in his market area, adding: “If you have extra capacity it could be an opportunity for someone.”

He reaffirmed: “We are in the auto business in Bend, Oregon; we are glad to be here and appreciate the support of our customers.

“We may look a little different, but are glad to offer the same friendly service.

“We are not the only ones impacted by these challenging times – there are plenty of changes and challenges in store, and we will all learn a lot. But we are in it together and will support each other through it.”

GARY GRUNER ONLY GM DEALERSHIP
Gary Gruner Chevrolet-Buick-Pontiac, in Madras, is set to become the only GM dealership in central Oregon, and Gruner says he has already seen business triple in the last couple of weeks.

“There certainly has been a significant increase in activity,” said Gruner. “We have many viable products, including the hot new Camarro which is gaining attention.

“We are also in the middle of farm and ranch country and traditionally the bulk of our business has been in sales of trucks and SUV’s as functional vehicles.

“We have always received a lot of business from Crook County, which does not have a GM dealer, and off the Warm Springs reservation, but we have consistently sold to people throughout the Central Oregon region.

“Our sales effectiveness is in the top couple of per cent and most of our business is derived by word-of-mouth – we put a lot of money back into the community.”

Regarding the Bend population encountering the prospect of travelling to Madras for new vehicle purchases and warranty work, Gruner added: “People have been going to Bend from Madras and supporting that community forever.

“We may go for opportunities that we don’t have here, like for the home and garden stores, or to visit the movies or have our ‘Costco trip’, but we don’t see it as burdensome.

“With more traffic the other way, it may boost our general economy and maybe people will give us a shot to see what we can offer – the buying and servicing experience is worth it.”

Gruner said in the longer-term, GM can request the dealer have a physical presence in larger or other markets in the territory, which could open up the possibility of a return to Bend down the road.
He said he bought the Madras dealership several years ago after tiring of running large corporate stores – he oversaw eight dealerships in California - and wanted to get back to ‘having a direct relationship with customers’.

He said: “I wanted to return to being a hands-on operator – I don’t even have a general manager or sales manager as I do a lot of that myself – and I really enjoy what I do.

“Locally, the Madras community has been very supportive and loyal, as we have in return, and we appreciate the relationship.”

 
THOMAS SALES & SERVICE LOSES CHRYSLER
Matt Thomas, co-owner of Thomas Sales & Service, which has been in business in Bend since 1937, is particularly aggrieved at the loss of his company’s Chrysler (including the Dodge brand) franchise as a result of the decision to consolidate dealerships as part of government-ordered bankruptcy proceedings prior to the automaker’s takeover by Fiat.

He said: “We had a 72-year old business and the government took it from us for free. We could have sold the franchise for $7 million two years ago.

“They took eight hundred of us out without any explanation or criteria, or the opportunity to address any concerns, and gave us three weeks to get rid of a 10-month supply of cars. This seems like a pretty radical enforced redistribution of wealth.

“T, S & S was also a huge supporter of community events, for example being the largest single dealership to sponsor Dodge rodeos.”

Thomas said his company has had to scale back from a peak of 116 employees in 2006, to a workforce numbering around forty, and would continue selling its line of new Subaru’s, as well as concentrating on late model Dodge and other used cars and trucks.

He said: “We are the oldest Subaru dealer in the state, and now our goal is to be the biggest Subaru dealer in the state.

“We are also going to continue our service work on Dodge/Chrysler vehicles, we have put a tremendous amount of investment into our factory-trained techs and that doesn’t go away.
“We may also try for other franchises that may be a good fit. Obviously, we are going to be a different entity but we will continue towards the future.”

T, S & S’s Dodge and Chrysler franchises are set to be transferred to Jim Smolich Motors nearby on Bend’s Highway 20. Smolich already carries Chrysler group’s Jeep brand as part of its lines.

Another Chrysler franchisee, Dave Hamilton Motors, of Redmond received a double blow with the loss of both its Jeep line and GM/Chevrolet franchise.

Jeff Robberson added: “Regardless of our performance, we take no positives from other dealers losing franchises. There are great quality dealers here and we would rather be battling it out on a level playing field.”