Big Town, Small Town
I like small towns. For one thing, business people have to maintain a reputation for honesty in small communities, or they’re soon out of business. This is not nearly as true in bigger cities. There, service people, customers, and the businesses themselves all can be transients who never really get to know each other.
When we moved to Michigan, our Pontiac’s mileage indicated the need for a transaxle fluid change. One day, we stopped at an auto service chain place in Kalamazoo, the biggest city near our home, to deliver our son who was picking up his truck. While waiting in the office, I asked the bright young man whose nametag said “Manager” about fluid changes. He said they did transaxle fluid changes, filter changes, and flushes on three levels, ranging from about $100 to nearly $200. He strongly recommended the upper level.
A little later I took the Pontiac in for an oil change to Jim Koestner, Inc., the GM dealer in Plainwell (population about 4,000). I asked the bright older man whose family owns the place when I could get an appointment for the best transaxle fluid service they offered.
“You don’t need all that,” Mr. Koestner said, after checking the data for our car. He took me to the service manager to confirm his opinion. He called a mechanic out of the shop and put the question of what was needed to him. Same answer. They did the necessary service for just under $100.
A few months later, General Motors sent Koestner a letter canceling their dealership contract. The Plainwell dealership was among hundreds that got termination notices as part of GM’s bankruptcy settlement.
Over the years we’ve owned a German car, a Japanese car, and American cars built by Ford, GM, Chrysler, and American Motors. Our current Pontiac is far and away the highest-quality vehicle of the bunch, except perhaps for the 1929 Model A Ford that was running well at age 20 when I bought it.
We intend to drive our Pontiac until the wheels fall off, and that may be quite a while. Unfortunately, we won't be able to buy another. Shortly before it terminated Koestner’s dealership agreement, GM announced it would stop producing Pontiacs.
No doubt many factors entered into the GM decisions. Honesty is a big factor for me in any decision. I’ll keep buying whatever services Koestner continues to offer.
Showing posts with label Chrysler. Show all posts
Showing posts with label Chrysler. Show all posts
Thursday, October 29, 2009
Thursday, June 04, 2009
A Flash of Stupidity
It would be unfair to say that Chrysler management always has been stupid. After all, the founders outperformed many domestic auto competitors to become one of the “Big Three.” And, when things went awry in the 1970s, Lee Iacocca rode in on his white horse to save the day with timely product redesigns, “straight talk” advertising featuring himself, and the ability to persuade federal authorities to guarantee massive loans.
Since then, however, Chrysler leaders have committed more errors than a Little League team in its first practice game. Perhaps the residents of the executive suites were too busy counting their multi-million-dollar compensation packages to make a fumbling attempt at good management.
When I worked at The West Bend Company in 1964 as Sales Promotion Manager for the Direct Sales Division, I was privy to enough details of a Chrysler business decision to be confident that someone in the automaker’s top management had a flash of stupidity similar to some of the recent blunders.
West Bend was prosperous at the time. It was the world’s leading manufacturer of coffee makers, and near the top in various other types of cookware and small kitchen appliances. The company also was among the top five outboard motor manufacturers in the U.S. West Bend outboards were not well known because most were made for Sears and sold under the Sears name. West Bend didn’t emphasize sales under its own brand in the U.S., but sold small outboards successfully in other countries, especially Canada.
Unfortunately for West Bend, Sears’ execs decided the company had to have big outboards. Despite spirited resistance, West Bend was forced to retool its Hartford plant at heavy expense to get 80- and 100-horsepower outboards rolling off the assembly line or lose its largest customer. The deal allowed West Bend to sell the big motors under its own name, but they did not sell well. They did not sell well under the Sears name, either.
West Bend was stuck with an expensive, unprofitable plant. Company leaders started quietly looking around for a buyer for the outboard motor division. Chances of it continuing as a viable business were very low. Potential buyers expressed little interest, until Chrysler suddenly came forward.
As a department head, although mine was a very small department, I sat in on monthly marketing meetings conducted by Vice President Bob Lockman. Lockman was a tyrant when it came to meetings. He started exactly at the scheduled time. He once told a manager to get out and shut the door behind him after the unfortunate fellow arrived at 10:01 for one of the 10 a.m. marketing meetings.
Thus, it was surprising when Lockman was not at the podium at 10 a.m. on a monthly meeting day. We all waited, of course, and the wait extended to about 20 minutes. Then Lockman breezed in smiling broadly between puffs on a giant cigar.
“Guess what guys,” he said. “A Chrysler vice president just phoned and threatened me. He said if we wouldn’t sell them our outboard motor division, they were going to build their own plant and drive us out of the business.”
After a long drag on the cigar, Lockman chuckled. “I told him the offer was highway robbery, but since Chrysler had put our backs to the wall we had no choice but to accept.”
Lockman emerged from another cloud of cigar smoke with a laugh. “That Chrysler exec really was a tough negotiator. He forced us to take about double what our division is worth.”
It would be unfair to say that Chrysler management always has been stupid. After all, the founders outperformed many domestic auto competitors to become one of the “Big Three.” And, when things went awry in the 1970s, Lee Iacocca rode in on his white horse to save the day with timely product redesigns, “straight talk” advertising featuring himself, and the ability to persuade federal authorities to guarantee massive loans.
Since then, however, Chrysler leaders have committed more errors than a Little League team in its first practice game. Perhaps the residents of the executive suites were too busy counting their multi-million-dollar compensation packages to make a fumbling attempt at good management.
When I worked at The West Bend Company in 1964 as Sales Promotion Manager for the Direct Sales Division, I was privy to enough details of a Chrysler business decision to be confident that someone in the automaker’s top management had a flash of stupidity similar to some of the recent blunders.
West Bend was prosperous at the time. It was the world’s leading manufacturer of coffee makers, and near the top in various other types of cookware and small kitchen appliances. The company also was among the top five outboard motor manufacturers in the U.S. West Bend outboards were not well known because most were made for Sears and sold under the Sears name. West Bend didn’t emphasize sales under its own brand in the U.S., but sold small outboards successfully in other countries, especially Canada.
Unfortunately for West Bend, Sears’ execs decided the company had to have big outboards. Despite spirited resistance, West Bend was forced to retool its Hartford plant at heavy expense to get 80- and 100-horsepower outboards rolling off the assembly line or lose its largest customer. The deal allowed West Bend to sell the big motors under its own name, but they did not sell well. They did not sell well under the Sears name, either.
West Bend was stuck with an expensive, unprofitable plant. Company leaders started quietly looking around for a buyer for the outboard motor division. Chances of it continuing as a viable business were very low. Potential buyers expressed little interest, until Chrysler suddenly came forward.
As a department head, although mine was a very small department, I sat in on monthly marketing meetings conducted by Vice President Bob Lockman. Lockman was a tyrant when it came to meetings. He started exactly at the scheduled time. He once told a manager to get out and shut the door behind him after the unfortunate fellow arrived at 10:01 for one of the 10 a.m. marketing meetings.
Thus, it was surprising when Lockman was not at the podium at 10 a.m. on a monthly meeting day. We all waited, of course, and the wait extended to about 20 minutes. Then Lockman breezed in smiling broadly between puffs on a giant cigar.
“Guess what guys,” he said. “A Chrysler vice president just phoned and threatened me. He said if we wouldn’t sell them our outboard motor division, they were going to build their own plant and drive us out of the business.”
After a long drag on the cigar, Lockman chuckled. “I told him the offer was highway robbery, but since Chrysler had put our backs to the wall we had no choice but to accept.”
Lockman emerged from another cloud of cigar smoke with a laugh. “That Chrysler exec really was a tough negotiator. He forced us to take about double what our division is worth.”
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