Friday, April 3, 2009
Successful in a Down Economy, One Dealership's Story
South Bay Ford is the #1 Ford Car/Light Truck Dealership in the Nation for Retail Parts and Labor Sales.
South Bay Ford Dealer Principal, Gary Premeaux (Primo) gives the credit to his talented Service and Parts Team. Gary and his team started out over 15 years ago in a small run-down location in Hawthorne California. Now Gary has a state of the art facility that sets the standard for new dealerships.
Let’s talk about the team that Gary Premeaux put together. Gary hired Bob Cawley 12 years ago from an Arizona Ford Dealership. Gary and Bob realized before most that retail was the way of the future. They created the retail standard that Ford Motor Company adopted as a pattern for their dealers.
After spending too much of his time entertaining friends that were waiting 90 minutes to get an oil change, Gary realized that things needed to be done differently. He challenged his service team to create a world-class service department that met customers’ needs. He demanded things like:
1) 30-Minute Oil Change Service Or its Free - The entire process (including Advisor walk-a-round, an oil change and vehicle inspection) was completed in 30 minutes or less. Only a handful was ever given away. The boys in the shop did a great job of getting the cars in and serviced.
All Technicians did oil changes. South Bay Ford was one of the few dealers that encouraged all Technicians to do maintenance. The Technicians learned that they could make money doing services and maintenance. Even the highly skilled “Master Technicians” found that they could sustain a consistent pay check by filling in their day with maintenance work.
Gary did have a standard; maintenance was not a loss leader! We needed to make money doing maintenance. He wanted to retain a minimum of 70% gross for service labor and 30% gross for parts on maintenance business. That percentage was sustained over the past 11 years.
This meant new pay plans for the Technicians. Each Technician had a maintenance pay scale, a repair pay scale and a fleet pay scale. The cost of labor (Technician Rate) was based upon our acceptable sell rate for labor in each category. It was a stable system with guaranteed returns.
2) Saturday Service – The decision was made to open on Saturday and to provide full service six days a week. A creative rotating work schedule was implemented that allowed them to be at full staff every day of the week. All team members were given the opportunity to give their input in the new system. The new work schedule required hiring an entire team, as one team was always off duty. In the Saturday Marketing Plan, they did mailers, voice mail (before it was popular), distributed flyers in parking lots and made a real effort to have a successful launch. The first Saturday went so well that the dealership produced 224 Flat Rate Hours. That was more than any day during the previous week. It was an instant success.
3) Advanced Production Systems - The dealership converted from a conventional dispatch system to a true Advanced Production System. Gary eventually brought in the team from ATcon, now M5, to teach and train the staff. Dave Vaden was the leader of that training. Bob Cawley and Dave Vaden instantly built a relationship. With Dave’s help they were able to improve the Labor Selling Gross to over 50% (Ford Financial Statement), another Premeaux standard.
4) Leadership in Customer Satisfaction - Gary insisted upon a strategy, close supervision to see that the plan was carried out and CSI incentive pay plans to ensure that his customers were treated right. Gary has been leading the Region with the number of customer surveys returned and CSI scores since the inception of South Bay Ford.
And this was just for starters. Premeaux had a clear vision for the future and he set the tone for the Parts and Service Departments. Even back in 1996 Gary was designing the “New South Bay Ford”.
The fun part of this article for me is that Gary and Bob hired this kid named Steve Shaw to be their Service Manager during those early years. It was exciting for a young kid to work with and learn from this talent. I remember those grueling meetings with Gary, he never settled for anything but the best from his managers. Gary also encouraged me to complete my MBA. Gary has a way of getting the best from his managers. Obviously it works! I stayed with Gary for about 3 years before setting out on my own as a consultant. I never worked in the new dealership however I visit whenever I can. Bob Cawley always had time to buy me a burger at Hanks Bistro Cafe, located in their waiting room.
Bob and I developed “PIG Meetings”. “PIG’s” is an acronym for “Process Improvement Groups”. Every Thursday the managers bring up the entire staff, in small groups, and have a free exchange of information concerning everything in the dealership. We were able to change our world because we talked to our staff. We listened to their needs and created an environment of trust and accountability for everyone.
The service department was soon growing beyond belief. The dealership hit its low point in February of 1996 when they flagged just 2,800 hours. Today the dealership produces between 7,500 to 8,000 hours per month at the new freeway location and 2,000 to 2,500 hours at their Fleet Service Center. That is an awesome improvement.
In 2005 Gary built his New South Bay Ford. It now sets the standard for new car dealerships. Building a dealership like this is no small task. Every one must be on board and understanding the clear vision. Bob kept his employees informed with PIG Meetings for years.
Premeaux, who never settles for second best, hired Ron Kiepke to manage his multi-million dollar parts inventory. Gary truly understands what fixed operations will do for a dealership. Recently, Premeaux closed his other location, Ford West, and opened a new Fleet Service Center. This truck center is located in the old building. Big trucks and fleets are essential to any city, especially in Los Angeles. The dealership services most of the LAX Airport support, the local city governments, police and sheriff vehicles, taxi cabs, buses and even limousines make their way to his fleet shop. In total, South Bay Ford has 130 Service Bays, 60 Technicians, 12 Service Advisors and a very competent support staff.
After 12 years as Director of Fixed Operations, Bob Cawley resigned to spend more time with his family in Arizona. After consulting with Bob, Gary promoted Ron Kiepke to Bob’s old position. Paul Gipple was promoted to fill Ron’s old position as Parts Director. With these highly skilled and experienced professionals in place and a tried and tested system to operate, the dealership is poised for the future.
Only the best is in store for the future of this Ford Dealership. Congratulations to Gary Premeaux and his team at South Bay Ford for becoming the #1 dealer in the entire country for retail parts and service sales. GREAT JOB!!
Co-Authored by Steve Shaw and Bob Cawley
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e-mail Steve Shaw
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