Automotive News - May 19, 2008 - (Page 17)

MAY 19, 2008 • 17 Dealers’ approach can lessen pain of staff cuts Jenny King autonews@crain.com When shrinking revenues forced Dan Leahy to cut costs last year at the two Boston area dealerships he manages, he and his staff scrutinized a number of expenses: advertising, utilities, even landscaping services. Then it was time to assess personnel. At the larger store, Boston Volvo Village in Brighton, Mass., Leahy says, “We determined what was best and most productive.” At the other dealership, Charles River Saab in Watertown, Mass., cuts were more painful, he says. Sales had been slipping, yet the dealership had maintained its staff level of five years earlier. After chopping expenses where possible, the dealership managers decided last fall to eliminate the equivalent of four full-time positions. “We had a meeting to explain with reasonable detail what was happening,” Leahy says. Although the most recent data from the National Automobile Dealers Association show that dealership employment remained at about 1.1 million from 2001 through 2006, in today’s shaky economy, more dealers likely will face cutbacks. And while cutting staff is often difficult, there is a right way to go about it, experts say. Evaluate carefully “A dealer has to evaluate his or her expense control measures,” says Joe Lescota, chairman of the automotive marketing department at Northwood University in Midland, Mich. “There are formulas that suggest certain expense levels — it may be 30 percent of gross for dealership employment.” Lescota says dealers also should study trend analyses from the manufacturers and check R.L. Polk & Co. registration reports to see what is selling in their market area. But dealers who must cut back need to be careful, Lescota warns. When dealers cut back in the 1990s, he says, some hurt their operations by trimming so many employees, they weren’t able to serve customers and build the business. “The last thing you want to do is Northwood University’s Lescota: “The last thing you want to do is fire the wrong people.” fire the wrong people,” Lescota says. But if you must reduce personnel, says dealership consultant Dave Anderson, don’t prolong the process; just do it. “If you cut one person this week and two more the next and yet another before month end,” the process turns into a form of water torture “where you prolong the agony and continue to distract your team,” says Anderson, president of LearntoLead.com in Agoura Hills, Calif. He adds that it’s important to communicate, especially once cuts are made: “Bring your staff together and explain how everyone’s job is more secure as a result of the right-sizing.” And, Anderson says, no news is not good news in times like these. “It’s unlikely that jobs will be cut too soon,” he says. “By far, the natural tendency is to wait far too long” to trim staff. Review continually One way dealers can track work functions and how well employees perform them is by creating job descriptions and holding annual performance reviews. Detailed descriptions not only help managers determine how well an employee is performing but also serve as guides if another staff member has to fill in during a period of layoffs. “If your market is either shrinking or growing, you may need to look at job descriptions a couple of times a year,” says Wayne Phillips, a 20 Group team leader with NADA in McLean, Va. “They should be reviewed annually.” “Annual performance reviews are also an opportunity to set goals for the next 12 months,” Phillips adds. LearntoLead’s Anderson says automation and outsourcing also can help during cutbacks. “How you spread out the work depends upon the nature of the job,” he says. “For sales, you may need to rearrange schedules to provide greater coverage for peak times. Managers must have a strategy to offset the potential manpower shortages that employee cutbacks create.” That’s something Leahy was forced to consider when looking at staff cuts at Boston Volvo Village. “We do a big service business here,” he says, “and knew we would be compromising some of the level of service to our customers. Everyone had to take it up a notch. They understood the importance of being engaged in the business every day.” Anderson advises that, as a rule, managers need to be more visible and accessible during tough economic times. He says dealers should keep employees focused on the things they can control, such as attitude, discipline, work ethic and how they spend their time. NADA’s Phillips offers encouragement: “Most dealers are accustomed to selling. You have to sell the dealership to your employees — you have to be a bell-ringer.” c GM plans to distinguish Opel with image makeover Jason Stein and Guido Reinking jstein@craincom.de ZURICH, Switzerland — In an effort to stand out in an increasingly competitive segment, General Motors Europe is repositioning its Opel brand. At the same time, over the next few years Opel aims to boost its market share in Germany to 10 percent or higher with a lift from parent GM’s plan to invest 9 billion euros ($13.9 billion) in the brand. GM Europe President Carl-Peter Forster said GM will try to move its volume division slightly upmarket by emphasizing design and engineering superiority based on traditional German manufacturing attributes. The repositioning will touch all areas of the brand, including marketing, product development and pricing. The shift is being made to set Opel apart from its largest rivals in the volume segment and more acutely differentiate it from Chevrolet, GM’s entry-level brand. “Opel and Chevrolet will be bookends with a clear position for both,” vanced brand. “Part of the Opel image is to democratize technology,” Forster said. In advertising, the “Discover Opel” campaign will continue. But Forster said the company is also looking at an advertising slogan that includes the message “engineered to energize.” Seeking share In addition, says Thomas Owsianski, Opel’s sales and marketing chief, “in three to five years, we want to be well above 10 percent” in German market share and have sales above 400,000. In a market off 9.2 percent, Opel sales in Germany slumped 14.7 percent last year to 285,267 units, according to the KBA, the Federal Motor Transport Office. That yielded a market share of 9.1 percent. With the GM investment, Opel plans to launch 20 new vehicles by 2012, including new editions of the high-volume Astra small car and Meriva small minivan. Opel also plans to spend $772.6 million to develop smaller and more fuel-efficient engines. c Jens Dralle contributed to this report © GM CORP. Opel plans to launch a new edition of the high-volume Astra by 2012. Forster said this month at a company event here. Sales in Europe were down 8.2 percent in the first quarter to 342,991 units, according to JATO Dynamics. Forster’s plan will be executed primarily by Brent Dewar, GM Europe’s new sales and marketing boss. It covers all areas: In product development, Opel will continue to produce vehicles that demonstrate more flexibility in seating possibilities and multiple configurations. In marketing materials, Opel will be positioned as a technically ad- Price increase In the medium term, Forster said, the brand upgrade will mean that Opel cars will cost slightly more. “We are not talking about a premium price for Opel,” Forster said, “but a 1 percent to 3 percent increase is foreseeable. We will look for more revenue per vehicle without being much more expensive.” Opel can use the image boost. Maintain tire pressure. Retain customer loyalty. The UltraFill® 99+ Nitrogen Tire Inflation System offers the highest purity and the ability to service multiple bays in a compact, low-cost unit. We also offer an Automatic Inflation Cart that can fill all four tires to uniform pressure at once while still on a vehicle. © 2008 Air Products and Chemicals, Inc. Offering UltraFill 99+ high-purity nitrogen tire inflation is the best new customer retention tool. 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Table of Contents Feed for the Digital Edition of Automotive News - May 19, 2008

Automotive News - May 19, 2008 Ford eyes smaller F-150 cousin Sonic: Mercedes tries to 'extort' store upgrades Chrysler seeks 25% slash in parts prices Dealership managers pushed Chrysler's latest incentive Crain names 4 new VPs Automotive News staffers win Wheel Awards GM will keep cutting sales to fleets GM studies the future of full-sized trucks American Axle plans to expand in Asia At Lexus, the sales laggards are cars VW positions Tiguan as 'GTI' of small SUVs Tata enters race for 100-mpg car Harley Earl was the daddy of auto design Focus will follow Fiesta as a global vehicle Lexus shows how it sweats details Industry slows tide of state CO2 rules Chevy tweaks Cobalt to add fuel economy Be careful; don't do anything dumb Looking ahead to different industry They thought they knew everything Cerberus doesn't belong in autos Dealers as scapegoats Smart, steady growth works best for suppliers Farley's smart to value Ford's heritage Absurd logic in the U.S., cowardice in Germany BMW, Daimler keep a wary eye on U.S. economy James Franey Dealers' approach can lessen pain of staff cuts GM plans to distinguish Opel with image makeover Make or buy? Software can estimate costs for company Honda, Toyota see robots in their futures Bosch aims to lead in hybrids technology King of hearts Clarke aims to get GM back on track in N.A. Fields navigates Ford through 'white water' LaSorda steers Chrysler's global ventures Toyota's Lentz: A crash course in hard times Truck sales fall 13% in April Modine sells Thermacore unit Alcoa to close Mexico plant Toyoda Gosei expands in Mexico Hayes Lemmerz plans to close Georgia factory Japan's sales slide 2% in 1st quarter; output climbs Dealers Hyundai let U.S. direct Sonata freshening After .com and .edu, is it time for .car? Panoramic sunroof of Lincoln MKS boosts Inalfa sales Chrysler hedged gas price bet Smart phones help dealerships retain customers CAW completes pacts with GM, Chrysler early GM, UAW resolve 2 disputes New media buyer for Chrysler Visteon names Stebbins CEO Convertible registrations drop Ferrari: From denial to debut Buildings Porsches in U.S.? Depends whom you ask Toyota will go slow in Tupelo Ghosn is glum on prices, U.S. sales prospects Pischetsrieder has earned a celebratory cigar NHTSA spins VINs, averts meltdown F_RD GU_S WI_ BUI-_KS 50 PEOPLE FOR 50 YEARS Yutaka Katayama Clarence Talley Jim Morton Pete Brock Marvin Runyon Yoshikazu Hanawa Bill Bruce Shin Maki Jack Collins Mitsuya "Scape" Goto Bob Link Soichi Kawazoe Jerry Hirshberg Takashi Ishihara Roy Rogers John Parker Bob Thomas Teruo Uchino Morrie Sage Bob Thomas Nobe Wakatsuki Earl Hesterberg Carlos Ghosn Lee Clow Jerry Benefield Yutaka Kume Doug Betts Tim McCarthy Jed Connelly Atsushi Nakatsuji Dave Hubbard Joe Opre Patrick Pelata Yoshiyuki Kimura Diane Allen Mad Mike Taylor Chuck King Larry Dominique Mark Igo Mitsuhiko Yamashita Shiro Nakamura Tom Mignanelli Dick Roberts William Cushing Emil Hassan Chester Luby Jane Nakagawa Louis Schweitzer MR. K Ray Lemke Richard McCutcheon

Automotive News - May 19, 2008

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