Automotive News - October 13, 2008 - (Page 49) 56 • OCTOBER 13, 2008 Earl Stewart’s fee fight: 2 views Lindsay Chappell lchappell@crain.com While dealer Earl Stewart campaigns against document fees, other auto dealers say the fees are transparent. Ted Smith, president of the Florida Automobile Dealers Association, notes that dealers must display the charge clearly on the sales contract. Therefore, customers are not being deceived. He also reasons that dealers who do not charge a fee often bury the cost somewhere else in the vehicle’s price: “If a consumer agrees to pay $20,000 for a car, or he agrees to pay $19,000 for the car plus $1,000 added on at the end as a fee, isn’t he paying $20,000 either way?” Stewart sees it in starkly different terms. To him, adding a fee to an al- ready negotiated price is an unfair sales tactic. “If you know you’re going to tack on a dealer fee, then you can advertise your cars at lower prices than you’re actually going to sell them at,” he says. “That hurts me. I can’t advertise my cars at your prices. People hear my price, and then they go to another Toyota store where a sales- man quotes them a lower price. The reason he can quote them a lower price is because he knows the dealership will tack on a $500 fee in the finance department. And it will be nonnegotiable.” Stewart wants a law to stop the practice in Florida. “I think that constitutes a deceptive practice,” he says, “and I want the law to say so.” c GKN supplies driveline parts for Lancer Evo TOCHIGI, Japan — GKN Driveline Torque Technology K.K. will supply driveline components, including power transfer units, for the 2009 Mitsubishi Lancer Evolution RS GKN Driveline, of Tochigi, is a unit of GKN PLC, of Redditch, England. GKN designs and produces driveline components. Autoliv lightens airbag STOCKHOLM — Autoliv Inc. has developed an anti-sliding airbag that is 2.2 pounds lighter than the existing anti-sliding airbag. The product was introduced in the two-door version of the 2009 Renault Megane shown this month at the Paris auto show. Autoliv, of Stockholm, develops and manufacturers automotive safety systems. Citation restructures DETROIT — Citation Corp.is restructuring into Industrial and Transportation business units, eliminating 18 percent of its corporate salaried work force and closing its Lufkin, Texas, foundry. The foundry closing in March will affect 35 salaried and 340 hourly workers. Citation, of suburban Detroit, designs and manufactures cast, machined and assembled components. MIKE HAMEL From left, Earl Stewart said sons Jason, Stu and Josh initially weren’t interested in going into the car business. Stewart says Stu “told me he thought car dealers sometimes have a dishonest image.” So he decided to alter his business practices to make the family business more appealing to them. obituaries Thomas Bonsall TOWSON, Md. — Automotive historian and journalist Thomas Bonsall died here July 15 at age 61. He founded Bookman Publishing in Baltimore, specializing in books for old-car buffs. Bonsall won awards for his books The Lincoln Motorcar: Sixty Years of Excellence in 1981 and Pontiac! They Built Excitement in 1992. Bonsall founded Ride&Drive Features in 1980, which tests new cars. He also was former automotive editor for Palm Beach Illustrated and Palm Springs Life magazines. STEWART Dealer’s fee stance has rivals fuming continued from Page 4 sons, Stu. After majoring in anthropology at the University of Florida, Stu Stewart wanted to teach for a living. He also was interested in a career in Florida’s luxury home business. What is it, Stewart asked his son, that you don’t like about the car business? His son was blunt, Stewart says: “He told me he thought car dealers sometimes have a dishonest image. And I had to admit he was right.” Then Stewart had a scare. “I almost died,” he says. Pledge Stewart was diagnosed with colon cancer. The cancer prompted him to take a hard look at his priorities. He decided to remake the auto industry — or at least his corner of it — into something more appealing to his sons. He stopped tacking $495 dealer fees onto his customer contracts. He acknowledges that store profits initially dropped $200 a unit as a result, although they have improved since then. But a gratifying thing happened: More customers came into the dealership in response to his nofee practice. Since dropping the fees, store volumes have more than doubled, he says. In 2003, the last full year of charging fees, his dealership sold 2,039 new vehicles. In 2006, he sold 4,172 new cars and trucks. Through August 2008, he has sold 2,492 new vehicles. He began to speak out publicly about what he believes is wrong with auto retailing. He recently railed in his blog about the sale of nitrogen tire refills as a deluxe service, decrying claims that nitrogen refills, at $25 a tire in some cases, are any better than ordinary air refills. Many of his competitors have been baffled by his zeal. Even those who agree with him wish he wasn’t making such a stink. Stewart is convinced that many of his critics who post anonymously on his blog are fellow Florida retailers. One of them recently chided him for criticizing his fellow dealers and of trying to be a “modern-day Robin Hood.” “The world doesn’t need Robin Hood anymore,” the critic told Stewart. “What we also don’t need is a one-man show trying to run down every dealer on the planet for the good of his own profits.” “ I haven’t lost any plaud him striking out at others.” friends over this. My What’s the problem? Smith and the Florida dealers association heartily defend the practice of adding dealer fees to sales contracts as customers wait in the dealership finance department. “It is legal and it is not a deceptive practice,” Smith says (see story, above). Smith vows to fight any effort to end the practice or have legislation clamp down on it. He believes it will continue to roil the Florida industry as long as Earl Stewart continues to campaign about it. Meanwhile, Stewart is measuring success by a different yardstick. His no-fee policy and his public stance on dealer habits helped draw his son into a management role at the dealership. Stu Stewart is now running the company’s Scion operations. Stu’s two younger brothers also have joined the business. And three years after having colon cancer surgery, the elder Stewart reports that he is cancer-free. “The general rule is that if you make it for five years, you’ve beaten it,” he says. “But it sure puts your life in perspective. It makes you think about what you’re doing and why you’re doing it. “I know a lot of guys out there depend on these dealer fees — especially right now when the economy is so bad. But I did away with them, and my business got better. I can be proud to talk to my kids about what I do for a living. That’s important to me, and it’s important to my sons.” c attitude is that the people who have dropped me weren’t my friends to begin with. EARL STEWART Toyota dealer, North Palm Beach, Fla. ” Slander suit In August, Stewart’s campaign escalated into a courthouse fight over not only the document fee issue but his integrity. On Aug. 12, Stewart filed a lawsuit in Palm Beach County Circuit Court alleging that Ed Morse Honda in Riviera Beach slandered him in a radio ad over the issue. The ad did not mention Stewart or his dealership by name. But according to the lawsuit, an announcer said that “a car dealer” claims in his ads that he doesn’t add a “dealer fee,” but “he packs the equivalent of a dealer fee — or more — in your price. Where you can’t see it.” Ted Morse, CEO of Ed Morse Automotive Group and another pillar of the southern Florida industry, declined to discuss the ad, the lawsuit and Stewart’s campaign in general. Ted Smith, president of the Florida dealers association in Tallahassee, is willing to get into it. Smith’s organization has been taking criticism from Stewart for years. “Earl Stewart is a great auto dealer,” Smith begins. “And I’ve had discussions with him about this. I’ve tried to make the point with him that, look, we’ve got enough problems with our image in this business without giving air to them in public. “I’m glad that Earl adheres to positive pricing practices at his dealership. I applaud that. But I don’t ap- Rex McGuire MONT TREMBLANT, Quebec — Rex McGuire, founder and chairman of McGuire Cadillac in Woodbridge, N.J., died here Aug. 26 at age 77. His father was Daniel McGuire, a General Motors vice president and president of Argonaut Realty Corp. Rex McGuire founded Autohire Leasing Co. in the late 1950s before becoming a dealer. His children Regan, Ryan and Renee now operate the dealership, as well as McGuire Pontiac-Buick-GMC in Little Falls, N.J. Richard Roby GAHANNA, Ohio — Richard Roby, owner of Roby Auto Group, died here Aug. 5. He was 58. The group sells Chevrolet, Mitsubishi, Pontiac, Buick and Suzuki vehicles in the Columbus, Ohio, area. http://www.CIRRUSDESIGN.com http://www.CIRRUSDESIGN.com http://www.CIRRUSDESIGN.com
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