On today’s show, we’re pleased to welcome Garry Clift, owner and president of Clift Buick GMC in Adrian, Michigan. He and Jim discuss the aftermath of the GM workers strike, how it affected Michigan dealerships, and other, more common, dealer challenges.
VIDEO TRANSCRIPT:
Jim Fitzpatrick: Hello, everyone. I’m Jim Fitzpatrick. Thanks so much for joining me on another edition of CBT News. Today, I’m so delighted to have Mr. Garry Clift, who is the owner and president of Clift Buick GMC, right outside of Detroit. Right, Garry? Is that where you’re located?
Garry Clift: Oh yes, yes.
Jim Fitzpatrick: Awesome. Well, good, because we’re going to be talking to you today about the impact that the GM strike has had on your business.
Garry Clift: Perfect.
Jim Fitzpatrick: Tell us a little bit about your store, first. How long you’ve been there, and what kind of volume do you do, and such?
Garry Clift: Well, I was born and raised in Adrian, Michigan. Graduated from Adrian High School in 1970. I bought the dealership in 1980, thought I’d stick here for just a-
Jim Fitzpatrick: Wow, you were a young dealer.
Garry Clift: Yes. 28 years old. I had 13 employees. Thought, “Well, I’ll be in Adrian, Michigan for a couple of years, then I’m going on to the big city.” And I never made it out.
Jim Fitzpatrick: Never made it out.
Garry Clift: I’m still a little dealer in Adrian, Michigan. We sold 121 units last month. We’re doing about 50 Buick GMCs a month, and the balance is used cars, so in Buick GMC we’re doing okay for our sized market.
Jim Fitzpatrick: Sure, yeah. Almost ground zero for the strike, but not quite, right? I mean, just outside.
Garry Clift: Well, they said, “Why would you call?” You know, I was on, I got a little blip in The Wall Street Journal.
Jim Fitzpatrick: That’s exactly right. I saw that.
Garry Clift: And there was just a little blip. It said Garry Clift, and they said, “Why would they call you in Adrian, Michigan?” And then I was on Fox Business.
Jim Fitzpatrick: Wow.
Garry Clift: At 5:00 o’clock.
Jim Fitzpatrick: That’s great.
Garry Clift: And they took me up to … well, I’m thinking that a lot of the dealers in the Detroit area just said, “Whoa, I want to take a real low profile. I don’t want a bunch of people getting all revved up that I’m on the news talking about the strike.” And I said, “Yeah, I’ll talk. No problem.”
Jim Fitzpatrick: Sure, yeah. Truth be known, the producers all run in the same circles of shows, and the press and such, and they’ll say, “Oh, here’s Garry. He’s willing to talk on this. This makes my job that much easier, so let’s give him a call.” Right?
Garry Clift: Yes, for sure. Yeah.
Jim Fitzpatrick: But thank you so much for joining us on CBT.
Garry Clift: Oh, not a problem.
Jim Fitzpatrick: We really much appreciate your time. I know what it’s like running a dealership, so I won’t waste your time. Talk to us a little bit about what the impact that the strike has had on your business, if any, and then we’ll talk a little bit about the customer sentiments out there.
Garry Clift: Well, you know, there’s so many of the suppliers that are laying off people. That’s had as much impact as the actual employees.
Jim Fitzpatrick: Is that a result of the strike?
Garry Clift: Oh yeah. Yeah. I mean, they aren’t building cars, so they aren’t building parts, and it’s caused a lot of problems, so a lot of these supplier companies just shut down and I know there’s been lots of conversation about that’s happening, but I don’t know if anybody really realizes what the impact is having all these people laid off, because they’re buying cars when they’re laid off.
Garry Clift: You know, we haven’t been able to, we get some of the smaller parts but engines, transmissions, the big stuff, we can’t get.
Garry Clift: We can’t get, so that’s had an impact, and then you know, we had a situation a couple of weeks into the strike. There were rumors that there might be the possibility that they’d settle, and everybody was happy, and then it didn’t happen, you know? It didn’t happen, it just kept right on going, so.
Garry Clift: A lot of ups and downs.
Jim Fitzpatrick: What’s the estimated time that it will take for things to get back to normal?
Garry Clift: I have some friends. They’re being asked to work seven days a week, 10 hour days.
Jim Fitzpatrick: Oh wow, they’re ramping up quickly.
Garry Clift: Until March or April. I’m not sure when, but there’s some heavy work schedules going on right now.
Jim Fitzpatrick: I bet.
Garry Clift: You know, and it’s going to take some time for them to catch up.
Jim Fitzpatrick: In a small town like yours, right outside of Detroit, what’s the sentiment of the people there? Are there people that are, “Yeah, let’s strike, and this is a good thing.” And then others that are, “Hey, get those guys and girls back to work, and what’s all this strike talk?”
Garry Clift: You know what? I’m sure there’s all that kind of stuff going on. I got friends that are employees. I got lots of friends that are employees. I got lots of friends that work for General Motors, and you know, I feel like, “Come on, guys. Let’s just get it figured out, and get back to work, and there’s plenty of competition in this world, you know. We got to make it happen.”
Garry Clift: And right now, you know, GM sends in people to try to make me more profitable because they think if I’m a more profitable dealer I’ll do a better job for them, and I think the same kind of philosophy has to be if I can get a good package put together for my employees, will they make better employees, and will they make better cars and parts? And the same thing, I think, is true for General Motors.
Garry Clift: If they don’t get a good return on their investment, they can’t have world-class cars, they can’t dominate the world, they can’t do all that stuff, and so you know, come on, let’s all come together, let’s get a package that works for all of us, and we got a lot of world to fight. There’s a lot of competition. Heavy-duty competition. We can make it happen.
Jim Fitzpatrick: Oh, there’s no question about it out there. Everybody wants GM’s customers if they can get them, right? Even during this downtime.
Garry Clift: Sure. Oh yeah. For sure.
Jim Fitzpatrick: But I would imagine that your customers, in a big way, want to buy what they build, and want to support the domestic brands that are out there, right?
Garry Clift: Yes, they do. Yes they do, yes. I don’t have a foreign franchise in my town.
Jim Fitzpatrick: Really?
Garry Clift: None.
Jim Fitzpatrick: What kind of a day supply did you have before the strike, and what are you looking at today?
Garry Clift: Well, you know what? Really, I have some dealer friends that did have inventory problems, but I haven’t had inventory problems, really.
Jim Fitzpatrick: That’s great.
Garry Clift: We’re going to be short in some areas, and it’s going to take some time. I mean, they quit allocating cars for a month, and so that hurt, some.
Garry Clift: But you know, I think we’re going to be okay. I mean, a lot of our Buicks are built in China, or Korea, or all over the world, so-
Jim Fitzpatrick: Let’s talk about that for a second, now that, obviously, the industry is shaking in their boots a little bit over these tariff situations, and talk to us about that. Is that going to be a big concern here in 2020?
Garry Clift: Well, I don’t know that myself as a dealer is going to have a problem. I’m hoping. I mean, I guess if they get really ridiculous with some of these tariffs, it’s going to impact our pricing and impact our ability to sell, but I haven’t seen that yet, you know? And I don’t know, really, I’m not that familiar with what’s going on in Washington and how this is all going to play out, but GM’s not telling us to be concerned at the moment.
Garry Clift: In fact, I went to a dealer meeting, a leadership meeting, a month ago, and I walked out of there as excited about the Buick GMC franchise as I’d ever been.
Jim Fitzpatrick: Really?
Garry Clift: You know? They got some great, great plots on where we’re going with product, and what we’re doing, and they’ve got a plan, and I like it. I’m pumped up.
Jim Fitzpatrick: That’s great. That’s great that you feel that way.
Garry Clift: I can do this Buick GMC thing. Yeah.
Jim Fitzpatrick: Yeah. Have you thought about opening other locations? Either franchises or the same brand in other areas?
Garry Clift: No, I’m just going to get big where I’m at. I’m 67 years old. I don’t have any intention to retire. I like being a car dealer. I’ve always liked being a car dealer, and you know what? With the way the internet is right now, I can really, really, really knock the ball out of the park in Adrian, Michigan. I don’t have to be on a four-lane highway. I don’t have to be right in downtown Detroit.
Garry Clift: People are driving to me right now, and we’re doing as much as we can over the internet, you know? And if we could give them an Amazon experience in the little town of Adrian, Michigan, that’s what I’m looking for is what can I do with just this building.
Jim Fitzpatrick: That’s exactly right. How do you feel about, you know, we hear a lot about margin compression. Do you experience that in your store, is that a problem?
Garry Clift: Oh yes.
Jim Fitzpatrick: You know, every dealer is, “We need to make more money on these cars.” Because of the internet, you mentioned it earlier, it’s tough to make a buck selling a new car these days. Do you find that to be the case?
Garry Clift: Yes I do. Very much so, because we have our standards of excellence bogie that I have to hit every month for Buick. I have to hit every month for GMC. And I mean, we’re all blowing our brains out selling these vehicles at next to nothing profitability with our only intention is we have to hit our bogie every month, and that’s how we make our money, so I don’t think it’s a particularly good business model, but GM seems to be afraid to walk away from it.
Garry Clift: They want us to have these bogies we chase every month.
Jim Fitzpatrick: Yeah, the stairstep programs that OEMs offer seem to be a real bone of contention with a lot of dealers and dealer groups that are out there.
Garry Clift: Yes sir. Yes sir.
Jim Fitzpatrick: Because they feel it gives them an unfair advantage in the marketplace, you know?
Garry Clift: Well, and I think that they’re overthinking the incentives, and they’re too complicated, you know? You can’t just say, “Hey, I’m going to give you 500 dollars off on a car.” I know they got to have, if you do this, and you do that, and you look at this, and you look at that, and you got this trivia.
Jim Fitzpatrick: I was going to say, somebody in the ivory tower comes up with that stuff that’s never worked a day on the showroom floor.
Garry Clift: No.
Jim Fitzpatrick: Where you’re in a desperate position to say, “Wait a minute, how do I figure the cost on this car?”
Garry Clift: There’s no simplicity at all. That’s what we’re asking for right now is, “Guys, come on. You’re overthinking this thing. Let’s just give a good, consistent program, and we’ll sell cars. We’ll make it happen.”
Jim Fitzpatrick: And how will you finish the year? Up, down, what are you looking at in your store? Do you think it’ll be a winning year for you?
Garry Clift: I’m really pushing right now. We’re going to work real hard on coming up with our business plan of greatness. What should a Buick GMC dealer in the Midwest be doing from a profitability standpoint and what’s doing a good job in all the different areas? You know, new car, used car, service, body shop, detail. The whole thing.
Garry Clift: And I’m working real hard on setting my expectations, and then we’re going to work real hard on putting all our processes in writing so there’s no confusion, and then I have what we call a development review, and I go to each one of our staff members and I say, “At the end of the day, where do you want to be? What’s your goal for your career?” And not everybody’s got a goal.
Jim Fitzpatrick: I know.
Garry Clift: Some of them say, “Hey, I’m just here. I’m happy making my money and that’s all I want.” I say, “When you leave this plant, what do you want?” And every once in a while, somebody says, “You know what? I’d like to be a manager, or I’d like to own a dealership, or I’d like to be President of the United States.” Whatever it is, I don’t care, but let’s talk about it. How are we going to get you there?
Garry Clift: You know, what’s going to happen? And we’ve had some success with that, you know what? And I haven’t really had much success hiring high-level positions from outside. You know, it’s if I can find the right person with the right mindset, and they’ve got some fire in their belly, and they want to do something, that’s exactly what I’m looking for. That’s perfect.
Jim Fitzpatrick: For some of the disruptors out there that we see in the marketplace, such as a Carvana or a Vroom that sold a couple hundred thousand or almost a couple hundred thousand of used cars to their consumers while they’re on their couch with an app, they’ve ever driven the vehicle, they didn’t even go to a dealership, they simply went to an app on their phone and had a vehicle delivered right to their home.
Jim Fitzpatrick: Do you see that as the future of our industry or do you think that’s a fad?
Garry Clift: I think it’s the future. No, we have that conversation right now, and you know, I have a performance center. We buy private party used cars. I’m trying to get really good at that, and Carvana is probably, in Adrian, Michigan, Carvana is on TV. They’re one of my biggest competitors, and they’re the model right now, you know, and we’ve got to get good at doing everything we can over the internet, over the phone.
Garry Clift: I’ve got to drive to them, whatever I can do. That’s the only way I’m going to stay in the game. I think that is the future. Totally.
Jim Fitzpatrick: Yeah, that is for sure. And are you moving towards an online sales process that will allow a consumer to one day buy a car from your website, and do the paperwork, and everything, have it delivered to their door, as well?
Garry Clift: Yes, yes. I think that’s critical. No, I think Carvana and all these Carvana-types, they’re the model right now, you know, and I understand that Carvana, they want to be a supermarket leader, you know? They’re going to pave all kinds of new ground, and you can’t just ignore these people. It’s nice if I can get somebody to drive to me, and come in my dealership, and work with my face to face.
Garry Clift: But I’m going to dramatically increase the number of people that are going to do business with me if I can do everything remotely. They can sit in their living room, they can do everything and make it happen, and I can deliver the car to them.
Jim Fitzpatrick: A full Amazon experience, huh?
Garry Clift: Yeah, well, I think it’s going to be an advantage to a car dealer in Adrian, Michigan.
Jim Fitzpatrick: Sure.
Garry Clift: I can compete with anybody now.
Jim Fitzpatrick: That’s for sure. A guy in your position that’s been in the business for four decades and running a smooth operation, you know, I often ask this, what are some of the things that keep you up at night about either your dealership or the industry as a whole?
Garry Clift: Well, finding the right people is certainly a challenge, you know, and I got to get better at recruiting, I got to get better at onboarding. We’re really working hard, trying to hire the right technicians, you know, and I’m going to spend a lot of money remodeling my service department, but it’s more so that when I walk a candidate through the dealership I can paint an exceptional picture and say, “How would you want to work here?”
Garry Clift: You know what, this is going to be a great place, a great experience. We’ve got good ideas, good people, you can really excel in your career, so it’s really just putting together that right recruiting process to bring in the top talent, surround yourself with the right people.
Jim Fitzpatrick: Well, Garry Clift, owner and president of Clift Buick GMC, I want to thank you so much for joining us on CBT News. It’s been very much appreciated.
Garry Clift: Well, thanks for having me on the program.
Jim Fitzpatrick: Love your insights, and your attitude. It’s like you just took the dealership over and you’ve got all this energy. You go out and do it right.
Garry Clift: Well, I hope someday you fly into Adrian, Michigan to see how we’re doing it, you know?
Jim Fitzpatrick: Yeah, absolutely. You know, I love it. It’s great.
