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Wednesday, December 23, 2009

WHERE ARE YOU POSITIONED IN THE WORLD OF SOCIAL MEDIA

A recent newspaper article stated that more than 28 million people in the U.S. use a Blackberry device. An additional 78 million are using an Iphone or Itouch to make calls and wirelessly connect to the internet. Add to that all of the other mobile internet devices in use around the country, and pretty soon it’s easy to realize that the general public is only satisfied by receiving instant, up-to-date and relevant information. Mobile users are accessing the internet with these devices to instantly find your company, research your products and comment on the level of service received at your business. All of this is done instantly and with the simple push of a button. Once the message is sent, it cannot be retrieved and it exists in cyberspace without input unless you intercept it and control the message.


As we end 2009 and move forward into 2010, the most important thing a business can do is examine its position on the web and in social media. Social media and instant communications are now revolutionizing the way Americans comment on their experience with a company. Customers now post comments by instant message, on Facebook, blogs, Linkedin and a host of other sites. As a business owner or manager, you must be aware of what is being said about you and your company by your customers.

Businesses need to be aware of communication trends and how they potentially affect your business. Smart phones have maps showing your address, real pictures of your location, access to blogs and social media. The result is that customers utilize these tools to instantly communicate with their friends and colleagues about the level of service received at your business. The message and responses are instant as is the potential impact on your business. These sites provide a voice to millions to speak honestly and openly on all matters of customer experience. The scary thing is that customers may be having a positive or negative conversation with hundreds of friends via social networking while still shopping at your business. Even more problematic is if you do not even know that the conversation is occurring.

The trick for the business owner is to be a part of the conversation. Whether it is positive or negative, businesses need to engage and try to control the messages that are out on the internet by monitoring what is being said on these sites. If the message is negative, control the potential outcome by offering a solution or response. If the message is positive, pass it on and use it as testimonial advertising. Use social media tools and websites to get your own personal message out about your business, community activities and your products.

Businesses need to have a blog, a Facebook account, and a presence on other social networking sites. Content must be fresh and relevant. This means adding content constantly. Information that is hours, weeks or months old is irrelevant to today’s consumer. If the information is stale, customers turn away and find current information elsewhere. Businesses must monitor what the customers are saying on these sites and respond to both compliments and criticism. The worst thing to do is not be a part of the conversation. If you have a blog, add information to it at a regular interval and use it to respond to compliments or criticisms.

Customers want current and relevant information from the internet. Give them what they want and your business will be successful in the coming year.

Wednesday, December 9, 2009

Walker Automotive Receives 80-Year Award from General Motors

Walker Automotive is pleased to announce that on December 15, 2009 it will celebrate its 80th anniversary as a General Motors partner. The dealership was started in 1919 and ten years later Walker began selling Oldsmobile vehicles. The Oldsmobile franchise was awarded in 1929 and the official name of the company was changed to Walker Oldsmobile Company, Inc. Since then, Walker has sold GM brands including Oldsmobile, GMC, Pontiac, Saturn and Buick.

Steve Kuhl, Zone Manager for General Motors will personally present a recognition plaque to W. Foster Walker III, President of Walker Oldsmobile Company, Inc. The recognition ceremony will be at 4:00 p.m. on Tuesday, December 15, 2009 at 1616 MacArthur Dr. Alexandria.

“In the 80 years since 1929, we have had several GM franchises and have enjoyed a prosperous relationship with GM,” Walker said. “GM has made many changes over the years and, in the last year, has reinvented itself with fewer, stronger and more properly located dealers. We are excited to receive the 80 year recognition and look forward to continuing our partnership with GM for many years to come.”

On June 1 of this year Walker was selected as a General Motors “Key Dealer” for its Buick and GMC brands. GM’s selection of Walker Automotive as a Key Dealer shows the confidence that GM has in Walker being part of the new GM.

Throughout the years, Walker Automotive has endured many changes in the automotive business. This year represents Walker’s 90th year in the car business and its 80th year associated with General Motors.

“We consider all of our employees and customers a part of “Team Walker” and believe that our commitment to honesty, integrity, quality, and excellence help us to maintain lasting relationships with customers over multiple generations. Many of the families we sold to 80 years ago have new generations of family members buying from us today. That is due in large part to the quality of brands that we sell including the long partnership we have enjoyed with General Motors, and our commitment to great customer service” said Mr. Walker.

Walker was founded in 1919 as Alexandria Auto Company, Inc. by Foster Walker Sr. After returning from World War I, Foster Walker Sr. began selling Durant, Reo and Star automobiles from a gas station in Downtown Alexandria. That business eventually became Walker Oldsmobile Company and is now run by Foster Walker III. Ninety years after its inception the dealership has expanded from its meager origins to three locations, 8 manufacturers, three service departments and a collision center. Over the last 9 decades, Walker has won numerous national and factory awards for all aspects of its business and offers new and pre-owned vehicles ranging from quality entry level models to German luxury vehicles.

Thursday, November 19, 2009

WARRANTIES THAT ARE TOO GOO TO BE TRUE

BY: LAWRENCE S. SEARCY, JR.

Almost anyone who watches late night television is familiar with the convincing pitches for service contracts on out-of-warranty vehicles. Most of the commercials promise full coverage for repair bills regardless of the vehicle’s age or mileage. However, increasing media attention of these warranty companies is exposing what many call a telemarketing scam.


In June, 2009, I wrote an article about companies selling service contracts using automated telephone dialers and national commercials. At that time, the Better Business Bureau was warning consumers about unsolicited telemarketing calls from vehicle extended “warranty” companies. In the last three years, the BBB has received more than 1200 complaints and 33,000 inquiries on one of the companies, US Fidelis, based in St. Louis, Missouri. Moreover, a recent Federal Trade Commission settlement with another warranty company, Transcontinental Warranty Company, put the company out of business and awarded damages to victims. Transcontinental was involved in what the FTC called “Your Warranty is About to Expire” telemarketing and postcard scheme that involved more than 1 billion phone calls to consumers. More recently, the December 2009 issue of Car and Driver magazine exposed three companies’ attempts to use bait and switch tactics to get consumers to purchase products they either did not need or did not want. In the Car and Driver article the author called three warranty companies, US Fidelis, Mogi, and Stoprepairbills.com and exposed efforts to pressure consumers into buying products they did not need or would not pay claims for repair bills.

A quick internet search of these and other service contract companies reveals a host of consumer complaints and investigations by consumer groups and state’s attorneys general. Most of the complaints against these companies allege that customers were pressured into buying unwanted products, misled about the coverage that applied or excluded items that the consumer was told would be covered. The Federal Trade Commission (FTC.gov) and the Better Business Bureau (BBB.org) have excellent information on how to avoid being scammed by an extended warranty companies. (For some additional information see my article in the June 2009, Cenla Focus). The most important lesson is to research any company you do business with.

To avoid being scammed by these or any other company soliciting information by phone or internet, be cautious of the information you give. The Better Business Bureau advises consumers to check its web site for the company’s grade. All of these companies mentioned above have a grade of “F” with the BBB, which is the lowest possible grade. Also, use state resources like the Attorney General, the state’s motor vehicle commission or the state automobile dealer association. Each of these agencies can receive complaints and steer consumers to the appropriate reporting agency for a particular issue.

As a general rule, buy products from the people you know and trust. Locally, extended service contracts can be purchased from your local car dealer. These companies are invested in the community in both location and employees. If there is a problem, you can go directly to the dealer for a resolution. If you are not comfortable going to your selling dealer, call one of the agencies listed above to get information on reputable alternatives for purchasing an extended service contract.

When purchasing any warranty product, ask specifically what items are covered by the contract and those that will be excluded. All contracts will exclude maintenance items like tires, oil changes, windshield wipers and the like. Be sure to ask when coverage begins and when it ends. Some coverages are based on mileage while other are based on years in service or a combination of both

It is important to understand the exact price of the service contract and if a deductible exists for a repair. Some contracts have no deductible, some have a single deductible per items repaired, and others require a single deductible payment for each service visit. Also, ask whether the coverage can be cancelled and, if so, whether a refund will be issued to you for the unused term. Many consumers will sell or transfer their vehicle and may be entitled to a refund for amounts paid but not used during the term of the contract.

Protect yourself by dealing with those you know and trust. Do not give out personal information over the phone or by mail to anyone you do not know. Read the manufacturer’s warranty and be sure that you do not pay for coverage that the manufacturer already provides. Finally, trust your instincts. If something sounds too good to be true, it usually is.

Tuesday, November 3, 2009

Treats in Trunks Raises Money for Charity

On Saturday October 31, 2009 Saturn of Alexandria and Walker Automotive hosted the Third Annual Treats in Trunks event.  The successful event raised almost $1,000 for the United Way of Central Louisiana and AMIKids - Alexandria.  The ability to raise this money was due in large part to the many sponsors who donated time, money, food and gifts to the event.  Special thanks to the following:
  • Sonic on Jackson Street and Tad Hunter
  • Opus Broadcasting and Country 103
  • Cheryl Jones and CJ Karaoke
  • Jon Oats and his pony rides
  • Autotrader and Pam Lee
  • AMIKids for volunteers
  • Alexandria Fire Department
  • Sheriff Chuck Wagner, Vince Meadows and the Rapides Parish Sheriff's SWAT Unit
  • United Way of Central Louisiana and its volunteers
  • Kroger stores
  • News Channel 5
  • ABC 31
  • KSYL Morning Show
  • All of the employees at Walker Automotive who donated money to the charities
The event was a great success with more than 350 people participating.  All of the employees of Walker Automotive look forward to another successful event next year. 

Tuesday, October 20, 2009

WHAT IS THE DIFFERENCE BETWEEN A CERTIFIED PRE-OWNED VEHICLE AND A PROGRAM CAR?

By: Lawrence S. Searcy, Jr.
In a tight economy many consumers opt for a used vehicle rather than a new vehicle to save money. Consumers are often presented with different terms like Certified Pre-Owned or Program Car when shopping for a quality pre-owned vehicle. While the terms “certified pre-owned” and “program” vehicle are often used interchangeably by car buyers, they have completely different meanings. A certified pre-owned or “CPO” is one sold by a manufacturer’s franchised dealer on the dealer’s used car lot after undergoing a rigorous inspection. A program car, on the other hand, is a loosely defined term that could include rental cars, vehicles driven by employees or dealer demonstrator car. The reason the distinction is important is because with the consolidations and closings in franchised dealerships, many non-franchised used-car dealers are advertising “program cars” as if they were certified by the manufacturer. Since these dealerships no longer have a new car franchise, they cannot “certify” a used car in accordance with the manufacturer’s guidelines.

In 2008, more than 700 franchised dealerships closed across the country. By July 2009 the number of closings for the year had already topped 1,000 with an estimated 2,200 closings by the end of the year according to the National Automobile Dealers Association. Many were closed because of the economic downturn and many others will close because of the General Motors and Chrysler bankruptcies. Some of these closed franchised dealerships are trying to survive with a used car only operation. In an attempt to maintain a competitive edge, these used car dealers are advertising “program cars” to appear as if they have passed the rigorous tests associated with a certified used car.

A program car is usually defined in the car industry as a late model used car with low mileage. A dealer demonstrator may also be referred to as a program car but it must be sold as a new vehicle since it has never been registered or titled. According to Carfax, approximately 70% of “program cars” are rental cars that are subsequently sold at car auctions. They may not undergo any type of pre-sale inspection and are not sold with any type of extension of the manufacturer’s warranty. A program car may have some of the remaining factory warranty left on it but an additional service contract will cost the buyer extra money.

A “certified pre-owned car” on the other hand must be sold by a franchised dealer and undergo a rigorous inspection process. The vehicle must fit within the manufacturer’s mileage and age restrictions and cannot have prior damage or suspicious title histories. Most CPO programs require a Carfax report or similar title history be given to the customer. The Carfax report will detail the car’s origin, title history and any reported accidents in the vehicle. In addition, the CPO program will extend the manufacturers warranty on the vehicle for additional time and mileage. A program car does not have to meet these requirements.

As an example, General Motors’ CPO program requires that only certified GM dealers sell CPO cars. The vehicles must be less than 4 years old and have a mileage restriction of less than 75,000 miles. GM-trained technicians will conduct a 117-point inspection of the vehicle and repair any non-conforming item. The dealer will also check the Carfax report and be sure no deficiencies exist with the title or damage history. Once the vehicle passes inspection, it will have an additional 12-month or 12,000-mile warranty attached to it from the date of sale. Also, the powertrain warranty will extend to 100,000 miles or 5 years from the original in-service date. Other manufacturers programs are similar and can be found by looking at the manufacturer’s website.

Before buying any pre-owned vehicle, research the dealership, the manufacturer’s Certified program, and the vehicle itself on the internet. Any additional questions should be answered directly by the sales associate. If a dealer is reluctant to disclose the CPO inspection report or the Carfax report, go to a dealer that will provide the information willingly. For more automotive news and information about car purchases, visit http://www.walkerautomotive.com/.

Friday, October 9, 2009

TREATS IN TRUNKS

On October 31, 2009 Saturn of Alexandria will sponsor the third annual Walker Automotive “Treats in Trunks. This event provides a safe trick or treat location for families. Walker employees will hand out candy and there will be a host of fun games and treats for people of all ages. This year’s event will raise money for The United Way of Central Louisiana and AMIKids – Alexandria. The scheduled time for the event is from 4:30 p.m. to 6:00 p.m., at Saturn of Alexandria, 1515 Dorchester, Alexandria. Every year local companies contribute to assist with the event in the form of donations and prizes. Look for the November Newsletter which will contain a full list of companies that helped make Treats in Trunks possible. For more information, contact Khristi Romero at 318-445-6421.


AMI Kids is a non-profit organization dedicated to helping troubled youth develop into responsible and productive citizens. AMI Kids has been active in Alexandria since 2006, there are 56 AMI Kids programs in eight states including 9 programs in Louisiana. The United Way is a non-profit local partnership that links donors and helping agencies with business, government, and other key players in central Louisiana to build a stronger community.

Thursday, September 24, 2009

Can You Text Customers?

TEXTING IN BUSINESS

BY: LAWRENCE S. SEARCY, JR.

In 2007, more than 363 billion text messages were sent in the United States. That number has since risen to more than 1 trillion messages a year in 2008. According to a recent Nielsen poll, teenagers between the ages of 13 and 17 text an average of 1,742 times per month. Most of this messaging is person-to-person. However, with texting popularity rising among all age groups, businesses are starting to use it as a tool to communicate with customers. Many businesses use texting to advertise, promote a product or event, or notify customers of sales. What used to go into the mail is now being sent by e-mail or text.

At first glance, most businesses would not see a problem with texting customers about a special offer. However, there are legalities that must first be considered. Unfortunately, the law has not caught up with technology and texting is caught in the middle of some outdated laws that apply to other mediums such as telephones and emails. Federal agencies, courts and regulatory bodies are now struggling with how to categorize a text message and apply the old rules to a new technology.

Is a text message a phone call?

A federal law called the Federal Telephone Consumer Protection Act (TCPA) generally governs telephone calls. The problem is that the act itself does not define the term telephone call. Instead the regulatory body enforcing the law, the Federal Communications Commission (FCC), considers a text a call even though the law giving the FCC its power does not define it one way or the other. If a text is treated as a call, then businesses need to be aware of at least two implications.

1. A business cannot text a message to any number that is on a business “Do Not Call" list” or on the national “Do Not Call" list.

2. A business cannot send a text message to a cellular phone regardless of whether the number is on the "Do Not Call" list, if the text is sent from an automatic dialer or “robo-dialer.” Be careful because any computer may be considered an automatic dialer.

Is a text message an e-mail?

If the text is considered an e-mail, then any communications to consumers in e-mail format are subject to the “CAN SPAM” Act. The Can Spam Act is another federal law regulating e-mail messages and their content. For example, all commercial solicitation e-mails must contain the sender’s name, physical address, and a notice that the program is cost- free. Additionally, the consumer must have an opportunity to “opt-out” of additional solicitations. Moreover, the FCC has regulations that prohibit sending commercial e-mail messages to mobile devices without express prior permission.

Is a text message both an e-mail and a phone call?


According to the FCC, a text message qualifies as both an e-mail and a call. If this is the case, then businesses wishing to use the technology should comply with both sets of regulations. To do so, be sure to do the following things before sending the messages:

1. Get express prior permission from the recipient before sending the message.

2. Review your company's personal "Do Not Call" list to be sure the recipient is not on the list.

3. Review the national "Do Not Call" list to be sure the recipient is not on the list.

4. Determine if the delivery of the message complies with all of the requirements of the CAN SPAM Act.

In the end, each business needs to determine if the risks of texting are worth the compliance hassles. It may be better to hire an experienced outside consulting firm to implement the program. Also, always be sure to consult with an experienced attorney about compliance issues before starting a new program.

Monday, September 14, 2009

WALKER #21 ON WARDS LIST FOR USED CARS

Every year “Wards Dealer Business” magazine publishes a list of the 150 most successful used vehicle dealerships in the country. The annual list, published each September, ranks dealerships according to total revenue. This year, Walker Automotive ranks #21 nationwide on the list. No other dealer in Louisiana made the list. This distinction comes two months after Walker was named #64 on the Ward’s annual list of the nation’s largest dealerships.

Foster Walker, III, President of Walker Automotive, said he is pleased with the ranking and that the people in the organization are the ones deserving praise. “This ranking marks a significant achievement for our business. In a year when the industry is showing signs of slowing, Walker Automotive continues to excel in all of our operations. This is a real testament to the people in our organization. We are fortunate to have a great sales and management team. They work hard each day and are passionate about their profession. Their enthusiasm shows through our continued growth in a time when the industry as a whole is struggling,” Walker said.

Ray Leggio, Used Car Manager at Walker’s Big Lot Used Cars on MacArthur Drive (one of Walker’s three used car locations), said that the key to success is the right product mix and a number of financing options. “We try to have the vehicles in stock that people want. With the right inventory, we are able to offer competitive financing options through local banks, national lending institutions, credit unions and alternative lending for those customers who may have a negative credit history,” Leggio said.

Wards Dealer Business is an automotive trade publication distributed monthly to more than 25,000 automotive dealers. The annual used vehicle rankings are issued each September with an analysis of the top performing used vehicle retailers based on total used vehicle revenue. In 2008, Walker automotive retailed more than 2,100 used units with a total used revenue in excess of $40 million.

Walker Automotive is a fourth generation family company with more than 180 employees. Walker was founded in 1919 as Alexandria Auto Company, Inc., by Foster Walker, Sr. After returning from World War I, Foster Walker, Sr., began selling Durant, Reo and Star automobiles from a gas station in downtown Alexandria. That business eventually became Walker Oldsmobile Company and is now run by Foster Walker, III. Ninety years after its inception, the dealership has expanded from its meager origins to three new and used vehicle locations, eight manufacturers, three service departments and a collision center. Over the last nine decades, Walker has won numerous national and factory awards for all aspects of its business and offers new and pre-owned vehicles ranging from quality entry level models to German luxury vehicles.

Tuesday, August 25, 2009

Buyer Beware

Buyer Beware



By: Lawrence S. Searcy, Jr.



On a Saturday afternoon, while reading through one of the many automobile trade magazines that come to the office, I noticed another article about two used vehicle dealers being arrested for odometer fraud. Unfortunately, this kind of crime is not uncommon and despite federal laws aimed at protecting consumers, a number of unsuspecting car buyers are defrauded each year by odometer fraud. In this particular article two dealers in Wyoming conspired for four years to misrepresent the mileage on the vehicles that they sold. The dealers would allegedly buy high mileage vehicles and then roll back the odometers and change title documents to increase the value of the car. Every customer that bought a car from these two dealers could have prevented the fraud with a little extra investigation into the car’s history.

This story is important because it notes a growing trend in used car sales. Even though digital odometers are more sophisticated than their old mechanical cousins, they are not immune from tampering. In fact, the National Highway Safety and Traffic Administration (NHSTA) estimated that between 2002 and 2005 approximately 450,000 vehicles have been sold each year with false odometer readings. Total cost of the fraud to consumers is estimated at $1 billion annually.

Congress passed the Federal Odometer Law to prohibit the disconnection, resetting, or alteration of a vehicle’s odometer with the intent to change the mileage stated on it. The law now requires written mileage disclosures to all buyers when ownership is transferred. The law was passed because Congress realized that consumers rely heavily on the mileage to determine issues of price, safety, and reliability.

To protect yourself from unscrupulous dealers, research the vehicle before you purchase. It is best to buy from a reputable franchised dealer and ask questions about the car’s history. For instance, Walker Automotive offers a free Carfax on every pre-owned vehicle. By offering the Carfax upfront, customers can be confident that they are buying a quality, pre-owned vehicle. Providing the customer with a free Carfax report gives the customer the peace of mind that the vehicle has not been wrecked, damaged, or driven more miles than stated on the odometer. If a dealer refuses to give you a Carfax report or similar ownership information, the buyer should be suspicious and use extra caution before purchasing that car from that dealer.

A Carfax report can also be ordered online with the 17 character Vehicle Identification Number (VIN) and for a nominal fee. Each report will contain title information, flood damage reports, total loss accident history, lemon law or other manufacturer buy back claims, the number of owners and other pertinent information.

In addition to Carfax, official state reports on vehicle can be obtained from the state for a nominal fee. Louisiana provides the records by requesting information from the Department of Public Safety, Motor Vehicle Division, in Baton Rouge. A charge of $7.50 will be required for the records. Be sure to contact the office at (225) 925-6388 before making the request because the costs may have changed. When requesting the documents from the DMV be sure to specify what type of information you want and include the VIN, the year, make and model of vehicle. If you suspect that a vehicle odometer may have been tampered, a complaint can be made to the Louisiana Attorney General Auto Fraud Section in Baton Rouge.

Pre-owned vehicles can cost a lot of money and a little investigation can go a long way. Protect yourself from fraud by researching the vehicle’s ownership history before you buy. Beware of dealers that won’t give you the information for free or won’t access the information while you are at the dealership. A Carfax report can be obtained in minutes and it might make the difference of thousands of dollars in the selling price.

Tuesday, August 18, 2009

Walker WOW Factors

  • On any given day Walker Automotive has almost 1,000 vehicles in stock.

  • Every year more than 4,000 customers purchase from Walker Automotive.

  • In June 2009 Walker Automotive was named #64 on the list of the largest automobile dealers in America by Wards Dealer Business

  • Walker has been family owned since 1919 and now is operated by its third and fourth generation family members.

  • Walker Automotive is the largest volume dealer in Central Louisiana selling 1 out of every 3 new cars in the area.

  • Our employees have an average tenure at the dealership of more than 10 years.

  • Walker Automotive is the only General Motors Certified Collision Center in the area.

  • Walker Automotive has an A+ rating from the Better Business Bureau

Friday, July 31, 2009

How to Get a Free Credit Report

A credit report contains information about individuals, their income, bill paying habits, address, lawsuits, arrest records and bankruptcies. Every consumer is entitled to a free credit report every 12 months and all individuals should take advantage of this right to insure the information is correct.


The federal legislation known as the Fair Credit Reporting Act (FCRA) controls credit information and requires the nationwide consumer reporting agencies (Experian, TransUnion, and Equifax) to provide consumers with a free copy of the report when a written request is made. The purpose of the legislation is to promote the fairness, accuracy and privacy of the information in the consumer’s file. This is important because businesses use the credit score to evaluate applications for credit, insurance, employment and leasing.


Under the Act you have the right to know what information is in the credit file and whether that information has been used against you to deny credit. If the information is incorrect or incomplete it can be disputed and corrected. As a general rule of thumb, credit agencies cannot report derogatory information older than seven years or bankruptcies older than ten years.


While many websites promote free credit reports, there is only one website authorized to fill orders for free reports: annualcreditreport.com. Other websites that offer free reports are not part of the federally mandated free program and may try to sell consumers additional products in exchange for the credit report. It is important to note that annualcreditreport.com will never send a solicitation e-mail requesting personal information. If you get a solicitation from a company claiming to be from the free program do not respond by giving out personal information. If you prefer to use the telephone you can call 1-877-322-8228 or mail a request to P.O. Box 105281, Atlanta, Ga. 30348-5281. The government website at ftc.gov/credit has a wealth of information about credit scoring and the information that will usually be found on a credit report.


If you order the report on-line it will be available immediately. If you order by phone the report should take about two weeks to be mailed. The same is true when you request a copy by mail. If inaccuracies are found, you must report the inaccurate information in writing. The company will perform an investigation and usually respond within 30 days. The agency must give you written results of the investigation and another free copy of the report if the information has changed as a result of the report. For more information go to www.ftc.gov.

Monday, July 20, 2009

WALKER NAMED TOP DEALER IN THE COUNTRY

Every year “Wards Dealer Business” Magazine publishes a list of the 500 biggest automobile dealerships in the country. The annual list has been published for 22 consecutive years and ranks dealerships according to total revenue. While overall sales in the industry took a nose-dive, Walker Automotive advanced 11 spaces from number 75 to number 64 on the list. No other Dealer in Alexandria or Central Louisiana made the list.

Foster Walker, President of Walker Automotive said that he is please with the ranking and that the people in the organization are really the ones who should get credit for its success. “Without the tremendous sales, service and support team that we have in place we would be unable to continually grow in an era when so much pressure is put on retail sales,” Walker said. “We remain committed to honesty and integrity in every facet of our business and it is this philosophy that has earned our company an outstanding reputation and continued prosperity.” Walker continued.

Mr. Walker also emphasized that as a fourth generation family company, Walker Automotive always tries to do what is in the best interest of its customers. “Our customers make it possible for us to be and stay in business and we realize that customer loyalty is the key to generations of success. We believe that we are rewarded for our efforts by the vast majority of our customers who are repeat and lifetime buyers.”

Walker was founded in 1919 as Alexandria Auto Company, Inc. by Foster Walker Sr. After returning from World War I, Foster Walker Sr. began selling Durant, Reo and Star automobiles from a gas station in Downtown Alexandria. That business eventually became Walker Oldsmobile Company and is now run by Foster Walker III. Ninety years after its inception the dealership has expanded from its meager origins to three locations, 8 manufacturers, three service departments and a collision center. Over the last 9 decades, Walker has won numerous national and factory awards for all aspects of its business and offers new and pre-owned vehicles ranging from quality entry level models to German luxury vehicles.

Monday, June 29, 2009

Gap Protection

For most people, buying a car will be one of the largest single purchases of their life. In addition to the daunting task of picking the right car with the correct trim package, you also have to arrange financing and secure insurance coverage before driving off of the lot. Unfortunately, the minute the vehicle is purchased it begins depreciating such that it may not be insured for what you owe in the event the car is totaled or stolen. Most people think that when they buy “full coverage” insurance that the car loan will be paid off in the event that the car is later totaled. In many instances this assumption is incorrect.

In the early part of a vehicle loan, most people are “upside down” in their vehicle. That means the value of the vehicle is less than what is owed is owed to the finance company. When this occurs there is a “gap” between what the insurance company will pay for the total loss and what is actually owed to the finance company. There is, however, a special kind of protection called “Gap Coverage” that is designed to protect consumers from being upside down in the event of a total loss. Simply put, the protection pays the “gap” between what the insurance company pays (minus your deductible) to the finance company for the loss and what you owe the finance company. In many cases there is a gap because the actual cash value of the vehicle is far less that what is owed on the loan.
Here is how it happens:

Basic Information:

What you owe the bank when car is totaled: $23,000.00
Actual value (what the insurance pays you) $20,000.00
Primary insurance deductible $1,000.00

Insurance Payment:

Actual Value: $20,000
Minus Customer Deductible -$1,000
=============
Amount Insurance Pays $19,000

What you owe the bank $23,000
Minus amount paid by Insurance - $19,000
=============
Amount needed to payoff car loan (“GAP”) $4,000

Gap coverage would pay this $4,000 in the event there was a total loss. Without Gap, another $4,000 would have to be paid to the finance company before purchasing another vehicle or $4,000 negative equity would have to be rolled into another loan agreement.

Because of the large amount of customers that are now financing negative equity or taking low annual percentage rates in lieu of rebates, Gap protection is becoming more popular. In fact, in Louisiana, every customer purchasing a vehicle with credit must be offered the opportunity to purchase or decline Gap coverage. Buyers who choose to put little or no money down on a vehicle, or those who roll unpaid balances into their new loan, probably need Gap coverage. The same is true for those buyers who extend their loan terms beyond 48 months or add expensive accessories to the vehicle and roll the amount into the loan agreement.

Gap coverage can be purchased from many places but is easiest to obtain from the car dealership at the time you purchase your vehicle. The amount of the coverage is purchased separately but may be included in your finance agreement. The charge varies but is usually paid for with a single premium charge for the coverage. In many cases, Gap coverage bought at the dealership will also cover the amount of any insurance deductible. Other Gap policies may not offer deductible protection so it is best to ask before purchasing. Finally, Gap will not cover amounts already paid to the lender, past due premiums, personal property taxes or other charges. If you think you may need Gap coverage, contact your local new car dealer for more information.

Thursday, June 4, 2009

Walker Automotive Selected as a Key Dealer By GM

By Lawrence S. Searcy, Jr.

Walker Automotive is pleased to announce that on June 1, 2009 it was selected as a General Motors “Key Dealer” for its Buick and GMC brands. On June 1, 2009 General Motors filed for Chapter 11 bankruptcy protection with the Federal Bankruptcy Court in the Southern District of New York. In doing so, GM hopes to reinvent itself with fewer, stronger and a more properly located dealer network. GM’s selection of Walker Automotive as a Key Dealer shows the confidence that GM has in Walker being part of the new GM.

Throughout the years, Walker Automotive has endured many changes in the automotive business. This year represents Walker’s 90th birthday and Walker is excited about the next 90 years. GM’s announcement means that Walker will continue to sell and service GMC and Buick vehicles well into the future. The Pontiac brand will be phased out over the next 18 months but Walker will continue to provide sales support, warranty service and parts on the all Pontiac vehicles into the foreseeable future.

“We remain committed to honesty and integrity in every facet of our business and it is this philosophy that has earned our company an outstanding reputation and longevity,” said Foster Walker III, President of Walker Automotive. Mr. Walker emphasized that as a fourth generation family company, Walker Automotive always tries to do what is in the best interest of its customers. “Our customers make it possible for us to be and stay in business and we realize that customer loyalty is the key to generations of success. We believe that we are rewarded for our efforts by the vast majority of our customers who are repeat and lifetime buyers.”

Walker was founded in 1919 as Alexandria Auto Company, Inc. by Foster Walker Sr. After returning from World War I, Foster Walker Sr. began selling Durant, Reo and Star automobiles from a gas station in Downtown Alexandria. That business eventually became Walker Oldsmobile Company and is now run by Foster Walker III. Ninety years after its inception the dealership has expanded from its meager origins to three locations, 8 manufacturers, three service departments and a collision center. Over the last 9 decades, Walker has won numerous national and factory awards for all aspects of its business and offers new and pre-owned vehicles ranging from quality entry level models to German luxury vehicles.

Wednesday, May 20, 2009

Warranties and Extended Service Contracts

Warranties and Extended Service Contracts
By: Lawrence S. Searcy, Jr.

I received an e-mail this week from the Better Business Bureau warning consumers about unsolicited calls from vehicle extended “warranty” companies. These “warranty” companies have attracted attention from congress because of the number of calls received on home and cell phones. Congress is now considering measures to stop calls from computer assisted dialers (“robo-callers”) to consumers hawking these after-market products. Telemarketers are using the automated dialers to pose as manufacturer representatives and contact consumers claiming that the consumer’s manufacturer warranty is about to expire. The call solicits the customer to purchased extended warranty coverage on the vehicle. While the context of these calls is deceptive, purchasing an extended service contract may sometimes be in the consumer’s best interest.

What is an Extended Service Contract?

A warranty and an extended service contract are not the same thing even though the terms are often used interchangeably. Warranties are offered on new products at the time of purchase. Warranties are protected by federal law under the Magnason-Moss Warranty Act. The act, passed in 1975, requires all manufacturers and sellers of new and unused consumer products to provide the consumer with detailed information about warranty coverage. In vehicle sales, every new vehicle sold in the United States has a limited time transferrable warranty that covers mechanical breakdown for a period of miles or years, whichever comes first. The warranty is published in the vehicle’s operating manual and specifically details the items covered and the length of coverage. Most people will be familiar with the standard 3-year / 36,000-mile warranty.

“Extended Service Contracts” are not warranties. They are supplemental coverage to the manufacturer’s factory warranty and can be purchased separately by the consumer. They provide mechanical repair protection for items not covered by the manufacturer’s warranty or for items that fail after the lapse of the manufacturer’s warranty. Extended service contracts are not called warranties because under the law, warranties cannot be sold. For people who will keep their vehicle beyond the coverage period of the new vehicle warranty, an extended service contract will allow the consumer to know their total out of pocket repair expenses through the life of the contract – for example 5 years /100,000 miles.

Who can Purchase an Extended Service Contract?

Extended service contracts can be purchased for new, used and manufacturer certified used vehicles. A consumer may want one for a new vehicle to cover items not normally covered by the manufacturer or to use when the original factory warranty expires. On a used or certified used vehicle, the same may apply. There may be some remaining factory warranty but the consumer wants to be protected for expensive repair costs when the original warranty expires. Extended service plans may even be purchased after you have owned the vehicle but before the expiration of the original warranty. For these types of contracts, the company usually requires that a certified service center inspect the vehicle before the contract can be written to cover the vehicle. The best place to inquire about one of these products is from your local selling dealer. When you purchase from the selling dealer you know that the dealer will honor the program when you bring you vehicle in for service. Further, the dealer is associated with the manufacturers and is the most knowledgeable about the coverage that would best fit your vehicle.

Today’s vehicles have more than 14,000 moving parts, on-board computers, entertainment centers and a host of other amenities. Because of the complex interaction of all of the mechanical and electrical parts, the odds are in favor of something going wrong with a vehicle during the ownership experience. Unfortunately, the average costs of repairs are expensive. For instance, engine repairs can cost as much as $6,000.00 while something as mundane as an air conditioning compressor can cost more than $1,500. Facing these repair costs, many people elect to purchase an extended service contract at the time they purchase their vehicle.

What is Covered?

When considering an extended service contract, it is important that the selling dealer notify you what will or will not be covered. The list of non-covered items should be limited to maintenance items (oil, filters, coolant, and scheduled service), wearable replacement items (battery, shocks, struts, break pads, rotors, etc.), and appearance items (exterior molding, ornamental items, metal, paint, etc.). The price for the contract will vary with the duration in years and mileage and there may be a deductible for each claim. Additionally, the price will increase for diesel engines, four-wheel-drive trucks or high-end foreign vehicles. Each selling dealer should be able to provide a list in advance of the items that will be covered and those that will not and the complete out-of-pocket cost for the contract.

Questions to Ask a Selling Dealer.

A selling dealer should be willing to disclose to you all of the information about the company that backs its extended service products. Ask the dealer how long the dealer has been doing business with the company. Be sure to ask the cost of the product in advance and how much it may increase your monthly payment on the vehicle. Be sure to understand any limitations on the contract and the duration of the coverage. Ask whether the contract is transferable or whether a refund will be issued to you in the event you sell the vehicle before the end of the protection period. If there is a deductible, ask the amount and whether it is a per-claim deductible.

In addition to coverage for repairs, many extended service contracts offer other benefits and features. A 24-hour towing and roadside assistance benefit may be included for a flat tire, dead battery or other emergency. Some products offer replacement car rental during repairs and nationwide acceptance at other dealers in the event you are away from your selling dealer during a mechanical breakdown.

Like most other products, a consumer should beware of unknown and unwanted solicitation by phone or e-mail. Instead, it is best to see your local dealer for extended service products and information. Your dealer can give you specific information about the products that are best suited for your type and age of vehicle and can also offer a range of financing options. In the long-term, extended service contracts can limit your out-of-pocket repair costs and increase the long term value of your vehicle.

Wednesday, March 25, 2009

Buy Local

Since the beginning of the recession, economic downturn or whatever you may want to call the current state of the economy, legislative leaders from local governments, statehouses and national politicians have begun touting “Buy Local” campaigns. Even before the economic downturn, cities like Las Vegas and Baltimore were experiencing shrinking tax revenue from on-line sales. In response, large “buy local” campaigns were started to urge local residents to keep tax dollars in the community.

In December 2008 and January 2009 Louisiana Governor Bobby Jindal and Baton Rouge Mayor Kip Holden hit the airwaves to launch buy local campaigns. These public service announcements were possible with free airtime provided by Cox media. Suddenlink Communications and local Alexandria stations teamed up to run ads touting the message that now is a great time to purchase a car. Noticeably absent, however, were any local elected officials leading a buy local movement. I do understand, however, that Alexandria is now launching some type of campaign called “Smartalex” under the direction of Mayor Roy’s community development team.

Why the sudden interest in buy local campaigns? With the downturn in the economy, cities are seeing tax revenue dry up from lost tax dollars generated from sales taxes. Car dealers are major contributors sales tax revenues nationwide simply by virtue of the dollar value of the items they sale. Simply put, car dealers generate millions in tax dollars every year for the state and local communities. In 2007 (the most recent year numbers are available), Louisiana car dealers put up some staggering numbers:

Average Dealership sales: $31.6 Million
Total Sales from New vehicle dealers: $10.6 Billion
Dealership sales as a percent of retail sales: 21%
Total number of new vehicle dealer employees: 18,210
Average number of employees per dealership: 54
Average annual earnings per employee: $43,342
Annual average payroll of dealerships: $2.33 Million

Slow car sales mean decreased tax revenue flowing to the city and local governments from sales tax revenue, corporate tax revenue, and payroll tax revenue.

Studies show that for every dollar spent locally the recirculation rate of that dollar in the community is many times higher than if the dollar is spent in another community. In other words, purchasing outside your community is supporting another’s tax base. Locally, automobile dealers employ several hundred people in sales, administrative jobs, as technicians, and managers. Average salaries at local dealerships are higher than the median wage in other industries. Moreover, local automobile dealers give generously to local charities. When local citizens go out of town to purchase automobiles, local tax revenue dries up, employment opportunities at dealerships shrink, wages go down and charitable contributions shrink.

Why is this important now? As you drive around the city look at the advertising license plates on the front and back of your friends and neighbors vehicles. Then look at your local politicians – police jurors, mayors, city council members, and school board members. Look also at your local business leaders – real estate agents, local shop owners, entrepreneurs, and corporate executives. What do you see? Are they are driving a car that they purchased out of town or from a local dealer? If from out of town, calculate the dollar impact this has on your community. How many direct and indirect jobs are affected by a single automobile purchase outside the community?

According to Donna Andries at the Rapides Parish Sales Tax office, tax revenues in 2007 from motor vehicles sales totaled $10,122,639. That number decreased 10% in 2008 to $9,051,975. Automobile sales in the Alexandria area year to date 2009 from 2008 are down 31.5% for domestic cars, 28.6% for import cars and 32.6% for trucks. Of course, a decrease in sales in 2009 is expected. However, the impact locally can be drastically reduced if those people who are going to buy this year do so locally instead of out of town.

On Tuesday, March 24, 2009 the Alexandria City Council debated a measure to use surplus funds to balance the budget for this fiscal year. Councilman Chuck Fowler noted that the reason for the buildup in the surplus was because of the increased tax revenue over the last several years. Councilman Fowler then specifically noted that usually sales taxes would increase, but this year an increase is unlikely specifically due to the decline in new car sales. This may mean decreased funding from the city for Mardi Gras, Downtown Rocks, the Alexandria Zoo, Art Walk and other discretionary programs that make our community unique.

Alexandria needs a buy local campaign and it needs it now. All of our public officials need to get behind the movement and support all of our local retailers regardless of size. Simply put, support you local business, their employees, and the charities that they support. Support those people and politicians in your community who buy local and keep tax dollars in the community to pay for the services we need and enjoy.

Wednesday, March 18, 2009

Walker is 90 - Happy Birthday

WALKER AUTOMOTIVE CELEBRATES 90 YEARS
IN CENTRAL LOUISIANA

By: Lawrence S. Searcy, Jr.

March 2009 represents a milestone for Walker Automotive as the local car dealership celebrates its 90th birthday. Walker was founded in 1919 as Alexandria Auto Company, Inc. by Foster Walker Sr. After returning from World War I, Foster Walker Sr. began selling Durant, Reo and Star automobiles from a gas station in Downtown Alexandria. That business eventually became Walker Oldsmobile Company and is now run by Foster Walker III. Ninety years after its inception the dealership has expanded from its meager origins to three locations, 8 manufacturers, three service departments and a collision center. Over the last 9 decades, Walker has won numerous national and factory awards for all aspects of its business and offers new and pre-owned vehicles ranging from quality entry level models to German luxury vehicles.

“We are committed to honesty and integrity in every facet of our business and it is this philosophy that has earned our company an outstanding reputation and longevity,” said Foster Walker III, President of Walker Automotive. Mr. Walker emphasized that as a fourth generation family company, Walker Automotive always tries to do what is in the best interest of its customers. “Our customers make it possible for us to be and stay in business and we realize that customer loyalty is the key to generations of success. We believe that we are rewarded for our efforts by the vast majority of our customers who are repeat and lifetime buyers.”

While the physical locations have changed the Walker business model has remained the same. “We celebrate this month with our 90th birthday and thank all of our customers, employees and friends who have made it possible for our company to be so successful,” Walker said. Various events celebrating the birthday are scheduled throughout the month of March.

Tuesday, March 17, 2009

Employee Free Choice Act - Really?

The Employee Free Choice Act – What Is It?

Again this year, the United States Congress is considering legislation to make it easier for union organization. The Employee Free Choice Act, (“EFCA”) amends the National Labor Relations Act “to establish an efficient system to enable employees to form, join, or assist labor organizations, to provide for mandatory injunctions for unfair labor practices during organizing efforts, and for other purposes.”(H.R. 1409) Any small business owner (or manager), regardless of the number of employees, needs to educate themselves on the potential impact of this legislation.

Over the last 50 years the impact of labor unions has been decreasing. In the 1950’s union membership hovered around 35%. That number has decreased to around 7.5% today. The membership decline is attributable, in part, to the number of federal laws that have been passed to protect workers from the abusive practices that once existed in the workplace. There are hundreds of federal and state laws that protect consumers, employees, and part-time workers. In the automobile sector there are no less than eighty-six federal regulations that apply to retail automobile franchises and repair shops.

In an effort to bolster union membership, organized labor is fighting very hard for the EFCA. In a nutshell, the EFCA changes the current law in three ways: (1) Recognition, (2) Negotiations, and (3) Penalties.

Recognition: The current law requires that employees sign union cards indicating their support for an organized union and then petition with the National Labor Relations Board to form a union. Both the employer and the union organizers then campaign for a period of 30 days either for or against the union. After 30 days, the NLRB supervises a secret ballot election and, if the union passes, then the company must recognize the union as the bargaining entity for the employees. The EFCA would essentially cancel the right of companies to campaign against the union. Instead, once the union has 50% of the cards signed, the company would have to recognize the union. No secret ballot. The fear is that employees would be pressured by the union to sign the card and any secret vote against a union would be lost.

Negotiations: Current law allows the parties to bargain for contracts in “good faith” and until a contract is reached the parties continue to work under the status quo. A contract is reached only when both parties agree to the terms. The amendment to the law would change this procedure. Instead, if a contract is not reached in 90 days the contract is sent to mediation (non-binding arm twisting). If after 30 days of mediation a contract is not reached then the matter goes to binding arbitration. The arbitrator will set the terms of the contract which will be in effect for two years. Here, the fear is that the terms may be so onerous that the company would be unable to meet the contract terms without serious alterations to the work environment.

Penalties: Under the new law the penalties are only enhanced for company violations not for union violations. Back pay awards are increased three times and fines could reach up to $20,000 per employer violation. Shouldn’t any change in penalties be reciprocal?
The law can be easily researched on the internet or by going to the Library of Congress’ web site http://thomas.loc.gov/.

Thursday, February 19, 2009

Surviival

Surviving a Recession

A recession, depression or any other down turn in business requires a leader to look introspectively at their business and determine the best way to move forward. Sometimes, a business simply cannot make it through tough times. Most, however, can survive. And with hard work and a well thought-out strategy, most will emerge stronger.

First, restructure immediately to meet the demands that exist today – not under your old business model. Take a good hard look at everything in your business and shed the items that are not completely necessary. In household budgets, families talk in terms of food, water and shelter to survive. Take care of those items first and lose everything else. The same is true in business. Don’t wait to see what happens tomorrow because tomorrow is too late. Start making changes and restructure your business model now. Scour your financial data and determine what vendors you can cut and which ones might offer you a discount to keep your business. A full day examination at your financials will reveal expenses that you had long forgotten about and may not be necessary anymore.

Second, bring all of you leaders together and develop a single action plan for all departments. The plan must set achievable goals and a realistic timeline for completion. Force all of your people to acknowledge hurdles and develop a plan to overcome all of the hurdles. Every department should find expenses that can be cut. Trimming expenses is the easiest way to increase your net profit or shrink your loss.

Third, own all of your processes. As a leader you have to be the single person in charge and delegate to your people. Keep your managers accountable and ensure that they stay on target with the timeline of progress. Hold daily or weekly updates to measure accomplishments. Don’t let anyone off the hook. The other managers are watching how everyone is kept on task. A single forgiving moment can allow chaos in the process.

Identify the key players. Every organization has key employees of every pay grade. Every organization also has a host of unproductive employees that take but don’t give back. Shed the employees who don’t help you or who hurt morale with negativity. Watch your key employees because every competitor is coming after your most productive employees.

Consistently communicate with employees. Employees smell fear and market conditions make all personnel afraid of losing their job. As a leader it is your responsibility to remind employee that while times are tough their jobs are secure. Ask them for input on cost saving measures and they, in turn, will own the process of a turn-around with you. Don’t lie to the employees. Be honest and they will respect you for that and help you emerge as a stronger company.

Communicate with customers. Customer service and customer retention become primary goals. Get out and meet with your customers and assure them that you can still provide the same high quality product and service. Remain enthusiastic and optimistic in front of all of your customers. Be honest but positive. Don’t give your customers a reason to buy elsewhere. Poor quality and bad customer service is the only excuse a customer needs to move their business to the guy down the street.

Don’t lose sight of the original vision that the company had when it started. Continue to set sales goals and mandate that your employees meet them. Goals may have to be scaled back but they should still be met.

Work every day. Entrepreneurs have no days off.

Thursday, February 5, 2009

Back to Basics

In a sales meeting the other day, the General Manager mentioned that “in good times people develop bad habits and in bad times people develop good habits.” Succinctly said, the key to success in today’s environment is nurturing good habits by going back to basics. I am fully aware that this is what every success coach is preaching right now. You cannot pick up a single article in any business magazine without getting bombarded with advice on how to get back to basics, or develop winning habits, or stay positive. The reason these messages are out there is because they are true.

If you don’t know already, these are some good habits to go back to.

Focus on Customer Service. Every customer is much more important now than they were a year ago. Selling was easy over the past few years. In 2006 thru 2008 customers were employed and flush with cash. Banks were giving money to anyone who was breathing and negative equity was not even a hiccup on the way to purchasing a new car. Now customers have to be cultivated and a salesman cannot let a customer walk without pulling out all of the stops.

Spend time with every customer and answer all of their questions. Listen – don’t talk. Talk after you are done listening and when the customer is done speaking. Be professional. Know your product better than anyone else that sells your product and know your competitor’s product better than they do. If you don’t, you can’t answer the customer’s comparison questions and objections.

Demonstrate the product. Train yourself to do the same demonstration every time. When sales are slow, do online training or train with other sales staff. Imagine if you were buying a car. What are the items you would like to see demonstrated? Now turn that around. What items would your spouse like to see demonstrated? What about your kids? Imagine all of that and then demonstrate them all.

Prospect. People are still buying and it is the sales staff’s job to find those people that want to buy. Call on cars for sale by owner on the side of the road or call on car ads out of the newspaper. If just one is tired of trying to sell their car by owner maybe you have a deal. Hand out your business card to everyone you meet. Wear your uniform and name tag everywhere. Customers will ask you about vehicles while waiting in line at the movies. Give them a card and set up an appointment right there. Tell everyone what you do for a living and ask if they know anyone looking for a car.

Maintain an healthy lifestyle. This means both physically and mentally. Physically, you should exercise a few times a week. Exercise is as simple as taking the stairs or walking to lunch down the block instead of driving. Mentally stay sharp by doing product training or reading. Every morning should start with reading the news on line or in a paper. Get away from negative people and surround yourself with positive people.

Advertise yourself and your business. There may not be a lot of money to advertise but there are many free ways to get the word out about what you do. Send e-mails and ask that they be forwarded. Call old friends. Connect on Facebook. Write a blog. Whatever you decide you have to get the word out about what you do every day.

Measure your results. How will you know where you are going if you do not know where you have been. How many people did you meet today? How many prospect calls did you make? Did you miss a sale? Why? If you measure all of these things and more your skills will improve as you become more proficient in the way you approach your job. Remember to hone your good habits.

I can guarantee you that others in your business are sitting at their desks all day every day saying “this sucks. There are no customers. I can’t make a living doing this.” How hard will it be for you to compete against those people if you are doing all of the things mentioned above? Your day will fly by, customers will flock to you and you will sell more cars.

Wednesday, February 4, 2009

Tax Break for Buying a Car - A Great Idea

On Tuesday, February 3, 2009 the United States Senate overwhelmingly approved a broader stimulus package which includes help for consumers who want to buy a vehicle. The passage of the amendment would make interest and sales taxes deductible on federal income tax returns for vehicle purchases made this year. The National Automobile Dealers Association says that a consumer will save approximately $1,500 for a $25,000 vehicle.

The measure is clearly intended to jumpstart automobile sales. Why is that important to the overall economy? One only needs to look at the impact of automobile sales and the revenue generated for states and local economies from sales taxes. In Rapides Parish alone, sales of new and used vehicles (i.e. anything with a title) generated more than $29 million in sales tax revenue to the parish over the last three years. While the sales taxes would be deductible, the measure would not affect the amount of taxes collected by the state or the community. Instead, additional sales generated by the incentive of having the interest and sales taxes deducted for the year would spur more sales. More sales, of course, mean more revenue for the parish.

Take the dollar amounts collected in Rapides Parish and multiply that over Louisiana’s 64 parishes and the total impact of automobile sales on the state’s economy is readily apparent. Multiply that number again by the total number of counties and states across the United States and the revenue collected is staggering.

Rapides Parish alone saw a 10% drop in sales tax revenue from 2007 to 2008. Sales tax revenue is expected to decline even farther in 2009 because total vehicle sales in the state are expected to decrease dramatically from 2008 and even more drastically from 2007. Experts expect that nationwide sales will be at their lowest since 1981. In 2007, sales nationwide were north of 15 million. In 2008 they dropped to below 12 million. Every manufacturer and retailers has seen sales decrease. More than 1,200 franchised dealerships closed their doors in 2008 and the estimate for 2009 is even more dealerships will vanish.

The fall in sales, dealerships and employment in the automobile sector has a direct and proportional impact on states, parishes (counties) and local governments. Without automobile sales’ tax revenue governments are forced to cut services. Stimulating automobile sales directly places sales tax revenue into local government coffers which, in turn, allows them to hire employees and continue servicing its constituents.

In 2007 (the most recent year data was available) Louisiana automobile dealerships employed more than 18,000 workers with an annual payroll of $785 million. The average dealership employee earned $43,342 per year among the 337 new vehicle dealers. These numbers do not include non-franchised dealers, boat dealers, ATV dealers or non-franchised repair facilities. However, the tax incentive currently attached to the Senate bill will stimulate sales, increase tax revenue, allow employees currently employed by dealerships to keep their positions and drive the economy. Contact your local legislator and express your support of the Senate Bill so that it may be carried back into the House version when it is amended.

Monday, February 2, 2009

Secret Ballot

Many Americans would be surprised to know that the right to cast a secret ballot in a national election is not found in the Constitution. Instead it was a method adopted from the Australian system. All states now have provisions in their Constitutions allowing for secret ballots and as such it has become an important way for Americans to choose their federal, state and local leaders. If you ask any American, you are sure to get the refrain that a secret ballot “is the American way.” The purpose was initially adopted to ensure the voter casts a sincere choice by forestalling attempts to influence the voter by intimidation or bribery. Such has been the case since Grover Cleveland was the first American President to be elected by secret ballot in 1892.

Since that date the confidential ballot has been used in everything from voting for grade school student council members to organizing labor unions. The right has always been available to go behind a curtain and cast a vote without threats or intimidation. Fast forward a 100 years and small business community is faced with federal provisions that would allow unions to organize without the benefit of secret elections.

How is this possible? Look at the misnamed Employee Free Choice Act. The bill would amend the National Labor Relations Act to allow employees who work for small businesses (whose gross sales exceed $500,000) to organize a labor union without a secret election. Here is how it works. Currently, a union can be organized if 30% of the employees sign a statement requesting a union. Then a secret vote is held and it must pass by a 50% majority. The EFCA, originally co-sponsored by President Obama, would only require 50% of the employees to sign cards (“card check”) expressing an intent to be unionized and there is no need for a vote or a secret ballot. A retail business only needs to sell $500,000 in gross sales per year and there is no employee minimum number of employees to be affected. With these requirements, almost every car dealer in the nation would be subjected to these rules. A unionized shop would increase costs, restrain productivity, and imperil competitive advantages over non-union shops.

What makes this so important is that the same measure almost passed in 2007. The house passed the Card Check provision but it died in the Senate. With the senate majority solidly in favor of the democrats this issue is sure to rear its head again. Organized labor has seen their ranks decline steadily over the years and they see Card Check as a way to get businesses to organize that might not do so under a secret ballot. In fact, in speeches to labor groups President Obama has promised to push the card check measure.

The intent of the secret ballot in the 1890’s was to prevent intimidation and bribery and a secret ballot for union elections does just that. Imagine a scenario where a union organizer can present a worker with a card to form a union and the worker has no secret alternative to vote against it.

Historically, there was a time for the unions and there is no doubt that organized labor led a great revolution for workers rights. The problem in the automotive industry, especially the American Auto industry, is that the unions have essentially bankrupted the industry. Even as the big three were receiving bailout money before Christmas 2008, they paid hundreds of millions of dollars to retirees as year end bonuses (not current employees, but retirees). At the same time, they were all paying workers at their “job banks” where union members are paid not to work. Moreover, workers continue to receive full benefits with no deductible insurance, antiquated work hours, and pay plans that cannot be supported in today’s economy. Why not let the free market prevail? Instead of unions the competitive advantage should be decided by the laws of Charles Darwin. Good employees who work hard will earn a top wage because they generate that much revenue for the company. Those employees who do not produce will fall to the bottom and be asked to seek employment elsewhere. There should be no requirement that employers keep unproductive employees. If however, a group of employees wants to unionize then put the matter to a vote in the same manner we have been handling elections since the election of Grover Cleveland – the secret ballot.

Call you congressman and senator and urge them to vote AGAINST “card Check.”

Thursday, January 29, 2009

NADA in New Orleans

I just returned from New Orleans and the National Automobile Dealers Association’s national convention. Like most of the attendees the first thing that stuck out was the lack of people. This is usually a convention with tens of thousands of participants, vendors, and guests. Like all businesses, car dealers have been hit hard by the recession and conventions are simply not in the budget for most.

All, however, was not lost. Those who did attend were able to look through the vendor’s booths with ease and attend workshops that we all hope will help increase our business. I know that Walker Automotive sent four managers with great expense simply to give each manager an opportunity to bring one nugget of information back to the dealership that would increase the bottom line. The expense was justified if each of us attending was able to bring back a single idea that improved our business.

From my perspective, that one nugget was some perspective on advertising. Anyone who watches the car business knows that we spend considerable amounts of money on advertising. Imagine the cost of T.V., Radio, billboards and newspaper ads every week. Add on top of that the amounts we spend on yearbooks, youth basketball and soccer, stadium billboards at little league and you begin to get the picture. The traditional media has always been the way we advertised – until recently.

Sure, you still see Walker Automotive in those traditional places but you also see Walkerautomotive.com prominently displayed along with the traditional ads. And what was surprising about this year’s NADA convention was that not one single traditional media company was there vying for our business. With all of the billions of dollars car dealers, manufacturers and suppliers have paid over the years, the biggest traditional media outlets like Cox, Lamar, Gannett, Clear Channel Communications were all absent. NADA in New Orleans was the one place where they had the opportunity to re-engage the car dealers and sell us on the benefits of traditional advertising. So what did they do? As an industry they decided to boycott. Amazing and stupid all at the same time.

What it proves to me is that our decision to shift advertising dollars to the internet was the correct decision. Like most businesses, we started with a simple toe in the water approach and a basic web site. Over the years our approach is getting more sophisticated and we buy leads, optimization, and use search engine marketing. I, for one, have touted the cost benefits of online advertising over traditional media for a while. The cost is less, it is measurable, and it allows you to instantly contact the prospect. So what did NADA prove to me? That just as I have given up on traditional media, they too, have given up on me.

Thursday, January 15, 2009

As one of the biggest manufacturing and retailing sectors in the U.S. economy, the automobile industry is clearly a top choice for stimulus plans aimed at reviving the economy. Two of the proposals being considered:

1. Tax breaks for consumers who buy new vehicles and/or fuel-efficient hybrids. The desired incentives would be a combination of new incentives and extensions of credits already in the tax code. One proposal supported by Democratic Sen. Barbara Mikulski of Maryland and Republican Sen. Kit Bond of Missouri would permit new car buyers to deduct auto loan interest and sales tax on their personal income taxes.

2. “Cash for Clunkers”. This initiative encourages consumers to upgrade their older cars to cleaner, more fuel-efficient models. Drivers would get up to $4,500 in vouchers when they turn in an old fuel-innefficient vehicle for a vehicle that gets good gas mileage.
THE REAL COST OF ELECTRIC CARS

As the world watches oil prices rise and fall like a tidal surge and environmental groups continue to push for more green cars, the real cost of alternative fuel vehicles has to be examined. Obviously, the role of electric and hybrid vehicles will play an enormous role in reducing greenhouse gasses around the world. But industry and government has to ask how much will the conversion cost and is it worth it?

According to a study conducted by Boston Consulting Group, a management consulting firm, the fuel savings will not be enough incentive for consumers to switch to electric cars without some other incentive from the world’s governments. According to Boston Consulting, electric vehicles could conceivably make up a significant amount of the world’s fleet but not nearly a majority. According to Boston Consulting the costs of creating an automotive market dominated by electric cars are prohibitively high.

So what will cause a major shift? The most likely scenario is when oil prices rise over $150 per barrel and world governments mandate stricter standards. Experts estimate that about 3 million electric vehicles and 11 million hybrid vehicles will be sold globally in 2020. If that number is accurate, the alternative fuel vehicles would only make up about 28% of vehicles sold.

To support a market for that many electric vehicles, governments would be required to spend about $140 billion for industry support while reaping a relatively small $12 billion savings by switching to electric vehicles in Europe and the United States. Most of the industry support would be required to offset the high consumer cost of alternative vehicles. The fear is that the technology will be extremely expensive and without corresponding consumer support. Currently, the cost of a hybrid vehicle is about $7,000 more than its non-hybrid counterpart. While that amount is expected to decrease by 2020 it is still a hard sell for both dealers and consumers for the small amount of fuel savings. This hard sell is compounded by today’s relatively low fuel prices.

Tuesday, January 13, 2009

An article by USA Today on January 12, 2008 exposed the United States Army’s inability to control inventory. Like many business owners across the country that have an inventory, the Army has fallen into the trap of ordering too much, ordering things they don’t need or holding onto items that they cannot otherwise sell. According to the article, the Army has more than $3.6 billion in excess spare parts. Of that amount, the Army will never need some $900 million of the equipment that it has in storage. According to USA Today, the Army has “too little of the parts it needs and too much of others it doesn’t largely because it doesn’t set cost efficiency goals and has problems with the computer models it uses to forecast demand…”

The good news is that the business owner can learn from the mistakes of the Army. Any business that has an inventory also carries a debt load on that inventory. While the widgets sit on the shelf they are costing money. There is a price to purchase the item and a holding cost to have the item in inventory. As the item gets older, there is a risk of the part becoming obsolete. At that point, it is essentially worth zero because there is not market for it. The cost of a single obsolete part may not be significant, but the cumulative effect can be crippling.

Any business that carries an inventory needs to be accountable for proper inventory control. This means upholding a level of service that allows customers to purchase out of stock, avoids obsolescence, and generates a profit. To accomplish this, inventory managers need to be experts in inventory control, merchandising, pricing and profit. The good news is that a host of computer programs are available for every size business to automatically analyze inventory and alert the inventory manager when parts should be reordered to allow for a “just in time delivery.” This task is made even easier with the availability of overnight shipping.
Most inventory managers struggle in 5 crucial areas.:

1. Obsolete parts: Managers want to retain obsolete parts that cannot be sold in hopes of the sucker who walks in one day for that exact part. Don’t wait. It is a hard pill to swallow, but if the part is obsolete take the loss and sell it on e-bay, at a garage sale, to a junk shop or simply throw it in the trash and take the tax write-off. Continuing to hold the part only takes up space and costs more money;

2. Wrong Product Mix: Know your customers and what they are ordering. Have the correct product mix in your inventory for ultimate profitability;

3. Excess Stock: Don’t order too much just because you think you will sell more. Look at the selling history or “demand” for that part and order according to the demand history;

4. Poor marketing and merchandising: Every retailer has to market their product. Do so by whatever means possible. In the age of the internet, e-mail and blogs, guerilla marketing is a snap;

5. Poor use of compute information. Trust your technology. If you have a compute inventory manager and the parameters are correct then trust the information it is giving you.

Proper inventory control is crucial because obsolescence is one of those items that can creep up on the uninformed. Letting inventory get out of hand is a sure way to financial ruin. To avoid a listing in the bankruptcy filings, watch your inventory and your manager. This is the only way to insure that you do not fall into the same trap as the Army.
There is a new target for auto thieves and it can cost you thousands of dollars without your car even being stolen. What is the new hot item to steal? Catalytic Converters. A catalytic converter is used to reduce the toxicity emissions from your motor. Why are these hot items? First, they contain three precious metals: platinum, rhodium, and palladium. As of October 2008, platinum was selling for $1,019 per ounce. This is a nice payday for a thief who can crawl under a car undetected and steal the device in less than two minutes. The thieves then sell the converters to recyclers for $20 - $200 per converter depending on the type and amount of metal used.

Thieves are targeting victims by staking out large parking lots and working in teams. The thieves are able to slip under vehicles and cut out the converters with battery operated tools in a matter of minutes. Targeted vehicles are usually trucks or SUVs since they are easy to crawl under. The average insurance claim for this type of theft ranges between $2,500 - $3,500 per vehicle. Consumers can protect themselves from this type of theft by parking in well lit areas with a lot of pedestrian traffic.

Thursday, January 8, 2009

TIRE TIPS

Tire inflation is the single most important, and most often overlooked, part of automotive care. Operating a vehicle with just one tire underinflated by 20% (about 8psi) can reduce the tire’s life by 9,300 miles and can increase fuel consumption by 4%. Owners should check tire inflation at least one time per month and periodically review their vehicle’s computer based system for tire pressure readings.

The tire pressure monitoring system which is standard equipment on all 2008 or newer GM models, uses a direct measuring sensor in each wheel. A warning is displayed to the driver whenever pressure drops below 75% of the recommended pressure. Weather can affect the reading because of the temperature changes that occur in the tire when the temperature increases during the day.

In Louisiana, weather typically rises substantially during the day in winter. This can cause the tire pressure monitor to alert the driver. All that may be necessary is the addition of a minimal amount of air into the tire. Additionally, customers who have tires replaced or rotated at non-GM dealership facilities may experience problems with the monitor after the change or rotation. This is because non-GM repair facilities either do not have the equipment to reset the monitor or are unfamiliar with the monitor’s operation and repair. If the vehicle is brought to the dealer because another facility was unable to reset the tire monitor or the malfunction is cause by another repair facility there may be a small charge for the reset.

For best results, have all maintenance done by the factory trained technicians at the GM dealership. Important information to know is that when the tire pressure light remains solid to indicate low pressure then air needs to be added. If, however, the light blinks for about a minute and a service tire monitor message displays, then there is a malfunction in the sensing equipment. At that time, a review and possible repair by your GM trained technician might be necessary.

Wednesday, January 7, 2009

2008 IN Review

What happened to the U.S. automotive industry this year? The “Big 3” does not build undesirable cars. They still outsell everyone else in the market with more than 8 million sales last year. Their customer loyalty is unparalleled and according to J.D. Power and Associates, the Big 3 builds some of the most dependable vehicles on the road – better than Toyota, Lexus, Infiniti and Volvo. Further, in an apples-to-apples comparison, American manufacturers match or beat their competitors in fuel economy on models with the same footprint and powertrain.

Every manufacturer is hurting in this economy. Sales in every car and light truck segment are down compared to last year. Country of origin had no influence. Vehicles from the U.S., Japan, Europe and North Korea all fell 32-38% in November. Both cars (-36.5%) and trucks (-36.8%) fell. The Honda Civic fell 66%, Toyota Carolla 59%, and the Ford Focus 74%. So what happened?

A combination of high oil prices, the banking/mortgage debacle, and a slowing economy worldwide all contributed to the cause. In late spring, oil prices rose to unprecedented levels. In June, prices per barrel were at $145 with speculation that prices could rise to $200 a barrel. Consumers shifted to small cars and values of trucks and SUV’s plummeted. Because of the falling values, auto lenders took a bath on leases when residual values fell on the vehicles they were taking on lease returns. For instance, an SUV may have had a residual value of $20,000 but when it was turned in the market price was only $12,000. The finance company had to absorb the $8,000 loss. This loss was absorbed along with all of the home mortgage losses in their portfolios. The result was that auto lenders quit leasing, essentially cutting off low payment options to millions of buyers.

In the beginning of the third quarter, banks tightened credit standards essentially denying credit to millions of consumers. Most car buyers need credit to purchase a vehicle. Without financing options available to the majority of buyers retail sales fell. When credit is available rates are unfavorable compared to the glory days of 0%. Add to this the negative press surrounding the economy and the Big 3 and consumer confidence started to fall. That lack of confidence translated directly into the showrooms of all manufacturers.

The Big 3 CEO’s, unions and the federal government all share the blame for the sector’s woes. Without giving any one of them a pass, it is hard to image that any companie's business model could have predicted this perfect storm. Where the industry ends up is now in the hands of the congress. However, one thing is for sure – the loss of any one of the American manufacturers will reverberate throughout the economy to suppliers, consumers, charities, municipalities and more in the form of lost jobs, revenues, charitable contributions and sales tax revenue.


Do you ever wonder how your credit score is calculated? Your credit score or FICO is a three digit number designed to gauge your creditworthiness. Lenders use this number to determine if an individual is worthy or receiving credit and, if so, at what interest rate. The FICO score can affect your ability to borrow money for everything including home mortgages, credit cards and auto loans. The score ranges from 300 to 850 and is calculated by Fair Isaac Corporation. Fair Issac is a NYSE listed company that collects information from the three leading credit agencies, Equifax, Inc. Experian, PLC, and TransUnion, and analyzes the numbers to include in the credit score.
According to Fair Isaac, a credit score is made up of of five components:

  • 35% reflects payment history, i.e. whether you pay your bills on time to one of the lenders that reports to the credit reporting agencies;
  • 30% reflects amounts owed and how credit limits compare with balances owed. The more you carry, the lower the score;
  • 15% reflects length of credit history: The longer the history, the better credit lenders can gauge your ability to pay them back;
  • 10% reflects new credit – how many accounts you opened recently;
  • 10% reflects credit mix – credit cards, student loans, medical etc.

You cannot get your credit score free but you can get a credit report for free one time a year from each of the reporting agencies. A free report can be obtained from annualcreditreport.com. Wall Street Journal, December 31, 2008