Finding Business Wisdom

CEOs of large corporations get a lot of play in the business press. People like Jack Welch, former head of General Electric, have become iconic; others like Ken Lay or Bernie Ebbers infamous. Most recently, the CEOs of the automobile manufacturers have been in the news trying to save their companies. Based on this interview with an unknown car dealer named Jack Fitzgerald, Congress (since we now own GM) would be well advised to listen to people with better knowledge of the business.

Fitzgerald owns 5 Chrysler dealerships and notes the commandment that "thou shalt never dis the manufacturer" but plows right into doing just that. You will learn more about the industry in his 5 minutes than most full-length articles. Here are some of his gems:

• Dealerships are not overhead to the car companies -- the dealerships are independently owned (usually based on personal borrowings of the dealer owner). Even without selling any cars, the manufacturer makes money on the dealership just through fees.
• There are in the neighborhood of 100 million GM and Chrysler cars on the road. While new car sales are down and killing the company, there are still a lot of used cars sold. Dealerships are still the ones to service them. There are more cars on the road today (150 million), not less.
• When Fitzgerald bought his first Chrysler dealership, 23% of the recommended cars by Consumer Reports were Chrysler. Today it is 6%. The number for GM: 44% and 8%, respectively. Fitzgerald rolls these numbers out without notes or thought -- he simply knows them.
• His prescription for the business: We have 100 million cars out there and we need to take care of them and have something of quality to offer them for a new car.

I will bet that President Obama has no one on his staff as smart about the automobile business as Jack Fitzgerald. The more credentialed suspects likely to congregate in government circles might want to listen to Mr. Fitzgerald.