Former Toyota exec Illingworth learns retail is up-close, personal, fast
It's a long way from Toyota's U.S. sales headquarters in Torrance, Calif., hard by the frantic 405 freeway, to the gentle farm country of northern Indiana.
But that's the path Dave Illingworth took in 2008 after wrapping up 30 years in Torrance that included several prominent executive jobs.
Like a lot of other car company honchos, Illingworth wanted to become a dealer. So in the thick of the recession he opened Toyota of Warsaw, a new store in Warsaw, Ind., population 13,500.
"Most people from the factory side confess that they'd like to give retail a try," says Illingworth, 68. "I thought I could probably do it, but it's a lot harder than it looks."
In Torrance, Illingworth was a star. He was the first general manager of Lexus, getting the luxury brand off to a roaring start after its 1989 debut. Automobile magazine even named him "man of the year" in 1992.
Then he ran Toyota Division during the go-go '90s and later was Toyota Motor Sales' chief planning and administrative officer.
But if you really want "go-go," try operating a dealership in a sleepy town in Amish Country. Illingworth says the biggest difference between working at headquarters and running a store is the speed with which things happen.
He says working for Toyota is "like trying to turn an ocean liner," compared with the speed of events on the showroom floor.
"A dealer needs to make changes and decisions quickly," he says. "He doesn't have the luxury of waiting. At the factory, there is no decision made without meeting after meeting after meeting. At a dealership, you decide right then and there. It's much cooler not having to check with everybody else."
That's not exactly news to dealers, but it was a revelation to Illingworth after his time at Toyota.
Toyota had previously studied opening a point in Warsaw but shelved the idea. Just as Illingworth was contemplating retirement, an open point was declared.
It is farm country, but Warsaw also is home to orthopedic giants Zimmer and Biomet and a collection of light manufacturing businesses. The nearest Toyota dealerships -- in South Bend and Fort Wayne -- are about an hour away.
When Illingworth chose the town, he wasn't throwing a dart at a map. He grew up in Wheeling, W.Va., but has vacationed at Winona Lake near Warsaw since he was a child.
But to convince Toyota that he was ready to run a dealership, Illingworth needed partners who were retail veterans. Enter Dan and John Rice, brothers and longtime owners of the Ford-Lincoln store in Warsaw.
Illingworth was introduced to the pair by Craig Whetter, an executive at David Wilson Auto Group in Southern California, who knew the Rices from their days at Northwood University.
"We were neighbors from [Illingworth's] summer home but had never met," John Rice says. "We had probably passed each other on the road from Winona Lake for years and years and didn't even know it."
Illingworth is the dealer principal, but the Rices have provided a vast store of knowledge for the rookie dealer.
"Given the last three years, if I hadn't had [the Rices], I would have been in serious trouble," Illingworth says. "They know the local papers and radio, the representatives, who has a good reputation as a hire. They know their way around people, the industry and the market, to keep me from making mistakes that I wouldn't have known I was making."
A different take
Illingworth developed new perspectives on an industry he had been part of for three decades.
"As a manufacturer's rep, I talked all the time about customer service. As a dealer, it's much harder to do," Illingworth says.
"There's a certain percentage of customers you just can't satisfy. I had to learn how to say, 'No,' to a customer."
He says he also has learned something about the psychology of the showroom floor.
"People are very aware of how sales and service are doing," Illingworth says. "When things aren't going well, they tighten up. You feel that at the dealership right away. When you are working at the factory, you don't see the impact that has on people."
Illingworth also feels the pain when he spots a new Toyota in Warsaw with dealer plates from Fort Wayne or South Bend.
"It hurts. It's personal. It bothers you," he says. "You're asking yourself, 'Why did they go an hour away to buy a car?'"
And even though he was a hands-on executive in Torrance, he has figured out that "you can't do everybody's job.
"You need to know when to intervene," he says. "But you try not to overmanage and get into the day-to-day. You have to let the general manger run the store, let the sales manager do his job, just as long as they do it the way you want it to be done."
Much of Illingworth's job involves schmoozing with local luminaries at the Rotary and Optimist clubs, but he spends at least four hours a day at the dealership.
Toyota of Warsaw sells 25 to 30 new vehicles a month -- "right where we thought we would be," Illingworth says. "We're profitable. We could do better, but we've been through three tough years and done OK."
He says opening the dealership in the midst of a recession was actually a blessing.
"People say our timing was horrible, but it was excellent," he says. "We didn't go in fat, dumb and happy. We knew to watch expenses, that there was a problem. We learned how to run a tight ship and how to be competitive. We didn't have to make a lot of cuts because we started correctly."
And Illingworth is happy that Toyota helped when things got really tough.
"Our groundbreaking was before the economy became unglued," he says. "But Toyota was not insensitive to what we were facing."
Toyota helped him figure out how to control costs -- for example, allowing him to avoid some of the expensive store elements that were originally planned for the dealership.
Still, Illingworth says, he has learned a few things about the relationship between factory and dealership. In particular, he says, one-size-fits-all factory programs don't work for everyone. They tend to benefit 80 percent of dealers but sting the other 20 percent, he says.
For instance, Toyota is pushing Internet marketing, but Illingworth's rural market is one of those enclaves where newspaper advertising works best.
"The manufacturer is dealing with big-city dealers who are moving more toward digital, but I'm dragging my feet," he says. "If they get too far ahead of me, that's going to hurt me, so I can't fall too far behind. But if don't spend enough on newspaper, that will hurt me, too."
Illingworth is still well-connected in California but is never tempted to pull rank on a young regional rep by picking up the phone and calling bigwig Toyota pals such as Jim Lentz and Bob Carter to get dealer justice.
"You can't violate the chain of command," he says. "I work with the district manager because that's the chain. If you violate that, you're not going to get along with anybody."
So which career has been more fun for Illingworth? Being a dealer, hands down.
"At the end of every month, you can see we nailed it," he says. "When you have a month where sales, service and parts all function properly, it's a great feeling of personal satisfaction. At national, you meet sales objectives, but you don't get the feeling that you really did it. This is a great feeling."
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