MARK RECHTIN

No softballs at the Power roundtable

Automotive News | February 8, 2013 - 11:36 am EST

ORLANDO -- Most Q&A sessions at industry conferences are loaded with softballs, easy questions lobbed for the on-stage executive speaker to knock out of the park.

But making AutoNation CEO Mike Jackson the grand inquisitor -- especially when his target is Honda exec John Mendel -- changes the scenario in a big way. There are no sacred cows when Jackson is running the show.

At the J.D. Power Automotive Industry Roundtable here, Jackson confronted Mendel on the subject of stair-step incentives. Honda has been relatively frugal in customer-cash incentives, but has frequently used volume-based stair-step dealer incentives to push end-of-cycle vehicles out of the door.

Prefacing his question by calling stair-step "arbitrary and capricious," Jackson described the incentive as "Three-Card Monte on 42nd Street … and the retailer looks like the fool."

Jackson then asked why Honda continues to use such tactics that pit Honda dealer against Honda dealer.

"Because they work," Mendel replied, bluntly.

Of course, Mendel quickly modified his comments, saying he hates any objective-based incentive program and doesn't want to use them. He capped his response by comparing stair-step to heroin, a habit the industry needs to break.

Jackson leapt on the metaphor: "The addict says, 'I love my heroin dealer,' and then you die."

The roundtable audience of nearly 500 attendees, composed largely of dealers, broke into applause. Score one for Jackson.

Mark Rechtin is West Coast editor of Automotive News.Mark Rechtin is West Coast editor of Automotive News.

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