Web office becomes new path to top job
Young tech-savvy talent directs digital sales surge
Chaz Gilmore, the 33-year-old general manager of Grapevine (Texas) Ford-Lincoln, remembers vividly the day his path to management opened at Van Tuyl Group.
In 2007, Larry Van Tuyl, now the group's co-CEO, told a meeting of general sales managers that the dealership group would increasingly draw general managers from the ranks of managers who led Internet departments rather than new- and used-vehicle sales departments.
"I figured right then that I was going to get my shot," says Gilmore. He was then a used-car director but was more innately comfortable with online technology than some of his older colleagues and smoothly transitioned to the Internet department.
Gilmore, along with a large number of Automotive News' group of 40 Under 40, became a champion of online sales and marketing at his company. In doing so, he and his peers have helped to lead their dealerships and dealership groups into an evolving era of automotive marketing -- and boosted their careers at the same time.
Indeed, in achieving general manager status and an ownership stake in the store before the age of 40, Gilmore beat long odds.
Just 17 percent of general managers or dealer principals in the industry are younger than 40, according to the 2012 NADA Dealership Workforce Study conducted by the National Automobile Dealers Association in partnership with DeltaTrends.
In fact, the median age of a store general manager and dealer principal was 52 in 2011, when the data were collected, said DeltaTrends President Ted Kraybill.
The advanced age of automotive leadership is creating generational friction, said Mark Rikess, CEO of Rikess Group and frequent trainer on making stores more attractive to young car buyers and employees.
Millennials such as Gilmore, those born approximately from 1980 to 1998, depending on who's doing the counting, make up an increasing share of the car-buying public. Rikess said they buy 20 percent of U.S. vehicles annually and do the bulk of the research on another 20 percent of vehicles bought by parents or relatives.
Generally, they don't like to haggle. And they expect price information to be shared transparently over the Internet or smartphone -- an expectation that rankles many of the old-schoolers who dominate management in dealerships, Rikess said.
"We have a tech divide," he said.
Kraybill said the prevailing automotive culture also is toxic to many young job seekers. The annualized turnover rate for millennials in sales and finance and insurance, whether managers or salespeople, is 82 percent, he said. That compares with 59 percent for Gen X employees and 46 percent for baby boomers.
Millennials value their free time, causing a clash with traditional managers who expect employees to be at work from bell to bell, meaning from when the store opens until it closes, however late at night.
The cutthroat competition for shoppers also collides with young workers imbued with the spirit of teamwork and used to playing sports in which "scores weren't kept," Kraybill said.
Then there are the skeptical parents, he said, who are determined to see that the college tuition paid for their progeny isn't spent on careers in automotive retailing.
Gilmore said he is grateful for the opportunity provided by Van Tuyl Group to make him a partner and general manager in 2009.
He said he's using an aggressive Internet sales strategy combined with the latest vehicle pricing technologies to offer "close to a one-price" policy at Grapevine Ford-Lincoln.
Fully 70 percent of the 3,000 vehicles sold annually come from Internet leads coming through the dealership's Web site or third-party online shopping sites that include a tracking phone number when that medium is used, he said.
The $500,000 he spends annually for digital advertising, half of his total ad budget, keeps the 19 salespeople in his Internet sales department hopping, he said.
It's so busy, he said, that the route to promotion is from the showroom floor to the Internet department. That's the reverse of the traditional path in most dealerships. He has a total of 50 salespeople.
"They graduate from the floor to the Internet department to management," Gilmore said.
Younger managers can gently nudge their bosses into the Internet Age and begin to change the public perception of dealerships, said Craig Waikem, the manager of the business development center of family-owned Waikem Auto Group in Massillon, Ohio.
When Waikem, now 28, wanted to build the group's Internet department a number of years ago, he met with some resistance from his dad and uncles who own the seven-franchise group.
He said they agreed to more resources after he reminded them that one uncle had bought a boat online and the others fishing equipment and various gear. The question was, why wouldn't people want to shop for cars online? "People are afraid of what they don't know," he said.
Waikem said 10 of the 13 employees in the business development center are younger than 28. The atmosphere is busy but relaxed.
Every Friday is a music Friday, in which BDC employees take turns hooking up their own iTunes libraries to the office speakers, he said. And if the team hits its monthly sales goals, the group is rewarded with casual clothes days, dinners or day trips. "We want people happy to come to work," he said.
Jason Mosley, general manager of AutoNation Ford Katy (Texas) since 2010, is changing the culture at his store via the Internet department as well.
He said he turned around operations by replacing all the employees in his underperforming Internet department with top sales producers from the showroom floor.
"A lot of people are afraid to take those guys off the floor," Mosley said. "But with 90 percent of traffic and phone calls coming through e-commerce, to me, that was crucial."
Rick Case, CEO of Rick Case Automotive Group, is so concerned about having the right culture inside his 15 stores that he won't hire salespeople who have worked at other dealerships.
Case, 70, who opened his first used-car lot when he was 19, said the company wants high-energy, outgoing employees who are interested in a career inside the group. The company's recruiting motto is "Put your career in high gear."
The group screens prospective employees with personality and intelligence tests, Case said. Then they are closely monitored by store management and human resources to ensure that they are meeting goals and are on a track to fulfill their individual potential.
That includes management. The average age of general managers at Case's stores is 44. His daughter, Raquel Case, 29, is general manager of Rick Case Fiat in Davie, Fla.
"We're looking for leaders of the future, and that could be in six months' time," Case said.
He said his stores offer flexible hours -- a policy that appeals to younger and older employees alike. His stores are open seven days a week, but an employee can work 40 hours a week because the work day is divided into shifts.
"We mention our flexible schedules in our recruiting message," he said.
Gilmore of Grapevine Ford said the 72-store Van Tuyl Group is encouraging change. At every quarterly meeting of partners called by the group since 2009, Gilmore has given a report on Internet practices at his store, he said.
Waikem said the key is discerning how fast leadership can change.
He said he'd love to follow Google's lead and that of other companies by equipping the store with table tennis and Xbox video games for employee leisure. But he concedes, "That might be pushing it a little too far."
Bradford Wernle, Ryan Beene, Amy Wilson and Jamie LaReau contributed to this report-- David Barkholz