Selling Cars in a Small Town
By Cliff Banks Ward's Dealer Business, Sep 1, 2006 12:00 PM

MANITOWOC, WI — General Motors dealer and community activist Bob Pietroske is heading to a familiar spot, city hall, for a photo shoot of him as Ward's 2006 Dealer of the Year.

“Maybe they'll think I'm running for mayor,” he laughs. “Better they're talking about me than someone else.”

Ironically, Pietroske used to own the land on which the city hall is built. He sold it to the city in 1990, prior to moving to a new facility.

Just a few months ago, Pietroske galvanized local business leaders to convince Manitowoc's city council to stop a 28% storm water fee it was planning to levy on the city's citizens.

Pietroske says he learned of the impending council vote on a Friday afternoon. The vote was scheduled for the following Monday night.

By 9:30 a.m. Monday, 32 business leaders gathered in Pietroske's dealership to strategize on how to get the city council to delay the vote. They were successful, and within several months the measure was dead.

That's one example of the effect Pietroske has had on his community through the years as a car dealer and citizen.

Pietroske is a mainstay in this community with a population of 70,000. For 29 years, he has owned a number of dealerships in the area. He since has cut back to one store, Pietroske Inc., selling Buick, Cadillac, Chevrolet, Chevrolet medium truck, GMC and Pontiac brands.

“That's all I want,” he says.

There are two other dealerships in Manitowoc, a Ford and Lincoln Mercury store, and a Chrysler dealership, formerly owned by Pietroske and now owned by a former service manager of his. There are no import stores in town.

For the most part, Pietroske stays out of local politics because he does not want to give people a reason not to buy from his dealership. Instead, much of his community involvement focuses on charities.

But this one time he felt he had to do something. “It would have hurt a lot of senior citizens,” Pietroske says.

He and his wife of 10 years, Liz, donate about $170,000 a year, a hefty sum for a dealer in a small town.

While Manitowoc was facing severe economic times, Pietroske managed without pay the Inn on Maritme Bay, a long-time instituion in the city to help it survive.

He also is an active member of the Manitowoc Chamber of Commerce and has provided support to both the U.S. and Wisconsin Jaycees.

Last year, Pietroske, along with Koenig & Vits, led a community-wide effort in collecting supplies and food for Hurricane Katrina victims.

Within 48 hours of the disaster, seven semis were filled and on their way from Manitowoc to Louisiana.

For 40 years, Pietroske has been involved with the Travelers Protection Assn., a group that provides aid for the deaf or near deaf. The TPA has raised more than $14 million for the organization. Pietroske and his wife have established seven scholarship funds for the deaf.

During his tenure as national president of the group, Pietroske added 200 new members.

He always has been sensitive to the disabled, not being able to walk until he was six years old because of polio. Also, when Pietroske began working at a dealership while in school, nine deaf employees were on staff and he wanted to help them.

His dealership years ago was among the first in the nation to start a child protection-seat awareness program, which GM has since emulated.

Pietroske participates in the Wisconsin Automobile and Truck Dealers Assn. and this year is the group's secretary-treasurer. In 2007, he will be president-elect and president the following year. He was the Wisconsin Dealer of the Year in 2005 and the Time magazine Quality Dealer nominee in 2006.

It is a critical time in Wisconsin for car dealers, he says. The majority of domestic dealers are losing money, and there is a danger many could be out of business in the next few years.

At 63, Pietroske is solid, unassuming, compassionate and stubborn.

He calls himself a “local boy,” having grown up in Manitowoc, a small farming and tourist community situated on Lake Michigan about 30 miles south of Green Bay.

“This is a great place to live,” he says, although he grumbles about the state's high taxes. “We're sixth in the country when it comes to taxes.”

Pietroske started washing cars in 1962 at Hamachek, a local dealership, while attending a technical college, partly to get out of working at his father's dairy farm because, he says, “I thought it was too many hours.”

Ironically, he says he has worked about 16 hours a day for the last 43 years.

Pietroske fell in love with the car business and wanted to own a dealership. At age 32 he was sure he was going to get it.

For 13 years he had worked his way up at Hamachek, getting experience in each of the dealership's departments. It was his time.

The owner was looking to get out and had promised to sell to Pietroske. Unfortunately, executives at General Motors Corp. had other ideas and instead brought in an outsider to buy the store.

Two years later, in 1977, another dealership in Chilton, WI, a few miles away, became available. Pietroske jumped at the opportunity.

Within a couple of months, he was grabbing market share. In one month, Pietroske sold 170 new GM cars and trucks in Chilton, a town of only 3,000 people.

Ten months after buying the Chilton store, GM approached Pietroske about buying the store he originally wanted. The auto maker's first choice wasn't working out as the dealer principal.

The owner did not go gracefully. On the afternoon of his last day, he fired the entire staff before the deal was signed.

At 1:30 a.m., after several hours of negotiations, Pietroske had his Manitowoc dealership. He instructed his service manager to begin calling the staff to report back to work in the morning.

Meanwhile, the departing owner had the bank open at 9 p.m., to get cash for the deal and promptly moved to Kansas City.

It is that stubbornness and ability to accomplish the impossible that Dale Kocourek, Pietroske's longtime general manager and vice president, points to when asked to describe his boss.

“Bob always has some type of goal in mind, that often is out of reach,” he says. “But he always seems to get things done.”

That Pietroske sells both GMC and Chevrolet under one roof may raise eyebrows. Both brands sell trucks, and typically GM likes to keep them apart so they do not cannibalize sales.

“He was always talking about having Chevy and GMC together,” Kocourek says. “But I knew how GM does things and thought, ‘That will never happen.’”

But it did. “Somehow he convinced GM that is was the right thing to do for the customer,” Kocourek says.

The current location also is a miracle of sorts. Pietroske dreamt of having a new building with white pillars.

The former facilities (where city hall is now) were poor and cramped. Kocourek says he knew what the costs for a new building would be and doubted it was feasible.

But in 1991, the move was completed. “It probably is the most memorable event I've had in the business,” Pietroske says. However, the pillars are beige, not white.

The dealership closed its doors at 5:30 p.m. on a Wednesday before Thanksgiving. It opened the following Monday at 6:30 a.m. and tripled its sales the first day.

“I believe in location, location, location,” Pietroske says. GM helped with a site survey and determined that a busy intersection six blocks off Interstate 43 was best.

GM also helped redesign an existing building to what was at the time flagship Buick standards, including a large dome on the roof. “We were able to save $1.5 million using an existing building,” Pietroske says.

While there are challenges today, nothing compares with 1979, when Pietroske had to lay off 50 employees including Kocourek. The store went from 69 employees to 19.

“We had to do it to stay alive,” Pietroske says. Unemployment was near 11%, and the economy was in trouble.

“I told the employees that we were going to be in business and be profitable,” Pietroske says. “Six weeks later, I was able to call many of them back. The store is much stronger today. We're managing the entire business.”

Service, despite a 50% drop in warranty work, is as strong as ever. It helps to have Dave Kubsh, a technician who has been at the dealership for 22 years, and is one of the top GM technicians in the country, Pietroske says.

The dealership also entered the tire business last October, and in that first month sold $30,000 worth of tires.

There is little overhead, just the racks, inventory and training, says Pietroske.

Additionally, the dealership is beginning to leverage technology to help drive sales. It recently signed with Reynolds and Reynolds Co. to update its website and soon will start e-mail marketing.

The store sells an average of 15 units a month on the Internet. “We sell cars in Michigan using the Internet, “Pietroske says. “We stick them on the Badger,” (a ferry that crosses Lake Michigan between Manitowoc and Ludington, MI).

“We couldn't exist without technology today,” he says. “For one, it has helped us cut down on paper records, leaving space for other things.”

Kocourek says Pietroske is not the type of boss to walk onto the showroom floor and wonder why the staff didn't sell six cars that day.

“He understands what the market is doing and is realistic,” he says.

Still, Pietroske sets the bar high, demanding 100% customer satisfaction. The best the dealership has done is 98.2%.

“The problem is that it is up and down,” he says. “High customer satisfaction comes if you take care of the customer. You have to treat them as a house guest.”

Getting there requires lots of training, Pietroske says. “We send our employees to school often, getting them out of the store and away from what's going here,” he says. “We also train every week — hands on, all the time.”

The dealership takes bits and pieces from various sales trainers but has developed its own system for selling cars.

Having a consistent sales philosophy helps retain employees, Kocourek says, who has worked with Pietroske for 28 years.

“Longevity in your employees is what will keep you successful,” he says.

It also helps keep customers coming back because they know they'll be treated a certain way.

Kocourek mentions a Chevrolet dealer from a large nearby city that came to the area a few years ago with visions of dominating the market.

“They had a big-city mentality,” he says. “But within a couple of years they had burned through their customers. They didn't last long.”

“Being a car dealer is real important, especially in a smaller community,” Pietroske says. “You're in the public eye all the time.”

“I'm Truly a Buick Man”

Bob Pietroske's first car was a Chevrolet Bel Air (he bought it used with 2,000 miles from a private party), but Ward's Dealer of the Year prefers Buicks.

“I'm truly a Buick man,” he says as he drives a red Lucerne while giving a tour of his hometown of Manitowoc, WI.

Asked if Buick will survive, Pietroske says, “Sure, they will.”

He strayed from GM once in his career, buying a Chrysler dealership. A few years later, he sold it to his service manager. Other than that, he has been a GM dealer and car owner.

In 1985, Pietroske won a new vehicle with a couple of $1 raffle tickets he bought while in Jackson, MI, attending a NASCAR race. Faced with a choice between a Ford or a Chevrolet Cavalier, he opted for the Cavalier.

His favorite Buick? The old Skylark convertibles, especially red ones with white tops.

“Fun on the Showroom Floor”

Bob Pietroske sold his first car (a green Buick Skylark convertible with tan interior) to Jerry Rav, a local school teacher. Pietroske figures he has sold almost 30 cars to Rav's family since then.

Being in a small town, much of Pietroske's business is repeat customers. “We rarely will lose a customer,” he says.

As a salesman in his late 20s for Hamachek Dealership in Manitowoc, WI, Pietroske accounted for 90% of the store's Cadillac sales.

“I still love the selling experience,” he says. “And I have a lot of fun on the showroom floor. I enjoy helping people buy what they want.”

Here Are Previous Ward's Dealers of the Year

Bert Boeckmann, 2001
Galpin Motors Inc.
North Hills, CA

Bert Boeckmann was Ward's first Dealer of the Year, and arguably could receive the honor every year. Retired Ford Motor Co. Vice President James O'Connor said in 2001 that Boeckmann is the best dealer he ever met. For 15 consecutive years, his Galpin Ford store has been the No. 1 Ford dealer in the world. Boeckmann's Saturn and Jaguar dealerships also are consistently number one in the nation year after year.

Other brands include Lincoln-Mercury, Volvo, Aston Martin, Mazda and Honda, added this year.

Jerry Reynolds, 2002
Prestige Ford
Garland, TX

As the only Ford Dealer Council chairman to serve for two years, Jerry Reynolds helped soften the pain for Ford dealers during the Firestone tire debacle and Ford's controversial Blue Oval certification program. He also is one of the founders of FordDirect, a successful OEM-dealer online partnership.

Reynolds exited the business earlier this year, mainly because of the difficult conditions facing Ford dealers today.

Herb Chambers, 2003
The Herb Chambers Cos.
Somerville, MA

Herb Chambers entered the business in 1985 when he walked into a small Cadillac store to buy a car. The experience frustrated him so much, he not only bought the car, but he bought the dealership, vowing he could run it better.

Today, his 23 dealerships are a New England powerhouse, selling more than 43,000 vehicles and generating more than $1.3 billion in revenue.

Lloyd Chavez, 2004
Burt Automotive Network
Denver, CO

Lloyd Chavez, has been an automotive mainstay in Denver, CO, market for more than 55 years. His son, Lloyd Chavez Jr. and son-in-law Hank Held now manage the firm's eight dealerships.

The Burt Automotive Network consistently ranks in the top 15 on the Ward's Megadealer 100 list. It is one of the top fleet dealers in the U.S.

Chavez's real estate strategy should keep the group strong for years to come. Years ago, Chavez acquired land in Jewel and Parker, two areas outside of Denver that have the strongest water access. The two land tracts are the only areas zoned for dealerships, meaning anyone wanting to build one there has to go through Chavez.

Shau-wai Lam, 2005
DCH Automotive Group
South Amboy, NJ

Shau-wai Lam is a Chinese immigrant who helped turn his father's import business into one of the largest dealer groups in the country.

The New Jersey-based group has 35 dealerships located in New York, New Jersey and California and generates approximately $1.6 billion in annual revenue.

Lam commands the respect of his peers and has built the company with a laser-like focus on doing business with integrity and teamwork.

Sometimes the Customer Is Wrong

For the employees at Pietroske Inc., a dealership in Manitowoc, WI, selling several General Motors Corp. brands, taking care of customers does not always mean playing the part of the patsy, giving in to them.

Unhappy customers sometimes come into the dealership wanting to talk with owner Bob Pietroske, Ward's Dealer of the Year. He will often sit in his office and listen to the complaint, then he will bring in the appropriate department manager and try to come to a reasonable conclusion.

Sometimes, though, making the customer happy is impossible.

Vice president and General Manager Dale Kocourek recounts how a man wanted his air conditioning fixed for free. The repair estimate was for $600. He purchased the Oldsmobile Bravada from Pietroske in June 2001. It was now 2006 and the vehicle had 48,000 miles on it.

The problem was the vehicle was two years and 25,000 miles out of warranty. And the vehicle had been in for service for only one oil change, four years ago.

Pietroske listened for a while, but in the end did not give into the customer.

“There was no way we could justify that to GM,” Kocourek says. “Now if that customer had brought the vehicle in consistently for service during those four years, we could have made a case for fixing the air conditioning and charging it to warranty.”

The customer may have left unhappy, but the upside? “I bet he'll bring his next vehicle in for service to us,” Kocourek says.

Selling Cars in Small Towns Has Its Ups and Downs

In his best years, Wisconsin dealer Bob Pietroske has sold as many as 3,000 vehicles. But the economy has forced many large businesses out of Manitowoc. Now, the store is selling 1,200-1,400 units annually. The ratio is two-to-one used cars to new.

“The factory has made us new-car distributors since last July (when the employee pricing strategies were implemented),” Pietroske says. “We're basically used-car dealers now.” Still, the store rates first among dealers with the same brands in his zone.

He believes GM will come back strong. “With as much cash as it has, and with the recent cost cuts, we'll be okay,” he says.

General Manager Dale Kocourek says the store is not going to sell as many new cars as it did two years ago. “Today, we're dependent on GM-Certified,” he says.

The dealership gets 99% of its used inventory through trade, although, recently, it took delivery of several vehicles it purchased through one of the online auctions.

“Once in a while, you have to buy used cars just to excite the sales staff,” Pietroske says.

Recently, the store bought 10 one-year old Impalas that the staff sold in less than a week.