The Boeckmanns could be called automotive retail’s First Family. Patriarch Bert Boeckmann and his wife Jane are celebrating their 50th anniversary as owners of Galpin Motors, the last 20 as Ford’s top selling dealership. Including Ford, Galpin sells 11 brands in the northern Los Angeles area.
Sons Beau and Brad play an integral role in the business. Beau is becoming the face of the group with his high profile involvement with SEMA, co-hosting the recent MTV show, Pimp My Ride, and being asked to speak at numerous industry conferences.
Dealer magazine sits down with Beau to get his take on the industry today, what it was like growing up in the business and what the future holds for Galpin.
California’s automotive market has been hit pretty hard. How is Galpin doing right now?
We are doing alright, but I guess everything today it is a matter of perspective. You compare things against with last year, they look pretty good. If you compare it with a couple of years ago, or basically any other year in history, it is still tough.
California’s economy is still lagging far behind and we’re not really seeing any signs that are pointed to a dramatic change. But Galpin is actually gaining market share, so in that regard things are looking pretty good. Our Honda store is just on fire these days, which is a beautiful thing.
I don’t hear that from a lot of Honda dealers right now.
We are an additional point, and have been a dealer for less than four years. And our growth has been pretty dramatic over those years. Currently we are in third place in the state of California, and vying for second. We are getting closer all of the time. That is pretty dramatic to do with a brand new point with no service history and no sales history.
So that is doing fantastic for us and it is not in the most prime location either. It is in the North East Valley, which is not the highest income area, nor the easiest to get to in the world. So considering all of those factors, we really have done quite well. I am extremely proud of how our store has done.
And as far as Ford goes, we are maintaining our top position this year.
So that is 20 years in a row now as the number one selling Ford dealer?
Yes, sir. Now we are aiming for 21.
Do you think Galpin will maintain it this year?
I don’t like to say yes or no. It is probably going to be a tough race again.
How close was it last year? Didn’t it come down to the last month or the last week?
No, it came down to the last minute. And I am not even exaggerating on that. Literally, it was down to the last minute and we beat the second dealer by 12 units.
Was that Brown Ford here in Michigan?
Correct. We thought we probably had beat Woodhouse, which is in Nebraska. When you consider about 4,500 deals coming down to the last month that is pretty incredible.
I have to hand it to our folks. They did an extraordinary job and our team and entire community really came together that last month; we just had a really incredible moment.
It had actually been several months leading up to that moment. We put together a plan and pulled out all of the stops.
How are your other franchises doing for you? I know you’re probably winding down Mercury.
Yes, we are winding down the inventory we have left. But, we have been doing pretty well selling Mercury, believe it or not. We will be out of them pretty quickly.
With Lincoln we are hanging in there. We are still number one in California. As far as being competitive with other dealers, we are doing alright. That brand is certainly going through its struggles, though. We have that meeting coming up in October (Editor’s note: We conducted the interview in late September) where we will learn the future of Lincoln and what it holds. I think if Ford comes close to what they did with the Ford brand, it will be a strong brand of the future. Jaguar is very exciting. The new XJ is a phenomenal product and that is doing quite well.
The industry has seen some dark days the last two years, is it starting to lighten up? Are you more optimistic than you were last year?
If you’re talking about 2009, I guess less fearful is a better term than more optimistic. I think we have been through the worst of it. I certainly hope we have been through the worst of it. But right now there is really nothing that I can see that has a hope of any kind of stimulus for the economy — both in California and the United States. So I don’t see anything that on the horizon that makes me optimistic. But at the same time, I don’t see anything on the horizon that makes me pessimistic or worried that we will have another crash like we did. Unfortunately, I think this is becoming the new normal.
California has a big governor election coming up this month.
Yeah, we do. I think that there are a lot of people afraid that taxes are going to go up and things are going to continue to stay this way. People are still hanging on to their wallets, and probably they should. After the election they might look at things as turning around and talking about how things are going up, up and up, or it might get even worse. But that remains to be seen. Personally I don’t see anything getting dramatically worse than what it is today.
How did Galpin manage the downturn?
We worked extremely hard, but I’ll admit it was difficult. The worst thing that I ever had to go through in this business was our first layoff.
My brother, father and I took that to heart. It was the first in Galpin’s history. We had basically two waves of it, about 100 people in total. It was about 60 in the first round and 35 in the second one. That was the worst. The good thing was we were able to hire back many of the employees.
Cash for Clunkers was difficult in getting our inventory situation the way that it needed to be. But you know what? We put our heads down and worked every single day and we cut into expenses without cutting into the bone. Our team really got together and focused because we had to, we were at a survival mode at that point. We just did anything we could do in our power. I say now, I have probably learned a lot more in the last two years, than all of my education put together.
I guess taking it from that perspective you really have to learn the business almost from the ground up.
Yeah, you really had to pay attention to every single dollar that was coming and going and you had to focus on that. Unless you go through it, you really don’t understand what that is like, and now I feel I do. I try to look at it as a good thing. It was a learning experience, one that I will never forget for the rest of my life.
What is the biggest challenge you have had?
Definitely, it would be the economy. Today we can get people financed, the banks are now rational, not like before when they were being irrational. Now the good news is that banks are rational and we can make sense of it and get people financed as long as the deal makes sense.
Think about it. We have the highest quality vehicles ever produced — from everything having to do with technology to the driving dynamics and all of the design and look of the vehicles. The manufacturers have something to work with, so everything is there, the only thing bad out there is the economy. It is a little bit frustrating when you do everything you know how to do, and some things are just out of your control.
Your dad has been a dealer since 1960, right?
My dad started selling cars in 1952 – then joined Galpin in 1953. This is his 50th year as a dealer principal at Galpin, which actually opened in 1946.
That is incredible. It has been a great run.
It has been. You know, my dad is not one to sit back and enjoy success. When he accomplishes something he looks for the next goal. Every day is a new day in the car business. What you did yesterday you might not be able to do today. I shouldn’t say that exactly, but every day is a zero on the sheet. That is what I meant to say. Well, I wish my dad would actually enjoy the success a little bit more, but he is starting to do that a little bit.
Now you and your brother, was it always understood that you were going to work in the business?
I can only speak for myself, but for me it was. But my dad never pressured me to get into the business. It was something that I just kind of always knew I was going to do. I love this business and pretty much everything about it. I love the people most of all. I would much rather be talking with customers or employees and playing with cars than sitting in the office looking at spreadsheets and accounting. I love automobiles, I love the complexity of the business, and frankly, just the fact there are so many businesses rolled up into one. It is certainly a business you never get bored in. I love the change that this business is about. For me, this is my love and my passion.
First your father, and now you, have had a lot of influence on this industry. From helping popularize accessories to having a say into which vehicles are built and how they are designed.
That has been a lot of fun. Being on the product committee for Ford is a real honor. My dad was on the first product committee with Bob Tasca Sr. and now I am on with Bob Tasca Jr. and Bob Tasca III. You know, we are just very close friends and there is a wonderful history there.
My brother does a wonderful job here at the dealership. You can talk to him about what he thinks. He is a magnificent manager, very inspiring to everyone that works in the organization and he does his job wonderfully as well. It is a theme. I just work in the areas that get more attention, maybe.
As you have grown up in the business, what were some of the challenges being the “dealer kid”?
A strange as it sounds, people always assumed I knew more than I actually did. I was just supposed to be born knowing this? Just because I have spent and lived with my dad that automatically rubbed off on me? He didn’t sit there training me at night. Business is certainly what we talked about as I grew up but we were like every other family – we didn’t always talk about work.
People, though, treated me very well here. I worked very hard to earn their respect.
But growing up in the business, one of my challenges was as soon as I became comfortable in a job, that’s when I got moved to the next job. So I never felt like I was particularly great at anything. I always felt I got experience in each department, but I was never comfortable. I was always painfully shy growing up. Selling cars was probably the best thing I ever did because it got me out of my shell.
You know, I sold cars for a living for a couple of years and then went into F&I and sales management. The time I spent on the floor was probably the most rewarding part of being in the business – and probably the toughest. It gave me an appreciation for the guys that were on the floor.
What is the secret to a strong accessories program? You obviously have a passion for that.
I think that is what it is. Many times the dealership program fails because it was a manager that just said, “Here, we are going to get into the accessories business.”
We’ve done it since way before I was born, so, it was something that the people did because they loved it. You have got to have the people who are in charge that absolutely love it and it has to be something that you look at the long term.
There are times we have lost money on cars and I have become personally de-motivated by it wondering if it was the right thing to do. But the next time comes along and you sell one right away and make good money and you get your confidence back.
And right now I think it is a very tough time for the industry to customize cars – because people are really about value and watching every penny. At Galpin Auto Sports, we don’t sell anything anyone needs.
Also, being flashy is not the fashion, and not that everything we do it flashy, but it certainly adds to it. That market is lost because people are more about driving inconspicuously rather than conspicuously. I would say that is the biggest challenge today, and I think in the future it will turn around very dramatically again. I see a real future in it, but right now, it is tough.
How has the used car business changed the last couple of years?
For us, we used to sell almost exclusively from trade-ins. And now, we are getting, maybe not the majority, but a higher percentage from the auction. That has been a major shift. We are seeing prices remaining very strong, through this entire period. I think we are going to see a shortage of used cars.
How are you managing that aspect of it? I have been hearing it is harder to get them.
Well, as I mentioned, we are going to more auctions than we used to. We don’t have as many good, quality used cars as we need. On another side, you have organizations like CarMax that is taking more of the cars.
We have probably spent more on reconditioning, so our cars look more like new cars and drive more like new cars.
I think today with the Internet, that has hurt that side of the business. When you look at two 2007 Mustang six-cylinder automatic, with similar miles, they might look very similar on the Internet, but they could be very different in person. So by spending more on reconditioning to make a car a better car, you are actually at a disadvantage on the Internet. I think that is a very interesting development. So, in some ways the Internet is driving down the quality of used cars.
Are there any franchises you would like to get your hands on?
Sure, I think we would consider a new franchise as our Saturn dealership that’s adjacent to Galpin Ford is currently sitting empty.
What are your impressions of the domestic auto industry right now?
I think the domestics, like Ford, will continue to be strong and I think GM with a new focus and balance sheet will be stronger in the future. I have to add, I have no idea about Chrysler. I don’t know how they are going to make it, but they have a lot of confidence and are openly optimistic. At the same time Sergio Marchionne seems like a pretty charismatic leader. Who knows, it is going to be a tough battle in the future. It will certainly not be for the faint of heart.
He has set that company up though, that if it were to go south, he could trim some of those pieces off pretty easily.
Fiat hasn’t built the highest quality product in the past, and neither has Chrysler, so the question is are they going to build a quality product in the future?
My blog posting a couple of weeks ago was “The Folly of Fiat.” I think dealers are crazy to invest money in that, and not to mention it is a small car, but there is just no history there.
Well, it is a cute little car.
Sure, but the small car market makes up only 3% of U.S. sales.
And there certainly are not a lot of profits in that segment. I am with you on that one, for sure. But then again, if you are dealer sitting there thinking, we’ve got to get these cars. We are sitting here with a Saturn dealership that we are in the process of closing right now. We basically have an empty showroom. We are looking for opportunities in the future, but I am not sure what that is going to be.
Why do you think that Saturn deal fell apart?
It never felt right from the beginning. It was a kick in the gut when I first heard the news. In a way, Saturn had died a few years ago, and when GM really crushed the soul of Saturn, it never was what it once was. To me, the whole Penske deal was almost like having a family member on life-support. It sounded like it was already dead, and in some ways it felt right and it just was gone. It was a magnificent brand — if you were going to start a car company that was the way to start it. Remember, Saturn was created to help GM transform. It is sad, very sad.
Are you doing anything with social media?
We are on Facebook and somewhat on Twitter, but not very successful at that, because that one is real tough. You know, we have our Facebook fans and every time something happens we are on the site. I think there is a future in it, exactly what it is, I don’t know. I think that is still being developed today and I think it is going to look much different five years from now. I wish I knew exactly what that meant, because then I could guess what to do.
You recently had a big sales push didn’t you?
Yes, we had the “Galpin 4,000” where we tried to sell 4,000 cars in 100 days.
How’d that go?
Fantastic, we sold just over 4,800. The funny thing was we thought we were going to come up short, and realized in our calculations we hadn’t included used cars. So all of the numbers we were looking at ignored our used cars sales. And I am not talking about wholesale. So we are good now.
That had to be a funny moment.
Yeah, it really was. We were saying we were very close but didn’t know if we were going to make it and then we caught it. That kind of mistake isn’t too bad.
What does the future hold for you?
It is a good question. I will always be here, I love this business. I love what I do and I am very fortunate because I get to be involved in so many things that are car-centric. I love this business, I love cars and I love people that are in it. I love Ford Motor Company and working with them and being on the product committee and seeing things from the inside.
There are few names that are as respected as Galpin in this industry.
Well thank you. One of my goals is to not screw that up. I have very big shoes to fill — as does my brother. We both have very big shoes to fill. I am very proud of my father, I couldn’t be more proud of anyone. My whole goal in life is to make my dad proud — and my brother would say the same thing.
I remember having dinner with him when I was at the store and I could hear that in his voice.
I love him with all my heart; he is the greatest guy in the world.
How is he doing?
He is doing well. But he is working too much. He is finally starting to take a little more time off, maybe going home a little earlier. But that is still probably more than most dealers work. But he is doing great. We just want him to take a little more vacation time and enjoy himself a little bit more. He is actually for the first time starting to do that. I am starting to see a lot more smiles from him.
Let me ask you about the fixed operations part. That is becoming, and should be almost as important as it has ever been. But frankly, the warranty work is really declining. Dealers are at such a disadvantage when it comes to that customer pay.
Well, we just opened up a Quick Lane in the last few months, and we see the same thing. The truth is we are going to have to fight harder for that customer pay work and maintenance work. And that is how we are approaching it. The Quick Lane has been very successful. I don’t have any of the numbers or stats in front of me, but it is a great compliment to our used operations. I think we have to focus on the future. But it is true; cars have very high quality now.
How is the relationship today between the dealer and the manufacturer?
I think we are in a very fortunate position because we have maintained very close and excellent relationships with the manufacturers. Ford would be by far our strongest. That is our family. It was pretty cool when Henry Ford III worked with us for a period of time to learn the industry. And that’s one of the reasons I have the utmost respect for the Ford family. Not only are they wonderful people, they are also hands on. And Alan Mulally is simply the best CEO I’ve known of in my lifetime.
Even with Jaguar and the change of ownership, that has been a very positive transition. It has gone very smoothly. I met with Tata for the first time and that was very cool, they are true gentlemen. So far we have maintained excellent relationships. We try to do what is right by the manufacturer, you know if we have issues we bring them up privately, not publically. We try to focus on what they do right there. We try to do things in a very proper way. And we try to do the best job and what we think the manufacturers would like for us to do. We try to sell a lot of cars – you know, they like volume too! And we do it in an ethical way. Our reputation with the manufacturer is probably similar than the way it is with the public.
I think Ford really is doing a good job. There is a little bit of anger over the Mercury deal, but overall I think being able to avoid the dealer termination like the other two domestic companies has helped.
I can’t imagine what it would feel like to be a Chrysler or a GM dealer with what those poor guys have gone through. Those deals were very one sided.
I wrote about that last year.
You just had to sign the agreement. You really didn’t have a choice. We had to sign it, remember, we were with Saturn so we felt it here.
What was the most important lesson you learned from it?
Well, I think, first of all your reputation is important. Secondly, I think it more had to do with making those tough choices, you look back and you wonder if you were really wasting that much money in the past. If we had been more disciplined far before the recession, it would have been a different world. We had a solid foundation. I look back and say thank God we didn’t over-leverage ourselves. In the future, my lesson is to try to maintain that.
What was the first car you sold?
It was a gold 1990 Escort. I sold our last 1989 Festiva. That lady was the happiest person; you should have seen what she traded in. I dropped it across the street to get it appraised and the sales manager said, “Stop right there, you have a $100 car, we don’t need to appraise this car.” It was falling apart – the exhaust was dragging.
What is your favorite vehicle?
First one that comes to mind is the Mustang. It is just so iconic and so fun to drive — it is just phenomenal in every way. To be more specific, a Shelby. That would be my number one. The Ford GT is probably the most fun car I have ever driven.