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Dealership Staff Wins $1Million | DrivingSales News

18 Honda Dealership Employees Win $1 Million In Powerball

January 18, 2016 3 Comments

We told you last week a dealership in 2012 saw its employees play the Powerball together, actually hitting a jackpot. Fast-forward four years and it just happened again.

The service department at Wilmington Park Honda in Wilmington, Delaware won the Powerball. While these 18 employees didn’t win the jackpot for $1.6 billion, they did manage to win a combined $1 million. After taxes each of the dealership employees won $41,000 each, not a bad way to ring in the New Year.

The winners from the fixed ops department at Wilmington Honda at first couldn’t believe it. Dealership employees Terri Gray and Lee Davis shared their experience of finding out about the Powerball win. Gray explained, “I was flabbergasted, I didn’t believe them. I said no way, no way. And he says yes, and I said really and then I did the little happy dance.” Davis outlined his experience saying, “Going through them, I was about half way through them and one of my guys called me and said, ‘Did you get to it?’ I said I don’t know what you’re talking about. He said we got five numbers. I said no you didn’t”

Now that the dealership employees have won tens of thousands of dollars each, the question becomes, what will they do with their winnings? Responses included paying off bills to free up more of their paycheck, putting away the money as a “nest egg” and having a bit of financial security. In an expression of excitement for winning the money dealership employee Millie Turnbull noted,” going to sign that check with my pen that says ‘I Love my Honda.”

The dealership staff won using a strategy. They put money into a pot and bought 90 tickets from three different states. The investment from each of these employees that netted them their $41,000 prize was $10 a piece.

About the Author:

The DrivingSales News team is dedicated to breaking the relevant and the tough stories affecting car dealers. Have questions for DrivingSales News? Reach the team at news@drivingsales.com.

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    David Ruggles

    As someone who was in the room at the FTC workshop I offer the following:

    First, it was a hatchet job. Anyone who wanted to ask a question had to write it down. If they didn’t want to field the question, they just shuffled it to the bottom of the pile. I asked 7 questions by writing them on the cards provided. Not one was asked.

    Before I start on Tesla and their counsel’s comments, I should first explain that I am in full support of Tesla selling their vehicles on a direct basis AS LONG AS they have to follow the same rules as a conventional dealer. For example, many states have laws that state that a franchised dealer has to have service and parts facilities connected with their sales department. While Tesla would have you believe these laws were passed to thwart Tesla, this is a bunch of crap. These state laws came about mostly in 60s and 70s when new cars could be sold off of a gravel lot with a trailer hauled in. OR, like in the case of the local SAAB dealer when I was in college, SAABs were sold out of the dealers dorm room. He had signed an agreement and had bought a single car, a SAAB Sonnet. When Datsun and Toyota came to the U.S., it wasn’t unusual to see a couple of new cars parked on some gravel next to a gas station. These laws were enacted to protect consumers and to protect good dealers from bad dealers, NOT to cause problem for Tesla. At that time I don’t think Elon Musk had even been born. They are quite practiced at playing the victim, but they are right about some stuff. We don’t need to be married to ICE and we have to start somewhere. I am happy for Tesla to learn from the mistakes they are making. They will find there is good reason for the current system. I am happy for them to find those things out on their own as long as they don’t receive unfair advantages over conventional dealers. A mixed or hybrid sales system isn’t practical UNLESS the FTC allows price fixing. You can’t have traditional dealers having to compete with their supplier. Few business people would invest millions in a business where they received no guarantees that their supplier wouldn’t circumvent them, sell direct, and undercut them on price. So the only way business people get involved is if there are guarantees wveryone sticks to the same price. Currently, that is illegal and the FTC and the DOJ have been known to put people in orange pajamas over such strategies.

    Ironically, in the room were many from consumer groups who actually think legacy OEMs will begin to sell direct to consumers, undercutting their dealers on price and forcing them out of business so the OEM can sell direct. No kidding. And many journalists, who don’t know how all of this works, are writing crazy stories about this. There are many, like Mr. Maron from Telsa, who think distribution costs don’t exist when the OEM takes them on. Tesla has a lot to learn. I’m happy to see them learn it. They haven’t yet gotten to the point where they have more supply than demand. I guarantee that will happen to them at some point. They will learn about things like “production smoothing” and “inventory buffering.” They will discover how disruptive and expensive it is to start and stop assembly lines to balance inventory. They will find that at some point, the money invested in a distribution network will be badly needed to try to stay up with product development. And they will be taught that lesson by legacy OEMs selling EVs through their conventional dealer network. Tesla cachet will wane as time goes by.

    BTW, the market is becoming flooded with used Teslas. Go to their website and peruse the pre-owned inventory. Then go on AutoTrader and do a Tesla search. As a percentage of their total sales, the number of pre-owned Teslas might alarm some. The prices are the site aren’t market driven. Releasing those vehicles into the market at wholesale will provide needed clarity. In other words, we need to know what they are really worth used. The way to determine that is to sell them under competitive bid circumstances. If Tesla does that, real residual values can be developed as well as residual value insurance premiums. Tesla is attempting to maintain a certain artificiality that isn’t sustainable.

    RE: “According to BuzzFeed, Maron provided the following reasons as to why Tesla right now doesn’t make use of a dealership network:

    Dealership Locations. Tesla has a different location strategy than dealers.”

    No argument here. Tesla should be allowed to succeed or fail based on its own business model EXCEPT if they want to do thing legacy OEMs aren’t allowed to do. I can see certain allowances for them because they are an electric car company and it is in the best interests of the public that they succeed, depending of course on how one defines “succeed.” I don’t see how FTX has authority to trump state law, however.

    RE: “Inventory Differences. Tesla builds cars when they’re ordered.”

    If they think that is gong to last, they’re naive beyond words, but let the market teach them.

    RE: “Different Sales Strategies. Tesla sales can take hours of education.”

    No doubt. No argument here.

    RE: “Different Profit Models. No Insurance, Financing or F&I products to sell.”

    Time will tell if that lasts. Currently, they are subsidizing sales with artificial residuals. Again we’ll see if this strategy survives Tesla’s attempt to go volume mainstream.

    RE: “Different Advertising Strategy. Tesla doesn’t advertise.”

    For now.

    RE: “Tesla argues direct sales keeps prices lower than they would be if they sold though dealers since they say dealers simply mark up the price.”

    This is a bunch of crap. The market will teach them about this. But they should have the opportunity to learn one way or the other. MSRP is MSRP. Wholesale is wholesale. IS Tesla claiming to sell to consumers at wholesale?

    RE: “Tesla believes all vehicles should be electric, so they wouldn’t want to share a lot with gas-powered machines.”

    Again, it really doesn’t matter who is right and who is wrong on this. Tesla should have the right to distribute the way they want except when they might gain an unfair advantage over legacy OEMs. Specifically, I have a problem with Tesla being allowed to be granted a dealer license in certain states based on mall locations with no service facility, while legacy dealers aren’t allowed to do this. There might be other considerations to work out. Tesla claims they are prohibited from doing business in Texas. This is an utter falsehood. They are prohibited from doing business in Texas based on Tesla’s business model, which they are too stubborn to change to comply with Texas’ statutes. Currently, other auto OEMs have factory stores in Texas without issue. But Tesla won’t adapt, preferring to play victim. As a matter of record, there are Teslas all over the road in Texas. There is even a Facebook page for Texas Tesla owners. They are being sold and leased, and sales tax is being collected by the state. But Tesla is outing because they aren’t being allowed to do business exactly they way they want to.

    RE: “Maron also said General Motors is the reason for the franchise dealer system. Speaking at the FTC workshop Maron said, “With respect to General Motors, their position boils down to this: Because they voluntarily chose generations ago to use a certain business model, [the company feels] everyone that comes after should be required as a matter of law to use the same model.””

    More crap from Tesla – The LAST thing GM wants is to takeover distribution of its products. GM will enjoy pricing cover provided by Tesla when it brings its own EV products to market. GM will be able to take advantage of its own dealer network as EV vehicles become more volume and mainstream. While Tesla struggles to stay up with technical innovations AND expanding and maintaining their distribution system, GM will be abe to use the money they DON’T spend on product development while enjoying the benefits of “inventory buffering” and “production smoothing.”

    For consumer groups who are piqued because the FTC has LONG supported the current dealer model because FTC has felt that like franchise dealers competing against each other was beneficial for consumers, they are still likely to be disappointed. Hearings like this give them false hope. Do they really think a new vehicle will cost them less money if they can buy direct from the OEM? They don’t understand the dramatic cost increase an OEM experiences when “inventory buffering” and “production smoothing” are lost. If consumers want to all pay the same margin so no one gets “taken,” then dealers should be required to all sell for MSRP. Then all that is left will be to negotiate the trade. Sounds easy, right? Let consumers start lobbying FTC for that. But here is the fact of life I have learned from doing this for a while. Consumers will never be satisfied with the current system. Those who say consumers “don’t want to play the game” are just naive. Consumers DO want to play the game. They just want to be guaranteed they are the party in the negotiation that “wins” based on THEIR perceptions.

    Stewart

    Given GM’s flop w/ the Shop-Click-Drive endeavor, this is another futile attempt to make the program successful. may work in some markets, but overall cannot replace a COMPREHENSIVE local dealer’s customer service.

    TL

    Just another way to screw their dealers.

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