Herb Chambers, the Auto Dealer and Empire Builder Opens Another Dealership
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InsideCOVER: Herb Chambers - Dealer of the Year
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F E B R UA RY 2 0 0 8 VO L U M E 2 1 N O. 1
on the cover
table of contents
Herb Chambers is the
Dealer of the Year
‘You have to ‘Expect 2008
PHOTO CREDIT: ANTHONY work it – ‘The AG will ‘You could be
SCARPETTA PHOTOGRAPHY 6 really live 8 not stop with 9 sales to fall 10 unwinding
and breathe these eight EVERY deal
about since May 2003’
AUTODEALER KIA .’ dealers.’
The official publication of the Massachusetts State Automobile Dealers Association, Inc.
6 IN THE NEWS: Silko Kia joins nine other Kia dealerships that have closed their doors over the past
EDITORIAL STAFF 18 months. But others, including Kia Sports Auto World in Bourne, are going strong. Bedard Brothers
Lee Goodwin David L. Williams takes over Gateway Chevrolet. Hassan Brothers settles its termination lawsuit with Jeep. Lowell Chrysler
PRINTING & LAYOUT Dodge closes its doors. Lia Toyota begins expansion. Ira donates to Danvers diversity. Dealers report that
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12 COVER STORY: Dealer of the Year An outsider who made his mark in the office copier
Application to mail at Periodical-Class business, Herb Chambers turned to cars 25 years ago. Today he’s an empire builder with an eye for
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4 february 2008 massachusetts auto dealer www.msada.org
COVER STORY: DEALER OF THE YEAR
Empire Builder by Lee Goodwin and Meredith Spencer
When people look at Herb Chambers, they see the accoutrements of wealth and a stable
of dealerships. So why would a guy at the top of his game give a damn if the mechanics’
bathrooms are clean? When you understand that, you’ll begin to understand Herb
You know the jingle. “We’ve got it. At Herb Chambers we’ve got it.”
It could just as easily apply to the man. Herb the largest independent distributor of office he says, the key to sales is simply being nice to
Chambers has got it. equipment in the United States. And they always people.
include how Chambers went looking for a
He’s got the 40-odd dealerships including his
Cadillac and ended up buying a dealership. A-Copy Becomes Ikon-ic
palatial Lexus store in Sharon (see side story).
He’s got homes in Boston and Connecticut, and The office world was moving from mimeograph
The Central Question
he’s got a helicopter to commute between the and carbon paper to photocopy. In 1965 he
two. For long distance commuting he owns a None of those stories asks the central question. founded his own company with just $500
new Gulfstream 450 Jet. He’s got a rotating How did an outsider with no automotive borrowed from his mother. He named it A-Copy,
collection of 15 to 20 exotic and collectible cars experience build such a formidable organization? so it would be listed first in the phone book.
in his garage, and he’s got a 188-foot yacht if What keeps Herb Chambers – the man and the Chambers used his savvy as both technician and
dry land becomes dull. organization – going, and growing? salesman to purchase used copiers, then fix and
And now he has the 2008 Time Magazine Dealer Following his time in the Navy, Chambers began
of the Year nomination and he’s the state’s working for a copy machine company, first as a His success snowballed. His competitors
dealer of the year. technician and later as leader of its #1 sales guaranteed repair in 24-hours. A-Copy promised
team. to fill service requests in
When the press writes about Chambers, they
eight hours – and in the
follow a tight narrative. How as a youngster He made the transition to
early days Chambers
growing up in Dorchester, he thought the local sales by selling extended
warranties while servicing the “The first time himself made the service
dealer possessed untold wealth. With his nose
I met him, call.
pressed up against the showroom window, he machines – so many
marveled at how many cars the businessman warranties that management I said to myself, Chambers sold his
“owned.” took notice and expanded his ‘This guy is electric’” business in 1983 to Ikon,
territory. Speaking to people recalls then known as Alco-
How, following a four-year stint in the Navy, he
in a sales context was difficult, Standard, which was
opted for a paycheck instead of school. He never John Covell
but a Dale Carnegie course attempting to consolidate
attended college. How he founded a copy
boosted his confidence. Today, independents like A-Copy.
machine company that would go on to become
Herb Chambers Lexus in Sharon opened in fall 2007. Chambers and his team toured the country seeking
design ideas to incorporate into the 110,000,000 square-foot dealership.
COVER STORY: DEALER OF THE YEAR
Empire Builder...continued from page 12
Chambers had become the largest Canon He wanted a business involved in distribution, Keeping Up Morale
distributor in the world. a mix of new and used products, and something
Adopting the mindset of a customer is just one
service intensive. What he didn’t want was
key to his success. (Chambers’ service
How to Buy Companies to compete any longer against the likes of IBM
departments wash and vacuum every car that
The addition of A-Copy represented “a big and Xerox.
feather in the cap” of Alco-Standard, lending its
His ability to inspire and
turn over management
control to others is also
key. He expects his GMs –
he refers to them as his
“partners” – to fix their
own problems and run
their dealerships as
possible. He has a saying:
“We lead people and
He also subscribes to the
adage: Trust but verify. For
example, he demands
that his technician
bathrooms be inspected
once a month. When he
discovered one recently
The 40-Group: Chambers (center) with his 40-plus GMs. They gather every month to present detailed results and toss around ideas. Chambers dissects the
numbers and exhorts his managers to find where opportunities exist. that was a mess, he hit
the roof. “People may
wonder why that's
No Pre-Conceived Notions
consolidation strategy “instant credibility” and important. The restrooms aren’t public and the
helping the Fortune 500 company grow into one Not long after he purchased the first dealership techs spend more time with cars than
of the dominate players in the office equipment in New London, Connecticut – where he walked customers. I ask, ‘What about morale?’ If they
industry worldwide. Alco became a $20 billion in looking for an El Dorado and walked away don’t enjoy good morale, they may not fix the
dollar company and Chambers its largest single owning the business – he set his sights on car right.’”
shareholder. expansion. By 1997, just 10 years later,
On the sales side, new sales people spend two
Chambers had 15 dealerships spread over
“The first time I met him, I said to myself, ‘This weeks with Covell. He likes to point out that new
Rhode Island and Massachusetts and sold
guy is electric,’” recalls John Covell, director sales consultants win MVP honors every month
of Marketing and Training. He first joined along with seasoned employees at a monthly
Chambers at A-Copy in 1981 from Xerox. “He From day one Chambers generated ideas of how motivational breakfast. Every year Chambers
was so exciting and intense about what he to conduct business differently. A confirmed car hosts an elaborate gala, rewarding top
was doing. There was this [atmosphere of] nut, he began buying and selling cars in the performers with Rolex watches and cash. Top
entrepreneurship.” Navy; nine in one year. “Automobiles became sales figures won’t win at either event unless
beautiful to me,” he recalls. accompanied by high customer service marks to
Chambers stayed on for a while at Alco-
match. For managers, overall management
Standard, in charge of mergers and acquisitions. At A-Copy, he once purchased 16 in a year. He
combined with low turnover is a must.
He gained valuable experience in buying frequently says that he understands the business
companies. He also learned how to delegate to from the consumer side. “He’s concerned with the total overall objective,”
others, and to trust others while holding them says Quirk. “He has confidence in his ability and
“He had no pre-conceived notions of what he
accountable. in his people’s ability. He absolutely, positively
could or couldn’t do,” says Quincy-based dealer
loves the business.”
After completing a number of acquisitions, he Dan Quirk. “He put A-Copy on the map. He
started to shop around for a company of his focused on customers. He brought the same
own….in a different industry. principals to the car business.”
www.msada.org massachusetts auto dealer february 2008 13
COVER STORY: DEALER OF THE YEAR
The ‘40-Group’ Review Turning ‘Accessories’
into Profit Centers
Does Chambers take more pleasure in the rewards of his success, or the
fact that he found a way to turn some of those “accessories” into profit
In addition to his legion of dealerships, he has amassed a collection of
real estate and exotic cars. He is quick to acknowledge that he has been
very fortunate in business.
His properties include a country estate in Old Lyme, Connecticut and a
spot at the new Mandarin on Boylston Street, slated for completion in
2008. Last year, he placed his Back Bay residence – a rare Beaux-Arts
‘There’s no question that he’s a big picture guy,’ says John Covell, who has worked for style home – on the market for $14.95 million, breaking Boston’s single
Chambers since 1981 and followed him from the copier industry to the auto industry. home sales record by $4 million. Chambers spent two years renovating
‘He was so exciting and intense about what he was doing.’
the house before its sale, and says that it’s an “insane” property for
someone without a family.
Every month the company’s 40-plus GMs gather together for a In Old Lyme, Chambers keeps a stunning collection of cars – 15 to 20
detailed review of their stores. exotics and vintage autos. The collection, featured in The Boston Globe
Chambers lavishes praise on those who bring good numbers as well and Chronicle television news program, includes a McLaren F1, a Mile
as good ideas to the meeting. Miglia tested 1955 Mercedes-Benz Gullwing, a 1959 Cadillac Biarritz
Convertible Eldorado, a 1932 Ford Coupe and 4 Ferrari Daytonas. Even
The managers are expected to dig into minutiae at these meetings. car nut Jay Leno has asked Chambers for a spin.
They present their financials one manager after the other: units new
and used, gross profit and per vehicle, F & I, service, parts, expenses By Sea and Sky
by category, aging receivables, asset management and customer
And if tooling around the Connecticut countryside becomes tiresome,
Chambers can head to the sky in his jet, take his helicopter for a spin,
Chambers, who has pored over the numbers earlier, sits ready to or board the Excellence III, his 188-foot yacht. Chambers was
pounce: “What happened here? How about here?” “intricately” involved in the design and building of the ship, traveling to
“He zeroes in. He finds where the opportunities exist,” John Covell Europe to personally meet with shipbuilders Abeking & Rasmussen.
says. “There’s no question that he’s a big picture guy. But he believes He has built and sold several yachts – and leases the Excellence for
in looking at the numbers and dissecting the numbers.” much of the year (at $500,000+ per week). The plane also spends most
of its time in the hands of others.
In the words of longtime associate John Covell, Chambers is “driven,
The discussion is designed to provide the type of focus they miss when driven, driven.” Another associate, Jim Xaros, contends that the most
dealing with day-to-day issues and questions. It also provides a forum difficult aspect of working for Chambers is keeping pace with him. No
for implementing changes swiftly among the entire group. For matter where in the world his boss may be, Xaros quips, his phone will
instance, while examining credit card expenses, someone discovered ring at the end of the work day, everyday, and Chambers will be asking,
that taking a credit card number over the phone nearly doubles the “How’d we do today?”
service fee compared to swiping a card. Pennies, perhaps, but multiply
the fee by hundreds of thousands of service customers, and costs PHOTO: CAMPER & NICHOLSONS
It is an example of the Japanese concept of kaizen, or constant
improvement, that Covell tirelessly advocates. “If we didn’t have these
meetings we wouldn’t be as successful as we are,” Covell says.
Chambers prods everyone, constantly, to find new avenues to
improvement. “I’m trying to convince each and every one of you how
you can be better,” he tells his employees. “As a company, we can be Chambers, a Navy veteran, was ‘intricately’ involved in the design and construction of his
so much better.” 188-foot yacht. Always on the lookout for opportunity, he leases it for much of the year, at
nearly a half-million dollars per week.
14 february 2008 massachusetts auto dealer www.msada.org
COVER STORY: DEALER OF THE YEAR
THE EVIL EMPIRE
Asked about Chambers’ expansion plans – specifically ability to share existing advertising cuts costs
Central Massachusetts – John Covell calls Worcester and and has allowed him to pay a premium for
surrounding towns “a great market.” Metro Boston may subsequent dealerships of the same brand.
boast great demographics and high density population, ‘It’s price.
Still, he never allows the upside of a potential
but it suffers from a severe lack of space. However, that purchase to cloud his critical thinking. “I think
How bad do
space is plentiful further from the Hub, and Chambers is long term. I think about things more. I I want it,
missing a few brands from his 40-plus points – which run consider 'what's the worst thing that can
the gamut from Vespa scooters to Bentley. There’s no and how bad
happen? How bad will it be?’”
Nissan. No VW. No Volvo. do they want
And what if he were to throw aside his
Chambers is always looking for new opportunities, and if the organization and return to just one or two
to sell it?’
location is right, and the deal makes sense, he’ll buy. dealerships. Where would he focus?
What’s the hardest aspect of putting together a deal? continued on page 18
“It’s price,” Chambers says. “How bad do I want it, and how
bad do they want to sell it?
I’m not a fire sale buyer. I’ve dealt with some very good
negotiators. I wasn’t the best negotiator, but I’ve gotten
Patience and Persistence Pay Off
Occasionally, Chambers will invest himself in a deal but
walk away from it. “Even at the 11th hour, because
someone tried to change the deal,” Covell says.
Nor is Chambers afraid of a fight. He once pursued a
lawsuit for nine years against Audi when the manufacturer
cancelled his franchise “for personal reasons” that
Chambers deemed unfair. A million dollars and a decade
later, he vindicated himself.
One recent acquisition required extraordinary patience and
persistence. Foreign Motors West, which Chambers picked
up last year, was a dealership group that Chambers had
wanted forever. “Herb was told repeatedly they wouldn’t sell
it,” Covell said.
Finally, the winds shifted. After two attempts by other
suitors, including Penske Automotive Group went nowhere,
it was Chambers’ turn.
From the beginning, workers at the employee-owned FMW
store regarded Chambers, a competitor, as “the evil
empire.” Covell and Chambers met with small groups of
employees over several weeks, dispelling misconceptions
and reassuring employees about their jobs. Chambers’
willingness to listen, combined with his self-effacing
manner and geniality, eventually won them over, and he
secured employee approval by a near-unanimous vote.
Stay Visible in Showroom
Controlling a large dealer group provides cost efficiencies.
When he purchased his first Honda dealership on
Commonwealth Ave 20 years ago, the “blue sky” was $4
million, “an unheard-of amount,” he recalls. However, his
www.msada.org massachusetts auto dealer february 2008 15
DEALER OF THE YEAR
The Jewel in the Crown
At the espresso bar in Chambers’ Lexus store, customers can enjoy lattes, even a sandwich, all gratis. The lounge and espresso bar at Herb Chambers Lexus also provide a friendly
atmosphere for customers and sales people to chat.
Herb Chambers Lexus in Sharon, the crown jewel As soon as customers arrive at the service
in the crown of the Herb Chambers empire, took entrance, German-engineered doors zip up and BY THE NUMBERS:
nearly three years to build and sprawls across 11 then down in seconds. Either a personal service 3 years to complete
acres. Its 110,000 square-foot showroom advisor familiar with their history, or valet, greets
11 acres of land in Sharon
features vaulted cathedral ceilings and abundant them. Behind the scenes, the service area
110,000 square-foot showroom
natural light. Customers are treated to accommodates 60 bays.
complimentary espresso and sandwiches as they 40 cars fit into the showroom
Chambers scoured the country with an architect
wait for their car in the dealership’s luxe lounge, 50-foot cathedral windows
and a photographer, traveling to Texas, Las
complete with marble fireplace. Or perhaps $500,000 cost of showroom skylight
Vegas, South Carolina and Georgia to pluck the
they’d prefer to stroll the Zen garden. If that’s too 140 staff members, including sales and
best elements from existing Lexus dealerships.
slow paced, the dealership also offers a WiFi- service department
He estimates he’ll enjoy bragging rights for two
equipped business center for customers. 5 lunch rooms for staff
years before someone outdoes him.
$30 million: estimated cost
The customer service desk is designed to resemble a hotel reception area. Every car that rolls through
a Chambers service department is washed and vacuumed. Lexus customers are assigned a personal It took three years to build and features 50-foot cathedral windows, marble floors, a floor
service advisor familiar with their history. to ceiling fireplace and can house 40 cars in its showroom.
16 february 2008 massachusetts auto dealer www.msada.org
DEALER OF THE YEAR
A (Reluctant) Public Face
Like many dealers before him, Chambers has become the public face for
his dealerships. Despite his ads, Chambers is a reluctant spokesman; a
commanding presence in small groups, but not someone known for leading
the PR offensive. He feels nervous in front of the cameras, and he's critical
of the results.
His eye-catching – some would say, provocative – ad campaign is built
around the theme that his sales people won’t try to “sell” you a car, they’ll help
you to buy one. That line originated with Chambers as he addressed his [ Herb Chambers,“ We don’t sell cars. We help you buy them.” ]
managers one day. Boston ad agency Modernista enlarged the concept,
painting Chambers as an “undealer;” a theme adapted by several other local
dealers over the past year or two.
The idea is to play upon, and dispel, the public perception of dealerships in
a car salesman:
general, and sales people in particular. One ad in the series, entitled “Here Comes a.) panic b.) vomit c.) punch him
a Car Salesman,” angered a few local dealers when it first ran. Everyone has a gut-level response to car salesmen. The moment we see one, we hold
onto our wallets. We bolt for the door. It’s a survival instinct. But it’s one you won’t need at
Covell acknowledged that he was “personally concerned” about those ads. “I Herb Chambers. Because we’re different. Our company is founded upon providing the highest
possible level of customer service. Which means our showrooms are pressure-free zones, our
don’t want our competitors to think that we’re disparaging them,” he said. “I prices aren’t artificially low, and our associates are only there to help. If you want help, that is.
Hey, it’s all about you. All we want is to be the good guys in this business. And we’re committed
respect our competitors….even if I want to beat them.” to doing whatever it takes to achieve that.
So, next time you’re considering buying a car, stop by. And relax. We won’t bite.
Pursuing Opportunity Online
It takes more than a clever ad campaign to beat your competitor, of course.
Visit us online at herbchambers.com Herb Chambers
People still shop the aggressively-priced store, as well as location, selection
and other key factors. But level the playing field, and who you buy
from can become a factor in attracting customers. Just ask Frank
AUDI BMW BENTLEY BUICK CADILLAC CHEVROLET CHRYSLER DODGE FORD HONDA HUMMER HYUNDAI INFINITI JEEP LAND ROVER
Despite the success of the ads, and the enduring draw that LEXUS MERCEDES-BENZ MINI PONTIAC PORSCHE ROLLS ROYCE SAAB SATURN SMART TOYOTA VESPA
newspapers hold for auto customers, Chambers continues to [ Herb Cham
bers, “ We don’t sell cars.
We help you
This ad (top), part of
buy them.” ]
expand his online presence. He was an early adopter of the This is an ad Chambers’ eye-catching
a car dealer, from
Internet, and with the help of in-house Internet guru Jay Gubala, written by – some would say,
an ad agen provocative – campaign,
Chambers continues to mine online data with the same penchant approved by cy, angered a few local
for dissection that he brings to his stores’ financials. [ Now, if we still have
dealers when it first
a horrible perc
eption of car appeared. Chambers is a
With its seemingly limitless ability to adapt and evolve, and blinded dealers. And
by commission on the whole,
Well, at Herb
dollars, car sales
e different. Our
men can spoi
l the enjoyme
n is correct.
nt of buying
reluctant spokesman. He
ible level of founded upon
combined with a profound capacity for measurement, the trust in the com
Yes, we have
an ad agency.
ice. We belie
ve it creates
great word of
prefers speaking to small
online world presents the perfect environment for Herb
is your happ
to change it
Yes, we have
for the bette
r. We want to
e not a char
ity. We’re still
in the car
groups, and shuns
iness. And we’r be the good
So, next time
to doing wha
tever it takes
to achieve that.
ultimate aim performing before cameras,
Chambers. He remains, despite enormous wealth and ng buying a
car, stop by.
We think you’
ll notice a big
difference. often critical of the results.
success, a man on a ceaseless search for opportunity – be it Visit us onlin
e at herbchamb
buried in numbers or just over the horizon. AUDI
ES - BENZ
LOW KEY CHARITABLE WORK
Can there be too much opportunity? because he wants assurance that the funds will find their way to those
who truly need them. “We don't have a policy about giving,” he said.
Herb Chambers would likely say no. But for nearly all dealers, including
“We do it on a case by case basis.” He acknowledges an aversion to
Chambers, one aspect of their business dictates “yes.”
Every day, dealers are asked to donate money, new cars, and used cars
His most recent visible charitable work has been on behalf of the 200
to groups and individuals in need. If only business were as steady and
Foundation, which honored Chambers as its Man of the Year last year.
reliable as requests for charitable contributions.
The Metrowest charity donates all of the money it raises directly to food
Chambers prefers to keep his considerable charitable works low key. pantries, counseling centers, respite homes and other organizations.
He responds most often to pleas from people he knows already,
www.msada.org massachusetts auto dealer february 2008 17
DEALER OF THE YEAR
Keeping Up with
Jim Xaros practically
grew up in the
automobile business. He
Why should joined the Chambers
organization 16 years
ago, and oversees
I buy from other dealership operations.
For Xaros, keeping his
suppliers when I can arms around the
accelerated growth and
actually buy from construction presents
one of his biggest
challenges. Even with
myself? two fulltime staffers
dedicated to con-
struction, the Lexus
store gobbled up much
of his life for three years.
Chambers Vice President Jim Xaros oversees
Not to mention major dealership operations. But keeping his arms
projects ongoing or around the accelerated growth and construction
takes up much of his time.
about to commence:
• a new Porche-Audi dealership in Burlington (a point
purchased from Pass & Weisz)
• a new BMW in Sudbury
• a new Infiniti on Route 9 in Westboro
• a new home for the Providence Cadillac dealership
• a Mercedes-Benz expansion (doubling the size) in Lynnfield
• a complete renovation for Mercedes-Benz in Natick
• completion of 2 new Smart Car centers
Asked for his view of the broader picture, Xaros said he expects the
trend to continue for domestics, adding that the local landscape
remains “over-dealered.” Long term, he predicted it will take more
than a year or two for things to “right-size” themselves.
Evil Empire...continued from page 15
“I'd try to stay very visible on the showroom floor, and meet as many
customers as possible – both service and sales customers. Plus you
set an example for everyone else.”
Chambers’ Vice President Jim Xaros concurs, adding, “I’d pay a lot
of attention to Service reception. You have an opportunity to reach 50
to 100 people there every day.”
Chambers still walks downstairs to meet customers in the Mercedes-
Benz showroom below his corporate offices. “It takes me 5 minutes,”
he insists. “Nobody is that busy that they can’t take 5 minutes.”
18 february 2008 massachusetts auto dealer www.msada.org