James Zeigler Rates Ralph PagliaDocument Transcript
by : Jim Ziegler
It was a Sunday afternoon, two weeks ago. Tears streamed down my wife’s cheeks as she embraced our son.
This would be the last time she would see him for several months. We’ve never been out of touch with him, and
now, everything has changed. It will never again be the way it was.
Sergeant Payne, the recruiter, stood patiently waiting for everyone to say goodbye. He’s done this many
times… watched hundreds of parents saying goodbye to their sons and daughters. I shook Zach’s hand and
hugged him in a manly fashion… there might possibly have been tears in my eyes… then again, it might have
been my allergies acting up.
Zach turned away and walked to the waiting van. Once the door closed we couldn’t see him through the heavily
tinted windows but we waved anyway as the driver pulled out and the van turned the corner. He was gone.
I’m sure thousands of readers can personally relate to this story, but this was our time. Those of you who have
followed my column through the years have read of Zach’s growing up on these pages. Now, we’re turning still
When Zach finished high school I really thought he’d get into my business and, eventually take over the
company…you know, continue my legacy. But he moved out last May and got an apartment with two of his
high school friends. I shudder to think what they’ve been up to for the last six months. Then, about a month ago
he casually announced he had signed up with the U.S. Army. Well, not exactly just the Army. Being a true
Ziegler (we’re known for over-the-top extremes) he signed up for a program where he’ll transition from basic
training and go directly into a series of schools including jump school and Ranger school…he aced the exam.
My son’s aspiring to become an Airborne Ranger. Imagine that.
I’m writing this on the plane, sitting here in first class, returning home from Las Vegas. I just finished the
keynote speech for the 3rd Digital Dealer Conference & Exposition...I nailed it.
There were more than 400 people in the audience as I delivered my presentation… “It’s time to get serious
about the Internet.” Mike Roscoe did an incredible job of lining up experts to speak and the right mix of
practitioners and industry vendors for the exhibit hall show.
I listened as Cory Mosley gave an extended class on the basics of automotive Internet sales. This guy is
exceptional. I bumped into my friend, Ralph Paglia, with ADP. I consider Ralph to be one of the absolute very
best Internet consultants (geniuses) out there today.
Of course my IT manager, J.C. Hurst, knocked it out of the ballpark with his presentation on search engine
maximization and negative maximization. Nobody is up to his speed on this subject. J.C. wowed the audience. I
heard they lined up in the halls afterward still asking him questions.
My friend, Mike Stewart, introduced the audio/video blogging concept, presenting twice to enthusiastic
I had a chance to visit with an old friend, Doug Kinney and his wife, Yvette. I’ve known Doug a long time from
the retail car business but now he is the national manager of VIN Solutions, an emerging CRM company. Doug
was also a presenter at the conference, unfortunately I had to leave before his breakout.
Truthfully, it is time to get extremely serious about technology-assisted sales and marketing. Customer
relationship management and Internet sales are absolutely essential in today’s retail environment. If you’re not
1 of 6 12/18/2007 9:17 PM
in, you will definitely be out.
I am an advocate of the total virtual sales department…what I call the business communications center concept.
My thinking has evolved to the point where I am advocating an independent department capable of making
deals from A to Z without having to turn over the deal to the bricks and mortar traditional sales department.
With the business communications center concept, all inbound and outbound CRM communications with
customers would be centered here… including telephone and Internet.
I only met him face-to-face once, at the NADA Convention in Las Vegas but I have spoken with him and
exchanged e-mails more frequently. I was extremely saddened to see Cisco Codina announce his retirement
even though it was anticipated…actually, it has been expected for some time now.
Did Alan Mulally and Mark Fields blindfold Cisco and force him to walk the plank at gunpoint? Many dealers
suspect he was forced out because of failure to hit sales objectives.
You know, I’ll be the first to pile on when I feel a manufacturer’s executives are wrong. And when I “pile on,”
it tends to be overkill. My mother used to say that Jimmy would kill a piss ant with a nuclear weapon.
Cisco is a great guy, certainly the dealers’ best friend in Dearborn. He’s always had a reputation of standing by
his word and looking out for dealers’ interests. I really liked this guy. All of that being said, I have substantial
reasons for believing his leaving was entirely voluntary.
Now, don’t get me wrong, he was under extreme pressure to get the numbers up…they all are. Falling short had
to be working on him psychologically. When I spoke to him February 2 at the convention, I was alone with him
for at least 20 minutes before Mark Fields came into the room. I asked him then if he was going to retire (the
rumor was already out there back then) and his answer led me to believe it was a very real possibility. Hey,
Cisco has always been a great guy but he’s a factory guy first. Did you really think he’d give me a straight yes
or no answer to that question?
I had a conversation with Mark Fields last week about Cisco and I asked the same question. He assured me, and
I believe him, Cisco chose this path…there was no ultimatum from upper management. You have to keep
reminding yourself these guys didn’t create the problems they’re now desperately trying to fix. Neither did
Cisco. Fields and Mulally, I really like these guys and I think they’ve made incredible progress considering the
“cluster” they inherited, which was created by that zany herd of inane, arrogant, bumbling, self-absorbed
top-management nincompoops that preceded them (with a few exceptions).
Now, let’s see where they go to fill this position. Regardless, smart money says they’ll go outside the company
to find the talent. I’ve heard Steve Wilhite’s name mentioned now that he’s out at Hyundai. After all, he started
his career at Ford and he’s an extremely competent manager. Personally, I’d love to see them take a hard look at
my friend, Finbarr O’Neill. Too bad Wolfgang Bernhard’s not in the mix here. Regardless, there’s a lot of great
talent available, but Cisco will be missed.
Give a crook a break…
He was found guilty of embezzling more than $100 million dollars from his own corporation and created a huge
illegal political fund to bribe government officials in his own country…and, as non-verified rumor has it he may
have conceivably heavily greased more than one U.S. politician to get clear sailing and concessions for projects
here in the United States. Of course, that is just idle talk floating around.
He was not only convicted but he was sentenced to three years hard time in a Korean prison. Last month,
however, a South Korean appeals court reversed that conviction citing that he was too valuable to the economy
2 of 6 12/18/2007 9:17 PM
to be jailed. I know, if your mind works like my mind does, are you wondering who the hell he greased to get
this court to give him a “get out of jail free card?”
Yup, Alex, the answer is… Who is Chung Mong Koo, chairman of Hyundai?
The appeals judge was quoted as saying… “I could not help (but) worry about the economic danger the country
might face if the accused is put into jail.”
Actually, the judge might have been thinking… “Hot damn! I’ve hit the jackpot now.”
Earlier this year Chung had volunteered to give nearly $900 million to charities as a sign of atonement. We’ll
see if that happens. Maybe the judge’s retirement program is a registered Korean charity, do you think?
He did issue a tough sentence on Chung Mong Koo (damn if I can figure out which one is his first name, I think
The judge stipulated that Chung is not going to be required to serve any time at all…nor is he required to pay a
fine. His sentence for his crimes is that he is going to have to give lectures and write articles on corporate ethics.
So, you see the judge socked it to him…I bet you thought he was going to get away with this scot-free, didn’t
you? Further proof there is no corruption in South Korea.
If you’ll recall, it was just last March in an article titled “Playing with the Short Stack” that I wrote the
“I’ve been writing for the last couple years about the perceived abuses from the top Korean executives toward
American management. I believe the Korean top management at Hyundai and Kia is prejudiced and
discriminatory against its American counterparts. They’ve run off some really talented executives with
contempt and disregard for human dignity, and the way they do it is always degrading and abusive (Bob
Cosmai, Peter Butterfield). The Americans ain’t sticking. Recently, national sales manager, Mark Barnes, and
vice president of marketing, Michelle Cervantez, left the company for other opportunities. Originally, my friend
Finbarr O’Neill was the head of Hyundai North America the first time it did the big numbers.
“Now we’re seeing a dealer rebellion similar to what the Chrysler dealers did with its manufacturer. More and
more, they’re saying we’re not gonna take it anymore. The consensus among dealers seems to be that the new
guy, Steve Wilhite, the current COO, is the right man for the job...and dealers are angrily warning the Koreans
to back off and leave them alone. I’m serious...there is some very vocal discontent and rebellion bubbling
among Hyundai dealers. And, I’ll tell you what...the Koreans need to lay low and be nice. One message they’re
sending back to Korea is we’ve had all we’re going to take.”
Well, that’s what I wrote last March after the convention. I joked in articles and speeches that Wilhite wouldn’t
be around long enough to make anything meaningful happen…the Koreans are just too full of themselves…as
in arrogant and prejudiced against Americans (my opinion, of course). I said he was not going to last a year and
damn if he didn’t make it 13 months just to prove me wrong.
I also said market share would suffer if they continued on their (Korean top management’s) stoopid business
plan to take on Camry and Accord heads up in a higher priced segment. They took their eye off of the ball and
abandoned core competency, which is low-priced high-quality cars.
Well, now, as predicted, Steve Wilhite has resigned as COO of Hyundai Motor America. Unlike Cisco Codina’s
departure at Ford, I believe there was a sword poking Wilhite in the back as he marched off the end of the
3 of 6 12/18/2007 9:17 PM
Like I’ve said repeatedly, Steve is a good manager but the Koreans have set such asinine goals for North
American sales looking for 555,000 units in a down and shrinking market. Last spring, Dong Jin Kim, CEO of
Hyundai Motor Company, told reporters he was absolutely certain Hyundai would hit those numbers.
Excuse me, Ziegler here…“Nobody is going to hit those numbers with Hyundai at this point in history. You
can’t beat your executives or your dealers hard enough to sell more than half a million units in today’s market.”
“Steve has made many contributions during his time at Hyundai Motor America. We wish him the best in his
future endeavors” was the official commentary from Ok Suk Koh, CEO of Hyundai North America.
I’m positively certain that he wasn’t thinking… “Eat maggots and die, Yankee Dog.”
Well, there are no immediate plans to replace Steve. As I’ve read in the industry press, Ok Suk is going to run
the sales department himself. Oh well, I predict this will be comical and tragic.
I think that, perhaps, Chung Mong Koo, Ok Suk Koh, and Dong Jin Kim might need to revise their thinking.
(Would it be hilarious if Beavis and Butthead did a show about those names? Heh-heh-heh)
Jim Press at Chrysler
Those guys and gals at Cerberus continue to amaze me. If you’ll remember, my initial impression of this
company was extremely positive. I was its biggest cheerleader. Then, all of a sudden, they shifted gears.
Wolfgang was out and Nardelli was in charge. My initial impression was negative…I felt betrayed and
deceived. A little research on Nardelli magnified that distrust.
Then Nardelli comes out mostly saying the right things and making some really dealer-friendly moves. In the
back of my mind I’m still skeptical. I really want to like these people and rally around the cause, but you’ve got
to remember they still have to get rid of nearly half of their dealer body. I have no issue with that…it’s totally
necessary. The question is… “How are they going to do it?” Until that issue comes to the surface, I’ll reserve
A little publicized, out-front factoid is that former vice president, Dan Quayle, is the chairman of Global
Investments at Cerberus Capital management…one of the top dogs. Oh, don’t take that as a negative comment,
I’ve always thought Dan was always an extremely competent businessman who was wrongly degraded by an
extremely liberal press. Now he’s in charge of a multi-billion-dollar investment fund…and he was instrumental
in putting the DaimlerChrysler deal together.
Speaking of “The Press”…here’s where it gets bizarre. Jim Press, after nearly 38 years with Toyota…a legend
in our industry, suddenly shows up at Cerberus. Now, we’ll find out once and for all… “Did Jim Press make
Toyota…or did Toyota make Jim Press?”
Regardless, Press is the right guy at the right place, at the right time…again. If Cerberus is going to have to
make some tough decisions and cut nearly half of its dealers, doesn’t it make sense to have a guy with Jim
Press’s credentials for dealer relations and smart marketing in a key position?
If Nardelli is indeed the “hatchet man”…then Jim Press is “the repairman”…as in “damage control.”
I’ll continue to watch and comment. Right now, I really don’t know these people like I do other top executives
with other major manufacturers, but I’m getting a feel for where they’re headed. Keep those calls and e-mails
Now we’ll find out if GM has the ability to kick ass with the playing field closer to being leveled.
4 of 6 12/18/2007 9:17 PM
I’m not going to waste a lot of ink going over the fine points of the contract between UAW and General Motors.
That information is all over the news. What I will do here is comment on what I see happening as a result of the
short-term and long-term ramifications in this volatile, competitive environment, especially the war between
Toyota and General Motors.
Five years ago, General Motors had to make $7 billion in revenues before it even began to make a profit.
Legacy debt to the union was strangling it. With foreign governments manipulating its currency exchange rate
and foreign manufacturers operating non-union plants, General Motors didn’t stand a chance, but even in spite
of those handicaps it was able to restructure and fight back.
Now, the new contract puts GM within $3 an hour of what Toyota pays its workers…with greatly reduced,
diminishing and disappearing legacy debt.
So, I’ll readily admit Toyota is a great company with incredible efficiencies… and don’t discount Honda, it is
coming on like juggernauts…but I predict GM will recapture a lot of past glory and increased market share. It
has got great product in the pipeline, competent executives at the helm, and now it has bought some breathing
room. This dogfight ain’t over yet.
You know the GM/UAW contract made concessions on both sides. GM ended up buying its way out of a lot of
Traditionally, once a Detroit manufacturer has negotiated a contract, the other two manufacturers generally go
with an identical contract, or do they? I am writing this on October 3, and it may have already happened by the
time you read this, but I predict that Ford and Chrysler are going to go against the pattern and negotiate their
own UAW agreements…maybe even tougher than GM’s agreement. This would set precedent if it happens.
Remember, the union went on strike for two days during the GM negotiation. Excuse me, I believe that was a
bone that GM threw their way. The strike was more symbolic than actual…it was the union’s way of trying
save face and make it still appear to be a powerful entity.
Oh well, we’ll see.
I’m finishing up this article in a hotel room in Fayetteville, North Carolina. In two hours I am speaking to the
Fayetteville Chamber of Commerce on how to grow a small business.
At the airport, before I flew in here yesterday I was talking to a man in the Delta Crown room, bragging about
how my son had joined the Army and was aspiring to become an Airborne Ranger, the elite of the elite. Many
young men and women go for it…and many of them wash out and don’t make it. Regardless, my boy is going
for it and, whether he makes it or not, I’m proud already.
Well there was a woman listening in on our conversation seated nearby. She felt compelled to say… “I would
never let my boy join the Army.”
I just looked at her with one eyebrow raised in my signature Ziegler sneer and I said, “That’s okay lady, my
son’s tough enough to defend you and your wimpy-assed kid.”
Until next time…keep those calls and e-mails coming.
Jim Ziegler is the president of Ziegler Supersystems, Inc.
5 of 6 12/18/2007 9:17 PM
6 of 6 12/18/2007 9:17 PM