The Arabian Bazaar
See Cover: The curly blond hair suggests Liberace.
the gracefully gesturing hands Bishop Sheen, the aquiline nose, strong chin and steely blue eyes a Marshal Matt Dillon.
But it is the voice that seizes the listener --especially women. Out of the TV set it floats, low and pleasant, friendly and soothing, almost hypnotic. Behind it sits a sharply dressed, broad-shouldered six-footer, flashing smiles with neon-sign regularity and radiating a homeyness rarely found in homes. When the flow of words is finally finished, he looks straight into the listener's eyes and ends with a benison: "God bless you.'1 The man with the magic voice and manner is neither preacher, politician nor gunslinger--though he needs to be a good deal of each in his business. He is James Martin Moran. 42. the ebullient, aggressive and imaginative owner and president of Chicago's Courtesy Motor Sales Inc. To Chicagoans he is known simply as "Jim Moran. the Courtesy Man." Through hard work, hard sell and his TV pitches on behalf of his autos. Jim Moran has built his firm into the nation's biggest auto dealer in business at the same stand and the world's largest Ford dealer.
He has also become something of a TV personality; on the air he has held his own with Bob Hope and Danny Thomas, and in one Chicago poll he outran Ed Sullivan and Steve Allen in popularity.
Moran's biggest assets are an honest face and a folksy manner that send shivers up and down the stitching of many a wallet and purse. He is so effective that rival car dealers are driven to fury when they discover that their own relatives--even their mothers--are singing the praises of "that honest Mr. Moran." Brogue & Braggadocious. Though Moran's career as a dealer has not always encouraged a mother's unquestioning trust, his image as "that honest Mr.
Moran" is so firmly entrenched that competitors accuse him of "brainwashing"' the public. Half Irish and half Italian-German, Jim Moran has a sunny disposition and a natural liking for people--and for their money. To his showrooms from near and far he lures his prospects by constantly repeating and rephrasing his main theme: "We can save you so much money at Courtesy Motors." Never too insistent on correct English, he may add: "This may sound a little braggadocious. ladies and gentlemen"--and it usually is. He has even filmed his pitches from a hospital bed (where he informed his listeners that he was recovering from "an appectdomony"), ending the show by-blowing kisses to his wife and children at home.
Moran has a well-honed staff of 94 salesmen at his six-block complex on Chicago's West Side, but they are only shadows of the master. He personally sells more than 1.000 cars a year. He has an amazing memory for names, can make total strangers feel that he has known them for years. He touches the common chord with a heavy hand, chatting with women about their children, with men about sports. He plays shamelessly on nationalities. If the customer is Irish, he puts on a brogue. If the customer is Jewish or Italian. Moran has a few phrases to match, and he can put on a German accent worthy of Erich von Stroheim.
He also knows how to talk business.
Last year Courtesy Motors, which sells regular Fords, the top-selling compact Falcon.* and Renaults. Peugeots and Triumphs, sold 21.000 cars. 9,000 of them new and 12.000 used. Moran seems to shine with so much sincerity and belief that his cars are best ("the most gorgeous car you have ever seen'') that almost every customer feels he is getting the same deal that Moran would give his own brother--even though competitors claim that it is often no better than car buyers can get elsewhere. Moran treats such claims with royal disdain. "The real crux of the matter," he says modestly, "is that there have been dealers who wanted to get rid of Jim Moran because his personality is so unique." Shared Destiny. If Jim Moran is unique in many ways, he is nonetheless inseparable from the problems, hopes and destiny of the nation's 32,000 new-car dealers (another 25.000 sell only used cars). They hold the key to how soon the U.S. economy will turn upward, for in the spring they usually sell nearly 30% of their new cars. This week dealers greeted spring's arrival with a mixture of hope and apprehension. Inventories still hovered around 1,000,000 cars; some dealers still have 1960 models to sell.
But new-car sales in the first ten days of March rose 12% above the same period in February, though still below March of last year. Ford dealers for the first time in 1961 sold more cars than in the same period a year ago, when much of the nation was hit by a severe blizzard. American Motors announced record high Rambler sales for March's first ten days. For the first time in six months, Chrysler increased production plans, intends to turn out 25% more cars in March "due to continued improvement in retail deliveries and dealer orders." Even the used-car market is improving, and prices rose for the fourth consecutive ten-day period.
"If it stays up in March," says Ford Division General Manager Lee lacocca, "come late April I predict a strong automobile market." Economy at Any Cost. To spur the market, Detroit has some bright new offerings. Ford announced another new compact model, the Falcon Futura, nearly identical outwardly with the Falcon except for large hubcaps and three chevrons on the rear fenders, but introducing an opulent interior, with bucket seats, deep-pile carpeting and all-vinyl upholstery.
Bucket seats seem to be the coming thing; first used in compacts by the Corvair Monza, they will soon be added to Ford's Comet, Chrysler's Lancer and the Buick Special. On April 1 Pontiac will introduce a third model of its compact Tempest; it is a sporty two-door, six-passenger coupe one-half inch lower than the other two Tempests. For 1962, General Motors plans a whole rash of new compact convertibles.
Detroit has a new phrase for the mood the U.S. car buyer is now in: the economy-luxury market. This apparent contradiction in terms is the discovery of Detroit's market research, which on past occasions has proved about as trustworthy as the used car that has presumably been driven only to and from church by an old lady.
First the market researchers told Detroit that the nation wanted big cars with tail fins and plenty of spaghetti; when that proved not to be the case, they told the automakers that the nation was sick of big cars and wanted small, unadorned cars with built-in economy; now Detroit has discovered that Americans want economy all right--but are willing to pay any price to get it. Nearly 30% of the regular Falcon's customers, for example, insist on a 100-h.p. engine instead of the standard 85-h.p.; 50% want white sidewalls, 68% want the "trim kit"--extra chrome on the outside, pleated nylon on the inside, etc.
--at $78 extra.
Detroit would like to create yet another trend. This fall Ford will bring out two new cars as yet unnamed, temporarily called "the Canadian X" and "the Canadian Y." They will fall between the compacts and standard cars in size and price, combine the roominess and utility of the larger cars with a smaller, compact look.
The Canadian X will have a 115 1/2-in.
wheelbase v. Falcon's 109 1/2-in., will become the low end of the standard Ford line. It will be aimed at a mass one-car family market, may eventually replace the standard Ford. The Canadian Y, with a 116 1/2-in. wheelbase. will probably become the smaller Mercury. With its eye on Ford, Chevrolet is also getting ready an in-between car to be called the Corsair, with a wheelbase of 109-in., but added sheet metal that makes it look bigger.
Traffic Jam. All these cars will descend on a market in which there is such a traffic jam of nameplates and models that many a customer is already confused enough. The customer now has 17 standard-sized cars to pick from, most of them with such a welter of models, motors, options and accessories that it is possible to buy a Chevrolet in more than 100,000 different combinations. And compacts are available in 89 models produced under eleven nameplates. Only the small foreign car has not been burgeoning; since the U.S. compacts were introduced, sales of foreign cars have taken a sharp drop. Says A. C. Robbins, a Beverly Hills Chrysler-Plymouth dealer: "The manufacturers are trying to make a car for every $25 of the market." Some dealers complain that this proliferation confuses not only the customer but the salesman, too. Often compacts with different names are remarkably similar. General Motors' Olds F85 and Buick Special both have the same body shell and almost the same motor; Ford's Falcon and Comet have the same engine; the Chrysler Valiant and Lancer are lookalikes. Many dealers not only battle competitors but knock cars made by the same manufacturer. Dodge puts out a "confidential" booklet for Lancer salesmen pointing out the good features of the Lancer and the bad ones of the Valiant--though both are made by Chrysler. Sample comparison: "Lancer; new styling inside and out. Valiant; last year's styling." The Zestful Game. The wealth of car models--and the dearth of sales--has put new zest into that great American game: the battle of wits between car seller and buyer. Once the customer's main interest was in car quality and dealer reliability, and he bargained halfheartedly. Today's customer is sharper, shrewder, better informed. He knows that dealers are overstocked with cars and anxious to sell. Detroit has egged him on with the great registration battle between Ford and Chevrolet; in the last few years dealers have been forced to cut profits drastically just to move their cars. The first question a buyer now asks when he walks into a showroom is: How much below list can I get it for? Result: haggling is in its heyday. Sighs E.C. McAllister, head of his own Mercury-Comet agency in Dallas: "It's like an Arabian bazaar."
The dealer, suspected for years by buyers of having a little larceny in his heart, now complains that it is the buyer who cannot be trusted. Buyers shop around from dealer to dealer, using one man's figures to whipsaw another with. "They stand there with one foot in the door," says one aggrieved dealer, "just waiting to rush to the next place." What is worse, say the dealers, buyers frequently quote fictitious offers to get a better deal. Sometimes when trading in a car, they replace good tires with bad after the deal is set, or strip off seat covers and accessories before turning the car in. Chortled one New York car buyer who had just got a good price on his trade-in: "The car has only one trouble. Every once in a while, it just stops running."
What's Torque? But even in the bazaarlike, haggling auto market, verve and imagination are all too rare. "The trouble with the auto business," says Miami ex-Chevrolet Dealer Anthony Abraham, who sold his dealership this month, "is that nobody really sells automobiles any more. They sell the deal." Many salesmen sit behind a desk pushing a pencil on a pad when they should be out pushing the qualities of the car. Recently a customer walked into a Salt Lake City showroom on a Saturday afternoon, was greeted by two customers who said: "Are you a salesman?" When he said no, one customer sighed, "There doesn't seem to be one"--and both walked out. After searching the place, the newcomer finally found a salesman in a back room--figuring out a deal for a customer on a pad of paper.
"We shopped at six auto dealers.'' adds Cleveland Bakery Foreman W. Kelso Smith. "They had our name and address, but not one followed up with a visit.
You'd think that the way business is.
they'd be out fighting for it." Dealers blame a decline in the quality of salesmen. One Miami salesman, asked by a customer what kind of torque converter a new car had, could only stammer: "I don't know. I've only been here a couple of months." A Drink of Water. On the other hand, some aggressive salesmen use so many tricks and traps to sell the customer--ranging from legitimate gamesmanship to downright shabby conduct--that customers enter a showroom on guard. Sample unscrupulous tactics: P: The highball: the salesman offers an unrealistically high price for the customer's trade-in, then jacks up the price of the new car (often with accessories) to cover the too-high trade-in, or backs off altogether.
P: The lowball: the salesman quotes a rock-bottom price for the new car to win the customer, later hikes up the price, declaring that a mistake has been made or that the quoted price was for another model.
P: The double dip: two salesmen work on a customer, pretending to be in competition with each other. When the first salesman is turned down, another moves in with a better deal. Later, the two split the commission.
P: The bush: the salesman persuades the customer to sign a blank contract after he has agreed to certain terms, then fills in figures different from those agreed on, or adds additional costs for such fictitious items as delivery charge, handling costs and excise tax (which is already included in the price). The bush is illegal in some states.
A variation on the bush is to fill out the contract at the agreed-upon figures, sending the customer away satisfied. Then the salesman calls later and informs the customer that a mistake has been made and that the car will cost more money--figuring that he will pay the difference rather than go through the whole haggle again. Some salesmen try to close a deal by insisting, "I can only get it for you at this price today1'--though they will be glad to quote the same price tomorrow.
Another salesman rushes off into the back room to check the new low, low price with his boss, but often simply goes for a drink of water. He comes back breathless, bearing the news that his boss has lost his mind and agreed.
A good salesman scorns such tricks, content to play on customer psychology.
Salesmen get practice. They do not like to sell a man alone--they know that they will only have to do the job all over again when his wife comes in. If the wife comes in first, many salesmen try to sell her on the car's color and upholstery, quoting her a price considerably above their rock-bottom offer. When the husband comes in later, they boost his ego by letting him force the price down, so he can show his mate that he is the sharp bargainer in the family.
Salesmen must be wary of the husband who knows nothing about mechanics; the trick is to avoid making him look like a boob. To soften the customer who is undecided between two makes, salesmen often slyly deride the competition with such remarks as "Did you ever notice its cheesy dashboard?" In the final, crucial moments of the haggle, they will frequently try to win the customer by offering to throw in a side-view mirror or whitewalls without charge. Salesmen find that men make most of the car-buying decisions, but let wives pick color and interior. A salesman knows that he has a man trapped when a wife stands back, looks fondly at a car and gurgles: "Isn't that cute!" To get the customer into the showroom in the first place, dealers often use "bird dogs"--barbers, service-station operators, or friends who for a fee tip them on car hunters. Less rewarding are "cold spears" --telephone contacts taken from a list of state auto registrations or from telephone books.
Red Jackets--or Else. Like every big dealer, Chicago's Jim Moran knows that the best way to build up a solid list of customers is to become a pillar of the community--and a solid pillar he is. "If a dealer isn't interested in his community," says Moran, "then he's a poor businessman. I think that any place I go, I am an ambassador of Courtesy Motors." Moran belongs to many charitable, civic and religious groups, is a prominent Roman Catholic layman. He coaches a Little League team that last season won a district championship, has run several TV talkathons for charity. If an orphanage burned down, chances are that it would be Jim Moran, the Courtesy Man.
who would start a drive to rebuild it--and chip in conspicuously himself. He is beloved by the clergy for his contributions and for giving them what is generally known as "the clergyman's discount," i.e., cars at cost. He sponsors an annual Lake Michigan endurance swim, spends $1,000,000 a year on advertising.
Once all this hoopla gets the customer in. Moran makes it hard for him to leave without a car. His salesmen are among the most anxious, aggressive and articulate in the Chicago area. They begin in low key, but they breathe harder, talk faster and bargain more shrewdly as the moment of truth approaches. Not even a peddler steps in their door without leaving his name and address, later getting a tenacious and thorough followup.
Moran forces his salesmen to wear maroon jackets, and some have quit rather than do so (chuckles Moran: ''They'd give anything to get out of those red jackets'') He usually fires any salesman who cannot consistently make $250 a week in commissions, but just being around Moran seems to endow most of them with a profitable touch of blarney.
A customer recently mentioned his wife's name to a Moran salesman in the course of looking at a car. "Helen!"' cried the salesman rapturously. "That's the dearest name in all the world to me because that happens to be the name of my wife." "There's the Monster." Moran--whose own wife is Arline--lives in a sprawling, nine-room ranch house in Lincolnwood. a Chicago suburb, with Arline and the three children (two girls, a boy). He has three motorboats. a summer home in the country and a winter home in Florida, and a 30-ft. by 60-ft. swimming pool that he shares with youngsters once a week, hiring a lifeguard to watch over them. He likes to watch himself on one of his six TV sets, greets his twice-weekly taped appearance with "There's the monster." After a scant breakfast. Moran drives to his office in his four-door hardtop Ford Galaxie. riffles through the mail on his 12-ft. desk, then begins his daily tour of his auto empire. He pops into the new-car showroom, opening new-car doors to make sure the interior is clean, checks to see how sales are going. In the service department, he leafs through service orders to see if there is any pattern of complaints that suggest a weakness in a new car. He even drops into the repair waiting room, applying his sunny personality and speeding up someone who has an appointment with the dentist. Says Moran: "There's a million things that nobody asks about but me." Moran, who neither smokes nor drinks, keeps in top shape by leaving the office every day at 2 p.m. for a half-hour. 44-lap swim at the Illinois Athletic Club.
He draws a $150,000 salary from Courtesy Motors, but that is not all he makes.
"If you're in the automobile business today," he says, "and your only profit is in selling new cars, you aren't going to make money. You have to be in insurance, financing, the whole ball of wax." He owns Grand Insurance Corp.. Grand Acceptance Corp., a finance company that will handle one-third of Courtesy's financing by year's end. and Grand Finance Corp..
a small loan company. He also runs Courtesy Lease-Save Plan Inc.. which rents out about 1.200 cars and trucks, took in $1.300.000 in 1960. From these corporations Moran draws another $24.000 a year.
Life to 30 Days. Jim Moran got into business when he was only eight, selling soda pop to Sunday baseball crowds near his home in Chicago's Rogers Park neighborhood. When his father died in the Depression, the twelve-year-old boy took a paper route and an after-school job in a service station to help his mother and sister pay the bills. He never got to college.
Fascinated by cars, he got a job in a service station soon after graduation from high school. Within a few years he had his own service station, beating customers to the pump with a big hello. Drafted in World War II, he got out of the Army with a medical discharge in 1943 (an arthritic condition) and. taking advantage of the car shortage, set up a used-car lot.
He bought a Ford dealership in 1945 from a dealer going out of business, but Ford gave the lucrative franchise to someone else. Moran shopped around until he got Hudson to take him on as a dealer, shifted to a better location, and called his new firm Courtesy Motors. Moran went on TV with other Hudson dealers jointly sponsoring a wrestling match. He made such a hit that he took over the sponsorship and announced his own commercials. After that came a TV variety show of his own, a barn dance and late movies, with Moran making his pitches at intermissions. Before long he was Hudson's No. 1 U.S. dealer, selling more than 10% of the factory's production.
Moran's eager-beaverness got him into trouble. When he began offering a "lifetime guarantee" against defective parts in his cars, customers complained that he met their objections by insisting that parts were worn by age rather than defective. His salesmen were also accused of "bushing." Complaints piled up in a thick file at the Chicago Better Business Bureau. In 1954 Chicago's other Hudson dealers brought an antitrust suit against both Moran and Hudson, charging that Moran got his cars from the factory at a favored price. Moran denied the charges, but the factory made a cash settlement out of court.
When Moran saw that Hudson and its backward styling were about to go under, he switched to Ford--which was now glad to welcome him. In his first month with Ford, he sold an astounding 804 new cars. His reputation also took a turn for the better. He revised his advertising, shrank his lifetime guarantee to a more realistic 30 days. Complaints to the Better Business Bureau have steadily dwindled, last year totaled only 25.
Dog Drivers? Courtesy Motors' sales have risen every year since Moran went with Ford except recession 1958, reached a new record of $41 million last year.
But the company's net earnings were only a meek $117,000. down 55%--reflecting the narrow profit margin a dealer has in today's shopper's market. In 1960 the average dealer's pretax profit margin was only .5%--the second worst year of the last ten. Dealers averaged $22 profit on each new car sold. One result: dealer failures are up 43%. Last week Denver's Bob Jones Skyland Ford Inc., once one of the biggest U.S. Ford dealers, closed its doors, and Cicero, Ill.'s Sterling-Harris Ford Agency faced bankruptcy proceedings.
Many dealers complain bitterly that Detroit has overproduced both in variety of models and cars, forced them to take more cars than they need so that the giants can outsell their competitors. Dealers point to their own slim earnings and to General Motors' 8% net profit last year. "When it became apparent we were in trouble," complains Denver's Bob Jones, "I went to the Ford people and tried to pull this dealership down to 75 units a month. But they said no, that I had to sell 160 new cars and 40 trucks each month. They are going to have to teach cats and dogs to drive to ever sell the number of cars they want to produce and push out on dealers." Nonetheless, counters Ford's Lee lacocca, "the dealers are the first to acclaim you for coming out with new models." Jim Moran says that he takes only as many cars as he wants, adds that dealers have to be firm with Detroit to keep from being overloaded. He also thinks many dealers too rigid on prices. "If they can't sell a car for a $300 or $400 profit," he says, "they won't sell it. If we can only sell a car for $50 profit this month, we have to sell it for $50 profit. Maybe next month we'll have to take $40. Maybe the month after that it will be $100. We have to take what the market will bring." Moran sniffs at dealers who want a factory-fixed fair-price arrangement: "A lot of dealers are sitting around waiting to be legislated into making a living." Poor Service. Many dealers insist that customers make a mistake by shopping around in search of a rock-bottom price; they say that if the customer does not buy from his local dealer, he cannot expect to get good service from him later.
But buyers answer that service is too often lip service, fancy slogans, a brusque shop steward and an indifferent mechanic.
Many a big-city buyer has had such poor experiences with dealer service that he prefers to take his car to the corner service station or even to drive to a small town, where the service is usually better.
"Let's face it," says Sales Manager Joe Bensley of Los Angeles' Bruin Motor Co., "service in most places is lousy." Bensley --who is known for good service--and other dealers blame the factory, complain that Detroit inspects only one in ten cars, sends dealers cars that take two or three days to get into shape, gives them an insufficient allowance to do the job. "The dealer just can't do it in a volume business," says Bensley. "He has to push out cars as fast as he can. The customer finds all kinds of things wrong with the car, and tries to get them fixed. The dealer either won't listen or wants to charge for things that should have been fixed right before the car was sold. The customer has been hooked once, but he'll never buy the same car again." Other dealers blame their troubles on the difficulty of getting good mechanics ("Everyone wants his kid to go to college and not work in a garage"); still others complain that Detroit's warranty allowance on new cars is often not enough to cover the repairs that the customer expects.
On the Carpet. Jim Moran believes that service is the dealer's own responsibility. "This is an area," he says, "that many auto dealers have ignored for some time--and it is the only way you can get repeat business in this competitive market." After each car is sold, Moran sends a form letter to the buyer inviting him to report on his service. He assigns a service superintendent for each new car, calls him on the carpet--and sometimes fires him--if too many things go wrong.
Moran believes that many dealers also neglect the potential of a used-car operation; his brings him in 51.5% of his gross profits. "Any new-car dealer who isn't in the used-car business," he says, "will not continue to be in operation. You cannot sell a new car unless you buy the old car.
The key to the business is being able to sell the used car." He reconditions used cars in a 40,000-sq,-ft, $500,000 plant that he grandly calls "the Courtesy Conditioning Assembly Line." Profits are bigger on the used cars; since each one is different, buyers cannot shop around and compare price.
Merely a Fad? As Ford's biggest customer, Jim Moran takes a vital interest in the company's plans--but he is a man of independent mind. He thinks that the trend to luxury compacts, combined with a trend to greater power, may eventually cause the compact to grow right up again into a bigger, more comfortable car. He considers present compacts--including his hot-selling Falcon--transient fads that will probably win not much more than their present (30%) share of the market.
Moran thinks dealers ought to be consulted when automakers are planning new models. "If I have $4,000,000 invested in my company," he says, "then I should be invited to see what I'm going to have to sell." For Detroit, the proliferation of new cars is a form of gambling, by which auto makers hope to hit on a widely accepted "ideal" car that they can produce in huge quantities, enabling them to drop weaker lines. Weaker dealers, too, are on the way out. Car dealers have decreased from 47,000 in 1951 to the present 32,000 --and even dealers themselves think there are still too many. They expect that there will be fewer dealers and more big "super market" dealers, carrying the full range of cars for the manufacturer. In such a mar ket there will be plenty of business and profit -- for those who survive.
* Which last week placed first in the Mobilgas Economy Run from Los Angeles to Chicago, with an average of 32.68 miles a gallon. Other winners in their classes: Corvair Monza for four and six-cylinder compacts with automatic transmission (29.35 m.p.g.), Buick Special for eight-cylinder compacts (25.09), Plymouth Savoy for standard-sized cars (23.15), Ford Fairlane for low-priced V-8s (21.33), Chrysler Newport for medium-priced eights (19.9), and Cadillac for high-priced eights (18.93).
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