1970’s Toyota Wait Lists, Stability Of Retail Auto, Tesla Bumps Prices

January 24, 2023
Throttle down with us this Tuesday as we talk about the benefits of “legacy” in our conversations about broad stability in Retail Auto as opposed to much of the popular workplace narratives.
Listen On
  • Today’s theme is ‘stability’

  • Steve Gates started selling Toyota’s in high school…over 50 years ago. He’s now the dealer principal of Gates Auto Family, a group of 11 rooftops in Kentucky, Tennessee and Indiana that includes three Toyota stores. When the pandemic started he didn’t think there was any way they could survive with no ground stock
  • Then he remembered selling Toyota’s with his dad in the 70’s, much the same way as today when a $25 deposit would reserve you a soon to be built Toyota
  • After spending many years on the board, Gates is now the Chairman of the Toyota National Dealer Advisory Council 
  • "I would love to get younger dealers involved in dealer council because it is vital," Gates said. "We don't need guys that are 70 years old on dealer council — we need 30-year-old dealers. And so that's one of the things I hope to be able to do, is convince men and women to get involved in dealer council."

  • Big tech layoffs continue as Google and Spotify enter the mix
  • Google, known for its profitability and current $100B cash reserve, high pay and lavish perks announced the layoffs of 12,000 people via a sudden and unexpected email on Friday. The largest in the company’s history
  • Yesterday the company with over 180k employees had an all-hands meeting where Executives and CEO Sundar Pichai responded empathetically but also offered counter arguments to employee comments including:
  • Two employees asked for ‘psychological safety’ to which the response was: "If you interpret psychological safety as removing all uncertainty, we can't do this," said Philipp Schindler, Google's chief business officer.”
  • One Googler questioned the accountability of the leadership "Responsibility without consequence seems like an empty platitude. Is leadership foregoing bonuses and pay raises this year? Will anyone be stepping down?"Pichai said Google executives would take a "very significant reduction in their annual bonus."
  • Spotify also announced an overall 6% reduction in its workforce as 600 of the companies 9000+ employees will be let go from across the company
  • Ambitious spending during the pandemic is cited by CEO Daniel Ek “Over the last few months we’ve made a considerable effort to rein-in costs, but it simply hasn’t been enough,”. “So while it is clear this path is the right one for Spotify, it doesn’t make it any easier.”
  • Operating expenses were twice their revenue last year
  • Chief content officer role will also be eliminated

  • After a recent and significant price decrease of $13k just over a week ago, Tesla is now raising the price of its popular Modely Y Long Range
  • As of right now the price of the Model Y is $500 dollars higher than it was still allowing it to qualify for the federal tax incentive…unless you want red
  • Selecting the red multi-coat paint color or the most expensive 20” wheel package would put you over the incentive limit

SPEAKERS

Kyle Mountsier, Paul Daly


Paul Daly  00:27

It's very rare that I wake up and get into my first hour of the day as kind of enthusiastic as I am today. The hat's already backwards. We're going to talk about stability today. And of course, nada. Of course, people really want to know who is and who wouldn't they see nine times out of 10, when I show up on a live stream with my hat backwards, who also has his backwards and vice versa. I'm surprised your hat isn't backwards already. Usually, this is an end of day,


Kyle Mountsier  00:55

like I'm trying to keep it right right now. Right. But I know like within the next hour, hour and a half, there's only like so much that we can get done today before we get wheels up tomorrow. And like, I know there's going to be I'm trying to keep it stable for a minute. Because I know once I go backwards, it's good.


Paul Daly  01:18

Well, if you didn't hear nada is only two days away. Kyle and I are wheels up early, early tomorrow morning, ready to rock and the asoto team is going to be in full effect. Again. We'll say it again. We're bringing the show to you. We know that only 30,000 out of 2 million people can make it which means according to my math I didn't do well. I did okay math. But there are more people watching and listening than there are attending. Therefore we don't think it's cool that you'd miss out and just see all the selfie pics and think that nada is just for other people nada is for you. If you're in the OT,


Kyle Mountsier  01:50

I went like this actually, this morning, my kids were like, What are you going to be doing? And I pulled out my phone and I was like, here's our nada page which you can find it a Soto nada. And I was like, well, first we start with a live stream and I just started scrolling and they were like, Damn, that's a lot. And I was like, that's


Paul Daly  02:07

about a third of it. We live in. Yeah, cuz if you think about it, Kyle and I, especially on Thursday, we're splitting up with two separate production teams. So I mean, if you're going to JD Power, Kyle's going to be right there out front. If you go to automotive news costs gonna be right there out front with a full production team, make sure you talk to I'm going to be at the auto Team America event. And people are going to think that asoto is everywhere. All that translated to say, go to a so to nada.com, you can check our full schedule, live screen stream scheduled production schedule. And also, you can link up to all of our social media accounts. And that is how you'll get the real on the ground in the dirt mentality through social stories and content again, because we have two other social media content producers out we have two writers. Our goal is that no one in this entire industry feels like they missed out on nada, right? That's it. So we're rolling in heavy if you're an industry partner or sponsor, demand is really high, but we'd love to stop by your booth. Send us a DM send us a LinkedIn we have some things available for you again, so you can help get your message out to these beautiful people who will or won't be at NAB A is a you go.


03:16

Look, we've got a little content out for you today at noon. Today we'll have a auto collabs episode we're rolling with Alan crutch good friend of the family here at a soda. It's gonna be on LinkedIn, Facebook, YouTube, Twitter, all the whole nine yards, where you can catch the audio podcast. Wherever you catch your audio podcast.


Paul Daly  03:35

Good morning, friends, cars on the move. Good to see you this morning. We'll see you at nada Jason. Good morning. Hope you're ready to crush it this morning. Thank you so much for the people who check in on the live stream. If you don't know and you just listen to the podcast. We actually live stream the video version so you can watch us be goofballs in person like with their faces and everything. And we appreciate all of you. Let's talk about a little news today. Today we're doing something we've never done before. There is a theme. We're following a theme today. Usually we pick a few stories and retail and automotive. Today we're just going to follow a theme and today's theme is stability. We're going to tell you talk about stability in light of the news. So here's the first story Steve Gates started selling Toyotas when he was in high school, and that was over 50 years ago. He's now the dealer principal of gates auto family 11 store group and Kentucky, Tennessee and Indiana and three of their stores are Toyota stores. And when the pandemic started, he said he didn't think there was any way they could survive with no ground stock. But then he tells us great sorrow in the 70s back in the day is like before you and I were things we weren't things in the 70s We were just not there. 79 I came rockin 79. So today, back then, you needed to put a $25 deposit down to reserve a Toyota because there was no ground stock. Right about that. Not much difference. Why a little more than $25 today.


Kyle Mountsier  04:58

It's a little bit more than $25 And the US is still unique in the fact that we are we are not reserving vehicle culture. I mean, I was actually talking to Matt Jones of TrueCar earlier this week. And he was like, yeah, he was in Europe, everybody. So it's four to six months before you get a car. That's just the way that they do it. So it is it's, yeah, so like,


Paul Daly  05:19

America, we want it now.


Kyle Mountsier  05:20

I love the fact that there's like a cyclical cyclical nature thing to this, you know, and so that's a big deal.


Paul Daly  05:27

So, so he is now actually he's on the the chairman of the board of the Toyota national dealer Advisory Council. And he had some great things to say about Toyota. And about the next generations of dealers, he says this, I would love to get younger dealers involved and dealer counselor, because it's vital. We don't need guys that are 70 years old, on the dealer, council shop fired, we need year old dealers. And so that's one of the things I hope to be able to do is convince men and women to get involved in dealer Council. Yo,


Kyle Mountsier  05:58

I love it.


Paul Daly  05:59

Nick, Steve Gates,


Kyle Mountsier  06:01

this is these is my people. No, but I think I think we need both the beauty and going to the theme of stability, the beauty of having people that have been in the industry for a long time that have seen it. Like I keep asking people that have been in the industry, tell me about the cyclical nature of the things that we are dealing with right now the pandemic, the recession, all of these things, it gives you a groundedness. But also the energy of the younger generation gives you the ability to go what's on the horizon? What are we looking out for? what's new, what's inventive, what's exciting? How are we perceiving customers, and the balance of those two scales, I think is the best way for dealer councils, you said when he groups, whatever the balance of that keeps the stability in the industry, and that's why the stock price of the major public's and the profitability of the private dealer groups is still steady.


Paul Daly  06:51

That's so you know, a common theme of the last few years has been how can we incorporate more diversity into leadership roles into the dealer world that includes and is rarely talked about? age diversity? Yep. Right is critical. I think just naturally speaking, like you said, we're going to have the 70 year olds and the 60 year olds and the, you know, the first gender, that's going to happen, why? Because they have wisdom, but like, let's follow some precedent here. It's like, you need the wisdom. And you need the energy you need them both right? We all can't have both like Brian benstock and wake up in the morning, run through a wall and eat nuts and bolts for breakfast. Just can't do it. So there you go. So we're gonna counterpoint a little bit. So that is kind of the essence of stability in automotive and speaking a little more of stability or the opposite thereof. Segue. So big tech layoffs are continuing. We haven't talked about them yet on the show, because we tried to keep it positive, but we need a little contrast. big lift. Big tech layoffs continue as Google and Spotify now enter the mix Google, who is known for its massive profitability, they're actually sitting on $100 billion in cash right now. They're also known for hype. That was a great they're known for high pay paying above average, for the roles that they hire for the known for that and also for lavish perks. We've all seen the lavish Google perks, they announced 12,000 person layoff via a sudden and unexpected email on Friday. This is the largest layoff in the company's history. They had an all hands meeting yesterday, which what does an all hands meeting look like for a company with 180,000 employees? I don't know of its servers were clocking in overtime. Basically, executives and their CEO, Sundar, how do you say his last name?


Kyle Mountsier  08:33

No clue.


Paul Daly  08:34

I thought I thought Shy, shy. I just call them Sundar. Every time Sundar. They all responded. He responded very empathetically, but also offered, he and the executive team offered counter arguments to some employee comments. So two employees asked for some psychological safety to which the response was and so like, yeah, that's one of those things were like, well, how are you gonna handle this? Right? Because all different types of people all different types of upbringings and feelings. He says, If you interpret psychological safety as removing all uncertainty, we can't do this. I was like, Oh, that was the film. Very like Google's face. If you interpret it as like, you can never deal with uncertainty in life. He's like, I just got nothing for you. So one Googler questioned the accountability, the leadership, right? Because they did say we expanded too quickly. We hired too aggressively and no, and the comment was responsibility without consequence seems like an empty platitude is leadership for going bonuses or pay raises. Will anybody be stepping down? So Sundar responded, all the executives are taking a very significant reduction in their pay as well. So spreading the accountability a little bit. Also, Spotify announced a 6% reduction in its workforce. 600 folks are going to be let go of the company's 9000 employees. And you know, SR CEO Daniel Eck very familiar statement says over the last few months, we've made a considerable effort to rein in costs right cost cutting is being talked about across the board, but it has hasn't been enough. Their operating expenses were double their revenue in 2022.


Kyle Mountsier  10:07

Wow, sing about that. Yeah. And that that's a wild proposition. And I get it because like podcasts were springing up like wildfire 1920 21 up there. We did our part in 2022, though we did our part two, okay. We weren't we're trying to help out the Spotify audience. But they were springing up like crazy. And an even Spotify spent a ton of money on, like specific podcasting. And and, and like large shows, and to not see the revenue come to fruition from an ADS perspective is that's a big ask. Now, I think that they're I don't know, the Spotify cash position, but I I'm guessing it's not in the same cash position as Google. But I don't know the types of roles that they're getting rid of, but over 12,000 people, if I average that to $150,000, salary and benefits, which is maybe a little low for Google, because I know that they they pay higher, and depending on the types of roles that they that they're getting rid of, but like, that's $1.8 billion,


Paul Daly  11:08

which is a problem.


Kyle Mountsier  11:11

That's just like it sounds. That's 2% of the total cash reserve of the company. So I mean, I don't know what lengths go through this. But I still think that they're that this balance of stability that we're coming back to is if the stability is based in the cash position, then how do you leverage those 12,000 people to become inventive, or maybe they just aren't inventive. And there's a deeper reason than just the layoffs, because I would I would suspect that $1.8 billion in employee revenue, if you encourage those employees to be more inventive, could put through good or employee expenses could produce more revenue in the end. But hey, look, I'm not a CEO of a company with $100 billion in cash reserves. So


Paul Daly  11:53

yes, a little bit. Yeah, it's kind of so yeah. I love it. But another another part of the contrast is, these are the conversations we're not having in amongst retail auto dealers. Yep. When you talk about stability, and holding it down in the midst of upturn up swings, and downturns and crises, and all these things, guess what? Retail Automotive is a really great place to build a career and a life. And we champion that all the time. This part, this point is just another point in history. And if you go back through all their cycles, where they've been mass layoffs, and retail automotive has never been in the middle of them, retail auto dealers have never been in that. So if there was ever a time to lean into a career, if you're new to retail, automotive, dig in, learn as much as you can serve people, because you're not going to get that email history shows us you're not going to get that surprise email. If anything, you're going to have opportunity to keep growing in times of downturn, because this is a very staple, is very staple of our economy. Finally, one more is it's not anecdotal. It's freaking of


Kyle Mountsier  13:01

staples of our podcast,


Paul Daly  13:04

I guess. You know, it's really tough to navigate the news, especially in automotive and not talk about Elon Musk, or Tesla, you know, several times a week. So, you know, we tried to keep it balanced. But today, Oh, what happened? What's happening with that? Well, you know,


Kyle Mountsier  13:22

and over there, you heard a couple of weeks ago, that that Tesla was dropping the prices up to $13,000 across their vehicles, specifically on its model Y the long range, and it dropped it dipped right below that tax incentive opportunity, so that people can take advantage of the discount, rebate, whatever you want to call it, as well as the tax incentive, the federal tax incentive, but right now, they have bumped that price just $500 Now, it's not nothing to write home about. But I will say the interesting thing about this is that the model why because it's a delivery type vehicle and they are delivering these and not unground stock moving that price 13 grand and the volatility of up 500 Very interesting, you can still qualify for the tax incentive at the low end. But if you drop that red paint color and the fancy 20 inch wheels, you're over the limit and you got to pay all the money and get no taxes.


Paul Daly  14:12

That's an expensive Yeah, so like the tri coat red color. Just if you well, you can attach any color and the 20 inch wheels and you can still be under it. But if you really need rent, if you really need the red, it pushes you over or you really need the mote the fanciest 20 inch wheels also pushes you over so it's whatever they cost plus $7,500 Right. I think I think people are gonna be real satisfied with like black gray silver. Yeah.


Kyle Mountsier  14:41

Because a lot of silver Tesla's rolling blue


Paul Daly  14:45

I don't think no blue, no green.


Kyle Mountsier  14:49

No, no, thank goodness.


Paul Daly  14:53

We don't need more green cars. I mean, they're very few greens that are the thing I don't know we won't get into that. So matter of taste if you have like a really bright electric green card. God bless you. God bless you do your thing. I mean, so that's really the time we have today because if we didn't mention it, NAB is coming up. Go to a show to nada.com see where we're gonna be if you can't be there, we still want you to be there. We're gonna work hard. We'll see you tomorrow.

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