Jim Farley Hits the Road and Cars are Getting Judged and X-rayed

March 15, 2024
Welcome back to the pod Michael Wood, whose dogs are as excited about this show as we are! Today we are looking at the road trip Jim Farley is about to embark on, how customers perceive automakers and dealers, and a car going under the microscope…er, x-ray machine!
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Show Notes with links:

Ford Motor Co. CEO Jim Farley is embarking on a nation-wide "engagement tour" with dealers to discuss key issues including electrification, quality, and affordability. Starting in Dearborn and visiting cities like Los Angeles and Atlanta, the tour aims to gather insights directly from a broad section of Ford's dealer network through 12 in-person meetings.some text

  • Farley, responding to the Ford National Dealer Council's request, aims to understand dealer perspectives on industry challenges, regulatory compliance, EV transitions, and competition. They plan to invite retailers of all sizes, including some who didn't sign up to sell EVs.
  • Joining Farley will be COO Kumar Galhotra, CMO Lisa Materazzo, Ford Model e COO Marin Gjaja, Ford Blue President Andrew Frick and Ford Pro CEO Ted Cannis.
  • “Our quality has gone down as much as our prices have gone up. That has to be addressed.” said O.C. Welch, dealer principal at O.C. Welch Ford-Lincoln in Hardeeville, S.C.
  • Eddie Hall III, COO of Hall Automotive Group said, "I'm used to being a brand for the masses. While I think we have a phenomenal lineup, I still want to be able to sell vehicles to the customers I have been selling to for so long."
  • Sam Pack, president of Sam Pack Automotive Group in Dallas "Jim's very comfortable with the dealer body; he's very open, honest, candid and sincere.. As we go through this transition, the better informed we are, the better decisions we'll make."

Customer satisfaction with dealer services sees a slight improvement in 2024, but parts and labor shortages continue to stretch appointment wait times, as per the latest J.D. Power CSI Study.some text

  • Average wait time for an appointment has risen, with mass market vehicle owners facing a 5.2-day wait, up from 4.8 days in 2023.
  • Costs for dealer visits have jumped 30% in the past two years due to inflation and rising parts and labor costs.
  • ​​Lexus ranks highest in satisfaction with dealer service among premium brands for a third consecutive year, with a score of 897.
  • Buick ranks highest in satisfaction with dealer service among mass market brands with a score of 887. MINI (884) ranks second and Subaru (877) ranks third.
  • “It’s encouraging to see an improvement in service satisfaction but, unfortunately, the capacity and wait time issues have gotten progressively worse since the pandemic and show no immediate signs of easing up,” said Chris Sutton, vice president of automotive retail at J.D. Power. “Excluding Tesla owners, the service experience for BEV owners is underwhelming.”

Mercedes-Benz, in a pioneering collaboration with the Fraunhofer-Institute for High-Speed Dynamics, conducted the world's first X-ray crash test. some text

  • This breakthrough method, utilizing a linear accelerator as an X-ray camera, captured internal car and dummy deformations during a collision at 60 km/h, offering unprecedented insights into the dynamics of vehicular crashes. 
  • The use of high-speed X-ray technology enabled the precise visualization of internal processes, making previously invisible deformations transparent for detailed analysis.
  • The crash test dummy used was a female version, as females are at much higher risk of serious injuries during crashes.
  • From the article: The lead-up to this Mercedes experiment was a crash test of a Lego Technic Porsche 911 GT 3RS, which the scientists crashed into a wall at almost 19 MPH. It’s likely that the test confirmed what we’ve always suspected: Legos are indestructible, which is partially why it hurts so damn much to step on one.

Kyle Mountsier: 0:20

Good morning, Friday, March 15. middle of March halfway through a five Saturday month with talking Farley hitting the road cars getting judged and X rays on vehicle crashes.

Michael Wood: 0:33

Man Who doesn't love a five Saturday?

Kyle Mountsier: 0:36

I'm telling you. Like, I just I get so amped I especially when you when you get a five, Saturday, March or a five, Saturday, August, there's just something unless you've been on the retail side of the car business, you don't know what that feeling is like, you know,

Michael Wood: 0:56

I'm sitting there thinking I'm like, What's the fifth option for lunch this month? I gotta find a new thing to add into the rotation those

Kyle Mountsier: 1:04

Chick fil A, he'd start to run out. Someone ordered spaghetti. The whole afternoon is screwed. You know?

Unknown: 1:12

It's time it's nap time after that.

Kyle Mountsier: 1:17

Oh, man, hey, if you miss the show yesterday, you gotta go listen to the very end of the show. I think I'm saying that Michaels dogs just got excited about the show. Like that's the way I'm spinning Michaels dogs losing their mind at the end of the show yesterday, and

Michael Wood: 1:33

anybody knows me knows that. It's just, you know, perfect that my dogs had to chime in? Of course. Yeah.

Kyle Mountsier: 1:38

That's awesome. That's awesome. Well, hey, we got a lot going on. Today's the last day to get early bird ticket prices for a soda con. So if you've been kind of, you know, oh, I want to go but I'm not sure I definitely am going but I just haven't bought my tickets yet. Save the money. Like we don't want to charge you more. But you know how this whole like pricing increase things goes. It's just the way the world works. So we're so that's what's going on today. We've got, we just want to thank Reynolds and goober goofer throwing down making sure that we can put out an event where we don't have to charge you five grand to come. And yeah, so we'd love to see everyone there for sure. That's about it. Let's get into this. Um, it is gonna be a good time. It's gonna be a great time. Actually, did you know that we are going to have like an f1 simulator racing game with two of them and we're gonna have a whole leaderboard and competition in the whole nine yards.

Michael Wood: 2:34

No, I did not. And I'm super excited. You're like,

Kyle Mountsier: 2:38

what I'm gonna do like five times totally winning that thing. Yeah. Speaking

Michael Wood: 2:42

time, I'm just gonna be in that f1 thing the entire time.

Kyle Mountsier: 2:45

The crew over at Space auto they actually they were pumped about the idea because they did a testimonial video where they put dealers in race cars and made them do their testimonial questions with a racecar driver driving them around like a bunch of turns of tracks and they're like this fits perfect with the way we like to do things. So that'll be right there in the lobby when you come in probably a line and everybody will miss you know Paul and me opening up the whole thing. So it'll be perfect. Why speaking of driving around real fast segway segue into the first story. Ford Motor Company CEO you know him Jim, Jim Farley is embarking on a nationwide what he's calling the engagement tour. Start with dealers to discuss key issues including electrification, quality and affordability. going to be starting in Dearborn and visiting cities like LA Atlanta. The tour aims to gather a bunch of insights from a broad section of Ford dealer network through 12 in person meetings, so 12 out of 3000 going to get the engagement tour. This comes after a response around the NADA timeline of the Ford national dealers Council, to say, hey, look, we really need you to understand what's going on at the ground level. So we think you should take a tour of what's of dealerships going to be visiting will be with the COO Kumar Gotra, the CMO, Lisa Madrazo, Ford Model E, so COO, Marian Joshua for blue President Andrew Frick and Ford pro CEO, Ted Canis. So that bring in the whole thing. Here's a couple quotes from dealers as to what they're experiencing and I want to get your take on this from like how you would feel about this, this type of level coming out to the dealer. So OC Walsh dealer principal of OC wash Ford Lincoln in Cartersville. South Carolina said our quality has gone down as much as our prices have gone up that has to be addressed. Eddie Hall The third CEO of Hall automotive group said I'm used to being a brand for the masses, I think we have a phenomenal lineup. I still want to be able to sell vehicles to customers I've been selling to for so long. And Sam pack President of San pack Automotive Group in Dallas at Jim's very comfortable with the dealer bottle. He's open, honest, candid and sincere. As we go through this transition, the better informed we are the better decisions.

Michael Wood: 5:21

I think it's great. I mean, good on him for doing it. Honestly, I think more CEOs of manufacturers could take, you know, take a lesson from Him and follow suit and do the same thing. You know, I'm reminded of a coffee company that used to be in England, the name escapes me right now. But this predates Starbucks. And they got really big a huge shame. But over time, they kind of lost who they were because they stopped going in and looking at their business from that side of the customer. And we are the CEO, or excuse me, we are the manufacturers, customers, and often in their ivory towers, whether it's in Dearborn or wherever, and they forget what it's like on the ground level. And if they just come to us and have conversations, we want to work together to create a phenomenal experience for the customers. We don't have to work against each other, we have the same goal in Yeah,

Kyle Mountsier: 6:07

I think about the show Undercover Boss, right? And like what that provided to the companies that, that that got the opportunity to be a part of that show. And it just exposes so much that. And I think this is whatever business vertical you're in. And whatever level of management management you are, whether you're the CEO of the manufacturer, or a GM or a GSM, or the parts manager writing the parts ticket order, like the lessening the gap between frontline and, and management or executive is definitely speed to, like, employee satisfaction, customer satisfaction. I mean, I tell I tell dealers all the time and I don't know if you've ever done this, I'm like go change oil once a month, right? Just so that you know what that feels like for that employee. Right?

Michael Wood: 7:02

Yeah, I actually tried to do that one time when I was running the CJR store I had a couple of texts were leaving early. And you know, waiter got missed. So I, you know, take the car I pulled in, I rack it up, I tuck my tie into my shirt, and I lift the car up and I'm like, is somebody gonna come stop me? Because if they don't, I'm gonna destroy this customer's car because I'm not a technician. But thankfully, a couple of Tech's walked over, like what are you doing, boss, and I'm like, what I needed you guys to do. And they came and did it, but no to your point. I mean, I'll sit in the service drive a lot. I don't know how to write service. I never was a service writer. But I'll sit and listen and just observe. I want to see the interactions between my consultants and the customer. I want to see the the roadblocks between the customer and their satisfaction. And you can't do that if I'm sitting in my office. It just doesn't happen. There

Kyle Mountsier: 7:47

it is. Well, speaking of customer satisfaction, segue. Thanks for the softball pitch on that one. Customer satisfaction with dealer services sees a slight improvement in 2024. According to the latest JD Power CSI study, that dropped yesterday, a couple of the key interesting points in this, the average wait time for an appointment actually has risen. So it's gone up with mass market vehicle owners facing a 5.2 day wait up from 4.8 days just a year ago. Costs have also gone up to upwards of 30% in the past two years due to things like inflation, rising parts and labor costs. So the service experience is definitely changing. And I'm sure you're seeing that on the front lines of just like what, what service capacity is out there.

Michael Wood: 8:43

Yeah, if you're if you're in this business right now, and you're not wildly focused on your guest experience on the service side, you're going to end up losing, there's no question with the way that the prices have gone up. You know, my door rates of both stores have gone up quite a few times over the last two or three years. And it's not necessarily to keep up with the Joneses. It's I've had independent shops that were charging more than my franchise dealerships were that made me had to go up in that. But at the end of the day, we also recognize that we can't just raise the price and not raise the level of experience for the customer. That's gonna lead to bad CSI 100% of the time.

Kyle Mountsier: 9:17

Yep. Yeah, I agree. It's like, hey, when you demand more from a pricing perspective, even if it's due to inflation, customers just expect more, and they expect like it's also merging with a customer debt, you know, like a cultural expectation of a high level of service, right? We talk about it so much on our culture that the the, the generic level of expectation is already higher, then you couple on a longer wait to get in and higher prices and all of that and it just escalates this need for a really, really seamless customer experience, especially in the service drive, when they're visiting two, three times a year.

Michael Wood: 9:58

You really don't need any more of a testament than You know, the rise of the popularity of we'll get there and the automotive industry. I mean, he's speaking at the walls regroup. He's going working with Chris Colin dank, obviously I think he's coming to this thing, you know, Soto con or something like that I've heard possibly maybe the keynote speaker there. But if there wasn't this need and desire in the industry for more of an experience, increase lift if you will, he wouldn't be rising in popularity like he is with us. Yep, exactly.

Kyle Mountsier: 10:27

So Chris Sutton, Vice President of automotive retail JD Power said it's encouraging to see an improvement in service satisfaction, but unfortunately the capacity and wait time issues have gotten progressively worse. The other note is that excluding Tesla owners, the service experience for B V owners is extremely underwhelming, so another NIC there. The survey also looks at just the overall satisfaction of brands. So no surprise here Lexus ranks highest and satisfaction with dealer service among premium brands for a third consecutive year with a score of 897 out of 1000. Get this one. Buick ranks highest and satisfaction for dealer service around among mass market brands. With Minnie and Subaru right behind it, check out Buick well, we'll just throw that one who knew? Who knew? Well, who knew manufacturers were actually looking at using x ray technology in crash testing Mercedes Benz has pioneered a collaboration with a Fraunhofer Institute for high speed dynamics conducting the first world's first X ray crash text. This breakthrough method of utilizing a linear accelerator as an x ray camera captured internal car and dummy deformations during a collision at 60 kilometers an hour, offering unprecedented insights in the dynamic of vehicle vehicular crashes. The basically what it allows is for previously invisible deformations transparent for detailed analysis. So like they were able to see micro movements and the deformation of the person or the car. And so like a totally different way of looking at it, not a ton came out of the data yet. There's still a lot to be discovered there. The interesting one is the the lead up to this Mercedes experiment was a crash test of a Lego Technica technic, Porsche 911 GT three Rs, which they crashed into a wall at almost 19 miles an hour. So the the Legos obviously self destructed on impact, but it's kind of funny, like the way they started with this, they like I don't put a real vehicle out there first, for the X ray tests, there's some Legos in there. You know,

Michael Wood: 12:58

I feel like somebody was just making a childhood like dream come true doing that, personally, Hey, before we get on to real work, I need to do this. And I think it's really cool. I think it's a testament to Mercedes as a brand, they just continually will do whatever it takes to make sure that their brand is synonymous with safety. And you know, good on him for doing if your underlying why to buying a car is that you want to save a vehicle. Well, this headline is gonna get you through the front doors of a Mercedes dealership, if you're looking for a luxury car.

Kyle Mountsier: 13:26

That's absolutely and I you, I mean, you even just think of the impact to safety that this is going to have previously everything was the visual identity of what was going on. And obviously, they had high speed cameras that you could slow down the frames per second way deeply. Right. And, but this is a whole nother level of like, what's going on with the body the impact? How is it impacting certain perspective, certain points on the body? I would guess that the IH IHS is looking at this with a high level of scrutiny at scrutiny wondering when can we update our crash test ratings to get more manufacturers trying to figure that stuff out? You know? Well, hey, that's it for crashing Legos at 90 miles an hour today. You really got to get your ticket to ASOTU CON because we know that when conversations and collaboration happen. The industry moves faster.

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