‘We are at a Pivotal Moment In Our Nation’s Energy History’
Mike Jackson Chairman and CEO of AutoNation met with Anne Thompson, Chief Environmental Correspondent of NBC News – in Ft. Lauderdale Florida - to discuss the future of energy conservation in the United States.
Mr. Jackson explained to Ms. Thompson, “we have the technology to achieve higher fuel efficiency, but if gas is ‘cheap’, people will not pay for fuel efficiency.” Now that gas prices are high, above $4.00 per gallon, AutoNation’s 300 plus dealerships are seeing a “stampede” to smaller more fuel-efficient cars.
“High gas prices will bring more conservation, and low gas prices won’t. And, if gasoline is cheap AutoNation cannot sell fuel efficiency”. We can sell fuel efficiency but only with high gas prices.” Mr. Jackson goes on to say.
Both Presidential candidates seem to agree, that solving our energy crisis and eliminating our dependence on foreign oil, should be a ‘top priority’ for the United States and critical for the Nation, but Mr. Jackson indicated that the presidential candidates should tell the voters the “truth” that, in order to cut greenhouse gases, we must have more fuel efficient cars in the US transportation fleet. “ We cannot on the one hand talk about reducing ‘Global Warming’ and then talk about cheaper gas.”
Lester Brown head of the Earth Policy Institute agrees. We need ‘almost a wartime’ mobilization, to move the nation to more fuel efficiency. Introducing plug-in hybrid cars is critical, and Mr. Jackson expects to be selling electric cars within five years.
‘We need a different kind of consumer who is willing to pay more money for smaller more fuel-efficient engines. This will be a big change in American thinking, but it would put the Nation on the road to energy independence.’
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Mr. Timmons ......AutoNation
"We just want to CONGRATULATE your exemplary staff - Aaron Webb and Gary
Cancinos and AutoNation as a whole for the superb service they provided to us in our purchase of a new vehicle."
"It is truly rare these days to find someone who really cares about giving their very best in service to their customer. Obviously, AutoNation hires the cream of the crop and assures that the people dealing with prospective buyers know the business and actually care about serving their customers. There are way too many car dealerships who are NIGHTMARES to the buyer and people in general dread the purchaseof a new or used vehicle because of the vultures they encounter. We had just that experience with another dealership and their buying program through another major company. We had made it perfectly clear that we were dealing with two buying programs and would choose the vehicle and the buying program based on finding what we wanted and also obtaining the best possible deal."
"The person who originally contacted us through this other company handed us off to a "vulture" who had NO CLUE about the buying program pricing and no desire to place us in the vehicle of OUR choice, but rather the one he had available. He proceeded to deny returning our keys to us as he said "I know we can make a deal now." NOT...We could not get him to understand that fact until we threatened to contact the police if our keys were not returned in five minutes. We left with a very bad taste in our mouths for this dealership and their unethical practices. We also notified the buying program and told them we would NEVER use them after this bad experience and would tell our friends and relatives to steer clear of both the dealer and the buying program. That incident occurred on Wednesday night."
Thursday morning, a breath of fresh air blew in...Aaron Webb!
" What a difference from the way we were treated the previous day! Aaron had contacted us promptly after we registered online with UPROMISE and sought to find out what we were looking for and how he could assist us. Once we narrowed down the vehicle we were interested in, Aaron went to work to find it for us. We had two colors in mind and when the first was not available, he located the second and proceeded to pave the way for the most efficient and EASY purchase of a vehicle EVER. He had his work cut out for him as we had already applied for NMAC online and had been turned down. We then went to UPROMISE and applied for their financing. It was immediately approved and the blank check was to be sent out today. When Aaron saw the interest rate they offered us, he offered to step in and take our information and find us a better deal. He did not have to do that...we had financing and he could have sat back and just said...it is a done deal. "
"However, Aaron went the extra mile for us and worked very hard to secure the 2.9% and the $1,000 rebate from Nissan. He worked tirelessly with me ALL DAY long to get all the information and have the vehicle of our choice available and ready for delivery Thursday night. What an incredible employee you have in Aaron Webb! He got it done in one day and it was SEAMLESS! He referred us to Gary Cancinos for delivery and again we have nothing but praise for the process. Gary greeted us and first things first had us check out the vehicle and have George Harbin (Maroone) go over all the fundamentals of the operation and set up Bluetooth for our cell phones etc. George was amazing...He also went above and beyond in getting the car put into the garage out of the heat and weather for us to see and learn about. He transferred our license plate and assisted Gary in the delivery of the most beautiful Nissan we have even seen. We then went back in with Gary who had everything incredibly organized and color coded for signing. It was again seamless and smooth and we were in and out with our new car in record time. Even the receptionist was eager to assist with our receipt even when it was late and time for her to leave. Everyone had smiles and really portrayed a caring attitude about doing business with us."
"AutoNation has secured our business from here on out and the UPROMISE program will also be given this information as well. We know that companies hear all the bad stuff and complaints on a regular basis, but we feel that praise for an excellent job should be given when everyone goes the extra mile to assist a customer. Aaron, Gary and George all deserve the ultimate in praise for excellent service and concern for their customers. They are all truly assets to the AutoNation team in every way."
"MANY, MANY THANKS to Aaron, Gary, George and the AutoNation Direct team for being the very BEST in the automotive sales field."
Wall Street Journal June 9, 2008; Page D10
AutoNation CEO Says Increase Will Drive Demand For Hybrids, Electric Cars and Other Alternatives
…….Detroit's big auto makers are slashing jobs, closing factories and undertaking costly revamps of their product strategies to cope with $4 a gallon gas. What's the worst thing that could happen now? Gas could get cheap again, says the man who runs America's biggest auto retailer.
"For once we actually have viable alternatives and exciting technology that are really game changers" in the effort to wean transportation from petroleum, says Mike Jackson, chairman and chief executive officer of AutoNation Inc. "However, if the price of petroleum goes down … it undercuts the viability of new technology."
"You have to tell the American people the truth," he says. "Energy costs will be higher."
It might seem odd that America's leading car salesman would want gasoline prices to stay high, given how much damage the recent surge in pump prices has done to demand for the big sport-utility vehicles and pickups that once powered sales at many AutoNation stores.
But Mr. Jackson's point of view about energy policy and the auto industry isn't based on concerns about this month's sales. What has him worried, he says, is that in the future he -- and by extension the whole auto industry -- will be stuck trying to make sense of a fundamentally incoherent national energy strategy, which was mirrored by the seemingly incoherent product strategies that the big U.S. auto makers were pursuing until $130 a barrel oil blew them up.
Mr. Jackson confronts a daunting challenge trying to read American culture and make intelligent bets about what consumers will want to drive.
If he looks in one direction, he sees a widespread consensus that, for a combination of environmental and national security reasons, Americans should consume less oil. To that end, Americans want the auto industry to speed production of electric vehicles and high-mileage, gasoline-electric hybrids, while substantially improving the mileage of conventional oil-powered cars.
Here's the big news: The auto industry finally appears willing and eager to respond.
It's entirely possible that a decade from now, we'll realize that this was a pivotal moment in the auto industry's history. This could be the moment when a century of relying almost exclusively on petroleum to power personal mobility gives way to a new model, in which electricity powers our transportation.
Indeed, there's a case that consumers who want to buy into the next generation of transportation technology shouldn't buy a new car until 2010 or 2011. By then, General Motors Corp. has promised to deliver its hybrid-electric Chevrolet Volt; Nissan Motor Corp. has said it will begin offering electric cars; Honda Motor Co. and several European manufacturers have promised to launch in the U.S. new, advanced, high-mileage clean diesel cars; and Toyota Motor Corp. might have a whole family of hybrid vehicles based on the next generation Toyota Prius.
A gaggle of small companies such as Norway's Think Global AS and Silicon Valley's Tesla Motors Inc. are all gearing up to expand the electric vehicle market if the big guys won't. But the excitement over projects like the Tesla Roadster can't compare to the significance of the shift in mindset among the people who run the world's biggest auto companies. This isn't a crowd given to green idealism, but they have come to the conclusion that remaining totally shackled to petroleum is bad for business and are re-gearing their future vehicle plans accordingly.
But when Mr. Jackson looks in the other direction he sees a widespread consensus that Americans shouldn't have to pay $4 a gallon or more for gasoline, and a Congress that in an election year has put driving down gas prices at the top of its agenda.
Further, he confronts the inertia of more than half a century of automotive marketing investment in teaching consumers that size and power are what make a vehicle desirable, and worth more money.
Mr. Jackson, like others of his baby boom generation, remembers well what happened in the 1980s, after the last big oil price shock. Through a combination of conservation and new production, the U.S. turned the tables on the oil producers. Gas prices plunged, sales of gas guzzlers took off and the table was set for the crisis the U.S. auto industry faces today.
"We are highly skilled at selling size, horsepower and speed at a premium price, and giving away fuel efficiency," Mr. Jackson says. "Now, going forward over the next 10 years we are going to have to convince consumers why they should pay more for a smaller engine…or some new technology that is going to give them a tremendous benefit on fuel efficiency. That's a completely new world for us."
"I'm a good car salesman," Mr. Jackson says. "If I have high gas prices and an open-minded consumer, it's very doable. There is a connection between their needs and what we have to offer them. If we have cheap gasoline, it's mission impossible."
Mike Jackson Chairman and CEO of AutoNation appeared today on Bloomberg Television to comment on the action taken by the Federal Reserve Board in leaving interest rates “unchanged” at 2.0 percent. “The Fed has done a lot to bring rates down to these levels, and we can understand why the Federal Reserve Board took the action that it did by maintaining the current rate target though, an additional rate cut would have been helpful. But, the call for higher interest rates now, by the inflation hawks, is definitely “premature” and unthinkable; particularly since the previous rate cuts have not had enough time to have their full effect on the economy to date. There should be no need to raise rates at least until the end of this year and possibly not even until the first quarter of next year. " "We still have a housing depression, a bank credit crisis, high gas prices at the pump, and currently no wage inflation expectations.” Auto retail sales are down "double digits". The days are over when the consumer could use equity in their house to purchase a needed vehicle, and commercial credit is “tightening”; making it difficult for the necessary purchase of a “big ticket item” such as a car. To raise interest rates now would definately be the wrong thing to do. Though interest rates are low at this time, it's the availabilty of credit that has been difficult for the customer. The Federal Reserve has done a lot to help the economy and should at least remain neutral for now. "The types of customers that we are seeing at AutoNation Stores, fall into three categories. 'However, there is a lot of cash “on the sidelines” waiting to be used when economic conditions turn, and we should seen an upturn soon. The current downturn in this last economic cycle started in 2006 and most cycles last 30 –40 months, so we should see some sign of a bottoming toward the end of the year or in 2009.'
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KAPLAN, KRAUSS & LEVINE LLC
FAMILY WEALTH ADVISORS
May 29, 2008
Mr. Ralph Mesa General Manager
Mercedes-Benz of Ft. Lauderdale 2411 S. Federal Highway
Ft. Lauderdale, FL 33316
Re: Robert Farkas, Service Advisor
Dear Mr. Mesa,
I am sure most of the letters you receive from your customers are complaints. This letter is the opposite. This letter is to praise the attributes of one of your service advisors.
I arrived at your service department yesterday morning at 10:30 AM with a "minor issue" pertaining to my 2008 CLK. I explained I had limited time this morning to wait for the repair. The usual response would be ... "leave the car and we will call you later or tomorrow when it is ready". Instead, Robert Farkas took the initiative and told me he would try to get it done quickly. Bottom line, he "solved" and had the problem repaired in less than one hour.
He made it happen!!!
You are very fortunate to have Mr. Farkas (who is very much a quality individual) as a member of your team. His actions have also elevated my perception of Mercedes-Benz of Fort Lauderdale.
Thank you again for your excellent service.
Thomas R. Kaplan
cc: Michael Jackson, CEO, AutoNation
cc: Robert Farkas
Mike Jackson Chairman and CEO of AutoNation, joined John McCain's economic spokesman and advisor Doug Holtz-Eakin, Joe Kernen and Carl Quintanilla of CNBC Squawk Box, to discuss issues regarding new National Energy Policy initiatives by the McCain campaign.
Mr. Jackson still contends that a “gas tax holiday” is not necessary as a national policy initiative and would be ineffective in changing consumer behavior to take the necessary steps to improve fuel conservation in the United States. Mr. Jackson reiterated his call for higher fuel taxes to “drive” the nation through this necessary period of change; in order to move America's transportation fleet to higher fuel efficiency, the use of alternative fuels, as well as an increase use of electric vehicles.
Even if newly assessed gas taxes were "rebated back" to the American consumer at the end of the year, the higher and immediate fuel cost increases to the fuel customer, would immediately reduce fuel consumption by the public and the transportation system as a whole; 'sealing the necessary mandate of fuel conservation as the beginning of a US national Energy Policy'. The necessary changes in consumer buying patterns, as well as the implementation of industrial, manufacturing and transportation efficiency initiatives would begin. “Gas taxes should have been raised long ago”.
But some changees have already begun. The automakers have begun to alter their “fleet” production mix in a major way to meet the customer demand for smaller more fuel-efficient cars. The change is difficult, but necessary for the auto industry to be compatitable with more efficient use of transportation fuels and power options in the future. But, it will “take time” to make a complete transition.
"Sending more of the 600 Billion dollars "overseas” annually to pay for foreign oil imports is harmful to the country economically, and harmful to US national security."
Additionally, Mr. Jackson agreed with Senator McCain’s call to allow for the exploration and drilling off all Americas coasts. There has been a major sentiment shift in America that, “the time has come to allow for the exploration and extraction of oil and natural gas from the continental shelf waters on both coasts.” For the past 30 years the improving technologies have allowed the oil industry to drill safely on most continental shelves around the world, and America is the last major country that does not allow these exploration initiatives and practices. The Europeans have been drilling successfully in the waters of the North Sea for a long time.
Mr. Jackson personaly views Senator McCain as the right person to "lead America" and supports Senator McCain's approach to US “Energy Policy”. But, the “gas tax holiday” that has recently been proposed, is not necessary at this time and would be 'counterproductive'.
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Mike Jackson Chairman and CEO, sat down with Bloomberg Television and Fox Business to review “struggles” in the automobile industry. The largest seller of cars in the Nation says there is a "big positive" hidden in the higher fuel prices. Michael Jackson joined Bloomberg and Fox from Auto Nation headquarters in Ft Lauderdale Florida, and talked about the company and auto sales. Mr. Jackson does have a particular interest in watching gasoline prices, and it is surprising to see that he is saying that there is an upside to high gasoline prices.
The country and the industry -- 'The country and the industry have been creating something that is "unsustainable". There will not be fuel conservation without higher gasoline prices. There is a silver lining in this however. And, one can see this in consumer behavior. People are changing the way they use vehicles, and the types of vehicles they purchase. There is tremendous move towards fuel efficiency in the purchase of vehicles now; and this is an historic shift in consumer mind-set. They may have shrugged off $3 per gallon. But, it is really 'sinking in ' now, that $4 per gallon is really difficult for them to handle. The consumer expectation is that they will face higher gasoline prices in the future. Paradoxically, that is the silver lining in higher gasoline prices."
"In terms of boosting sales and helping the economy, it would not be nice to see fuel costs come down in price. Do you think people have learned their lessons, and will continue to look to the fuel-efficient cars?"
"It is really a tragedy that it had to come to this. If we had had a National Energy Policy out of Washington."
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The chairman and CEO of AutoNation, Mike Jackson, sat down with Joe Kernnan of CNBC's "Squawk Box" and reviewed the current "state of affairs" and the effects, regarding the lack of a national coherent energy policy on managing energy prices and consumer behavior. To date, Mr. Jackson has deemed the results a "failure", and until gasoline prices are sufficiently higher, there will be no significant change in consumer behavior.
The US automotive consumer however is migrating away from truck based utility vehicles, but "car based" SUVs are increasingly being purchased. Fuel usage is declining because of a slight change in vehicle customer behavior, however there is still work to do. At $4 dollars per gallon the US consumer is at a "tipping point" and gasoline taxes will still need to be raised to continue to move automobile purchases beyond carbon centric vehicles to a more extensive use of electric and hybrid models in the future.
Ethanol policy is currently a failure also. Huge amounts of monies are being paid to the "fuel blenders" i.e. "Big Oil", while the consumer is not receiving any benefit by using blended ethanol fuels. There has been no significant monetary incentive for using blend e-85 fuels. Consequently virtually no e-85 is being purchased.
Mike Jackson is eagerly awaiting the day when AutoNation can market, on a consistent basis, "fully electric" and "hybrid" vehicles. Electric vehicles within an urban environment will be a tremendous social change for America, and the return of 600 billion in capital annually to the United States, by not having to purchase oil from Venezuela and the Middle East, would be extremely helpful to the economic wellbeing of the country.
Joined by the CEO of Duke Energy - Jim Rogers, both agree that a "great day for America" will be the realization of a de-carbonization of the passenger car system; moving to a combination of fully electric and hybrid vehicles.
"National leadership is required for America to move in this direction. It is in the best national interest. However, we cannot move to the direction required, socially, by following the path of continuously cheap gasoline."
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Thomas L Friedman 5-28-2008
Imagine for a minute, just a minute, that someone running for president was able to actually tell the truth, the real truth, to the American people about what would be the best - I mean really the best - energy policy for the long term economic health and security of our country. I realize this is a fantasy, but play along with me for a minute. What would this mythical, totally imaginary, truth-telling candidate say?
For starters, he or she would explain that there is no short-term fix for gasoline prices. Prices are what they are as a result of rising global oil demand from India. China and a rapidly growing Middle East, on top of our own increasing consumption, a shortage of “sweet" crude that is used for the diesel fuel, that Europe is highly dependent upon and our own neglect of effective energy policy for 30 years.
Cynical ideas, like the McCain-Clinton summertime gas-tax holiday, would only make the problem worse, and reckless initiatives like the Chrysler-Dodge-Jeep to offer to subsidize gasoline for three years for people who buy its gas “guzzlers” are the moral equivalent of tobacco companies offering discounted cigarettes to teenagers.
I can't say it better than my friend Tim Shriver, the Chairman. Of the Special Olympics, did in a Memorial Day essay in The Washington Post: So Dodge wants to sell you a car you don't really want to buy, that is not fuel-efficient, it will further damage our environment, and will further subsidize oil states, some of which are on the other side of the wars we're currently fighting.... “The planet be damned, the troops be forgotten, the economy be ignored: buy a Dodge."
No, our mythical candidate would say the long-term answer is to go exactly the other way: guarantee people a high, price of gasoline - forever. This candidate would note that $4- a gallon gasoline is really starting to impact driving behavior and buying behavior - in way that $3-a-gallon gas did not.
The first time we got such a strong price signal, after the 1973 oil shock, we responded as a country by demanding and producing more fuel-efficient cars. But as soon as oil prices started falling in the late 1980s and early 1995, we let Detroit get us re-addicted to gas guzzlers, and the price of gasoline steadily crept back up to where it is today .
We must not make that mistake again. Therefore, what our mythical candidate would be proposing, argues the energy economist Philip Verleger Jr., a price rate similar to that in Europe today. Washington would declare that it would never let the price fall below that level. If it does, it would increase the federal gasoline tax on a monthly basis to make up the difference between the pump price and the market price.
To ease the burden on the less well off, "anyone earning under $80,000 a year would be compensated with a. reduction in the payroll taxes," said Verleger. Or, he suggested, the government could use the gasoline tax to buy back gas guzzlers from the public and ·crush them.”.
But the message going forward to every car buyer and carmaker would be this: The price of gasoline is never going back down. Therefore, if you buy a big gas-guzzler today, you are locking yourself into perpetually high gasoline bills. You are buying a pig that will eat you out of house and home. At the same time, if you, a manufacturer, continue building fleets of non-hybrid gas-guzzlers, you are condemning yourself, your employees and shareholders to oblivion.
What a cruel thing for a candidate to say? I disagree. Every decade we look back and say: "If only we had done the right thing then, we would be in a different position today."
But no politician dared to do so. When gasoline was $2 a gallon, the government never would have imposed a $2 tax. Now that it is $4 a gallon, the government should at least keep it there, since it is really having the right effect.
I was visiting my local Toyota dealer in Bethesda, Md., last week to trade in one hybrid car for the other. There is now a two-month wait to buy a Ford Prius, which gets close to 50 miles per gallon. The dealer told me I was "lucky". My hybrid was going up in value every day, so I didn't have to worry about waiting a while for my new car. But if it were not a hybrid, he said, “ he would deduct each day $200 from the trade-in price for every $1-a-barrel' increase in the OPEC price of crude oil.”
When I saw the rows and rows of unsold S.U.V.'s parked in his lot, I understood why. We need to make a structural shift in our energy economy. Ultimately, we need to move our entire feet to plug-in electric cars. The only way to get from “here to there” is to start now with a price signal that will force the change.
Barack Obama had the courage to tell voters that the McCain-Clinton summer gas-giveaway plan was a fraud. Wouldn't it be amazing if he took the next step and put the right plan before the American people? Wouldn't that just be amazing?
Mike Jackson, Chairman and CEO of AutoNation, visited the Detroit Auto Show in January, and sat down with Greg Miles from Bloomberg Television Evening Edition to talk about the new products at the show and discuss the current economic problems facing the US consumer.
Mr. Jackson found that both Ford and Chrysler, particularly "nailed" the engineering and design of their respective truck vehicles - the F-150 and the Ram pickup trucks. The interior design and electronics of both vehicles is "extremely impressive" and exemplifies how the vehicles are used...particularly as a "mobile office". He also notes that the F-150 has been the best selling truck in the United States for the past 30 years. and the "pickup truck" has been, and will continue to be, the backbone of America's workforce...The "pickup truck" has built America.'
'However, fantastic products will not "Trump" the economic difficulties that exist now with the "Housing Depression", very high gasoline prices, and a current "credit crunch". Auto sales have been receding for the past two years and will continue to be soft for a third because the consumer is under a tremendous amount of stress.
What is needed is monetary intervention by the Federal Reserve with continued lower interest rates, and a"fiscal stimulus" package from the US government.
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