Latest / Auto Collabs / Do The Work 3 Years Ago with David Spisak
Transcript
- 0:00We gotta do the intro. Yeah, we gotta do the intro first. Should we do an intro first? Have you guys ever met David Spisak? [laughs] [upbeat music] This is Auto Collabs. I have met David Spisak. Actually,
- 0:18so probably, you know, there's certain meals in your life that you just always remember the meal. I remember the first time you met David Spisak. That's funny.
- 0:26It was so impactful that I remember the first time you met David Spisak, and I wasn't even there. Yeah. [laughs] It was at Business Bourbon & Cigars. Okay. Louisville, Kentucky. Very first one.
- 0:39Very first Business Bourbon. I haven't been to one since because, you know, you gotta be a dealer, you gotta sponsor the thing. So, you know, that's where my boat is. But,
- 0:48so I'm there, and the first thing is, you know, I'm just, at that point, like, I'm fresh out of coming f- from a dealership, or maybe it's like, I think it's actually my second to last month, I'm still at the dealership.
- 1:01And I just come in hot, just basically angry at everybody for just- [laughs] Oh, I thought you were gonna be like, "Oh my gosh, it's David Spisak. I love you." No, no, no, no, no.
- 1:11[laughs] I, I essentially, like, just basically tell everyone in the room three times, like, "Why do you keep acting like dum-dums when you do- [laughs]... you know, customer experience stuff?"
- 1:20And so he brings me up and he's like, "This guy, he's actually challenging y- all you old folks in the room."
- 1:26And so later that night, he has me sit down next to him at dinner, and that was the f- first and last time I spoke that night. I'm just kidding. No.
- 1:33Uh, but no, I had a really impactful conversation with him just because of the way that he was say, like, approaching me, saying, "Hey, look, this is, like, the way that you're communicating is something that needs to be communicated to more people."
- 1:45Um, and so it was w- part, one of the, like, things that led to, "Hey, look, Kyle, I think, you know, you've got a, a voice that needs to be shared in auto."
- 1:54So a lot of that is, uh, it's, he's part of that responsibility. It's pretty cool. Wow. I mean, one of the things I've appreciate about him is
- 2:02it, it is clear anytime you speak with him the depth of knowledge he has about how this industry operates. Without a doubt.
- 2:08Not just from a dealership level, but the undercurrent, what's happening on Capitol Hill, like, all the OEM factors. Like, the, the guy just knows this industry in and out.
- 2:19And the second thing I appreciate is when you ask him a question, he actually thinks before he delivers his response, which- Mm...
- 2:27let's be honest, is sometimes a rarity in our industry, where there's just a lot of chirping birds. Or can be. I think it's a rarity in any industry, Michael. Yes. But I don't work in those industries, so. There you go.
- 2:37[laughs] No, you don't. Yeah. [laughs] So, so there we are. Oh, well, we hope you enjoy this conversation that we had with David Spisak.
- 2:44[upbeat music] Hey, welcome to our very first episode of Comedian in His Car- [laughs]... Driving to Get a Coffee.
- 2:56I don't know if, do you guys know this, that David Spisak, our guest today, is a s- was a stand-up comedian? I knew that. Did you know that? I, we knew that only recently. Yeah.
- 3:08I'm still waiting for him to drop, like, a really f- a really hot one. Best material. Don't, don't, don't. D- David re- That's, I know- Remind me though.
- 3:14You, you've, I mean, you, you've shared the stage with Robin Williams. Who, who else? Uh, oh, this is way back. Name, name.
- 3:20But it would've been, um, Michael Pollack, or Kevin Pollak rather, Sinbad, Bobby Slayton, um, golly, a, a, a, a l- Sinbad, what a fun name... lot, lot of, lot of guys. Love Sinbad.
- 3:32Sinbad, yeah, he used to have that show and, um- TV show, I think. Yeah... yeah, yeah. Um, and it, it, I mean, a whole lot of guys back, back in the day.
- 3:39Of course, I started in comedy before comedy really blew up, thanks to cable. You know, it was really, it was, um, cable that really put comedy on a different level.
- 3:50And I had my daughter in 1983 and, uh, learned very quickly that comedy and being on the road was not conducive to being an all-in good dad. And so I l- I left- Yeah, right...
- 4:02I left it for a long period of time, and then, um, somewhere around 19...
- 4:08Or I'm sorry, 2006, I was in a comedy club and ran into somebody, an old, old buddy, and he said, "Hey, you know, uh, you know, do you ever think about getting on stage?" And I said, "Yeah, all the time."
- 4:19I said, "But it's hard to find the time." And he says, "Well, there's a show at Caroline's in, on Broadway in New York next month. You gonna be back in New York?" I said, "I, I will."
- 4:29And he says, "Well," he says, "I know the producer. I'll, I'll get you on stage." [laughs] I said... This is one of those things where you go, "Yeah, sure, that sounds great."
- 4:38And so I said yes without really giving much thought to it, you know, and you haven't been on stage in 20 years, and have a, haven't, I'm not a, I'm not a skit comic or a bit comic.
- 4:48I was more of a ad lib, um, topical based. And, um, but I said sure, and then for the next 30 days, I had just, you know, I was terrified. I just had anxiety.
- 4:59[laughs] Uh, because I hadn't done it in so long, but I, I did go on there at Caroline's and, um...
- 5:07And, and just so you know, when you're a s- when you're starting as a com- as a comic, you, you're the first one out, right? And so you're gonna get probably- Yeah...
- 5:14three to five minutes, and then you're gonna get the red light, and the next one, next one.
- 5:18Well, this was a show that had six comedians on it, and so I'm back in the green room and, and waiting and waiting, and I thought for sure I'd be the first guy out. I wasn't. Second guy, I wasn't.
- 5:29And I got put up second to last, which just kind of added to the terror- [laughs]... and expectations. And the expectation. Yeah. Yes. And, uh, but fortunately,
- 5:39y- you know, really what it comes down to is, uh, kind of like the car business. You have to have a, a little bit of a plan. You need to know how you're gonna go into something and how you're gonna get out of something.
- 5:49So to me, I, the only thing I ever prepared was what was gonna be my opening line and, and, and you wait for a laugh, a big laugh, and then that's typically when you say, "Okay, I'm done. I'm out of here." Okay.
- 6:02And- So are you gonna sh- [laughs] The big question that we all have on our minds right now, are you going to share your opening line with us?Oh, well, let's see. If I- Did you see that fear in his eyes, folks?
- 6:14[laughs] If, if I, if I can recall, if I can recall, it went something like this. Uh, because the MC mentioned that this is my first time back on stage in 20 years. Um,
- 6:26and, and so I, I, I s- I thought I'd roll with that. And so I said, "Hey, uh, thanks so much. I appreciate the welcome. It's true. It's my first time on stage in front of a camera in over 20 years.
- 6:39Uh, o- of course un- unless you count that, uh, webcam incident a couple days ago." And there was a guy in the front row, and I said, "By the way, it's good to see you again. Uh, you looked great that night."
- 6:50[laughs] And, and, and the whole place busted up laughing. I just opened up with that ad lib, and they all went down laughing. And then once you get that first laugh, you're like, "Okay, sh- I got this." So- Yeah...
- 7:03uh, so I rolled until, you know, I waited and waited for that red light, and it seems like forever. Of course, it was only about probably all of 12 minutes. Oh. But it went fine.
- 7:12And then after that, I just ended up doing some stuff back there at, uh, Upper 75th, Dangerfield's, Caroline's, and then also on the West Coast.
- 7:21And I ran that out for about probably three or four years, then decided to retire once again. Well, that's perfect- Wow...
- 7:29because just, uh, about a week ago at time of recording, you held a live stream event in automotive, uh, circling around and, and kind of talking about the concept of EVs, where, how many hours was that?
- 7:44Was it three hours? Uh, it was eight hours. It was eight hours. And you guys can appreciate this. Conceptually, it started out as a three-hour event that turned into a five-hour- Oh, no. [laughs]...
- 7:54that gave birth to an eight-hour event. And- Oh, my gosh. I didn't realize it was an eight-hour event. Yeah, it was e- it was eight hours. Um, so- That's called a telethon.
- 8:02Yeah, it was longer than some relationships that I've had. And, um- [laughs] No offense to any of those ladies. Uh, but listen, I was a teenager, okay? We all learn.
- 8:13Um, but anyways, it was, it was really a spectacular event thanks to people like you, uh, Paul, and, um, I was just on, on a call with Chase Fraser, Ron Fry, Jeff Bohanka, and, uh, Michael Dunn, and so many others that you guys know.
- 8:28Liza, spectacular as always. Um, and just, you know, it was just, it was just really wonderful. Uh, you get kind of lost. I'm sure you feel the same way, guys.
- 8:40But you get kind of lost becoming a member of the audience and listening and, um, just really enjoying these genuine conversations. And so I learned a tremendous amount.
- 8:50And, um, I did what I hoped to do, which was, uh, hopefully gave people much more transparency into where we're going and some great information that they could use in every department in order to, uh, navigate through this transformation to EVs.
- 9:08What, what was the, uh, prevailing thing that you are, are hearing and seeing dealers really work to grapple with when it comes to the EV ga- landscape? Like, is there- Ooh...
- 9:22is there one thing that everybody's the most concerned with right now or the most interested in? Um, you know, we've got, we've got things like tax credits on the hood.
- 9:31We've got inventory de- uh, you know, demand not being met. We've got, uh, the horizon of all these, uh, you know, new features, or we've got charging or we've got the financing end.
- 9:41What, what are you seeing most dealers key in on whe- when it comes to their preparation? I think, um, for starters, just consider this, 'cause it's extraordinary. Um,
- 9:53normally, isn't it true that regardless of the business, whether you're in real estate, you sell widgets, you're, you're in automotive, you're a, a service facility or, you know, a franchise dealer shop or whatever, but, or, or a sales department, whoever does the best job selling wins.
- 10:10Is that true? You win. Yeah. You're gonna get the most clients. You're gonna make the most revenue. You're gonna generate the most profit, and you're gonna make the most money. It's, it's inverse with EVs.
- 10:20The, if you think about this, the dealer that sells the most EVs this year is likely gonna have the largest hit to their net profit, and that's just weird. I mean, it's peculiar, and it's interesting. Mm.
- 10:32And so how do I navigate the reality that when I sell an ICE car, I have this, uh, predicted outcome from a profitability standpoint? I know what the average ICE car is. I know how much d- they supply.
- 10:46I know how long it takes to sell one. I know what the typical gross profit outcome is. I know what it's gonna mean for me from a net perspective and in my service department.
- 10:55All that goes out the window, right, with, with EVs. Second, second thing is, if you're a franchise like Mercedes or BMW, Audi, Chevy, Hyundai, Kia, and, and growing,
- 11:09every quarter you're getting, your allocation is fewer, is comprised of fewer ICE vehicles and more EVs. Well, hold on. Time out. [laughs] That's not what I want, uh, because I want more ICE cars. I want my customers.
- 11:23Right? And this is the big thing. Thank you for saying that. You guys know this. All any dealer wants is please give me inventory. Give me cars.
- 11:33Give me models and trims that my customers are looking for, and I'll handle the rest. Don't worry. I got it. But that's not what's happening here.
- 11:42This is something where, interestingly, you know, for three years, you all have heard the expression a million times, either life happens to you or you happen to it. And what does that mean?
- 11:53Well, normally, when you happen to it, the inference is that's when you are the force of nature and something good's gonna happen. When it happens to you, it usually kicked your butt.
- 12:04Well, for three years, that was inverted, right? We're in a bizarro world. So for three years, life happened to dealers, and it was record profitability for three years in a row.
- 12:15But now clock has struck 12, um, and Cinderella style, and, and now we're back to the real world. You gotta sell cars. Prices are going up. Uh, staffing's going up.
- 12:27Floor plan expense advertising is up.And all of a sudden we're getting more inventory, but the sales travel rate is not moving at the same pace as the inventory supply.
- 12:38We're up 60-plus percent last year all in, including EVs, and our sales tr- rate year over year was up maybe 10% at best.
- 12:47The delta between the two spells margin compression, spells additional cost to sell from advertising expense, sales comp, um, the ugly four-letter word minis has come creeping back into conversations, and it's just a different world.
- 13:02So all of a sudden, EVs are exacerbating that. If I have one of those franchises, you know, I'm in a different world.
- 13:09So if you look at Lexus and Toyota, if you look at all the franchises that, that we have in our industry, and you look at the ones that December was frankly the 24th month of 2022, what franchises were those?
- 13:23Well, it was Lexus, it was Toyota, it was Honda, it was Subaru. Um, and believe it or not, Kia was in the top six as well. And you think about the majority of those, none of those are dominated by EVs.
- 13:39All of them s- continue to subscribe to the one too few is better than the one too many. So they acted more like a Rolex store than, than, like, a, a Walmart, for example. No offense, uh, Mr. Buffett.
- 13:52But, um- [laughs]... you know, fine organization. And they do. #hireme. But, but the reality is... The, the, thank you. I mean, the, the reality... And
- 14:02just as, the, to get tangential, I mean, Walmart's the number one retailer, not because they sell better, but because they buy better than anybody else. They buy what people want.
- 14:11They track every shelf, every location, and they pay attention to that data. Mm-hmm. We're not, the OEMs are not paying attention to the data.
- 14:20We have a massive supply demand issue, and just this morning on Squawk Box on CNBC, you know, Tesla's, uh, stock price, uh, was lowered by Goldman Sachs and, um, you know, there is clearly a supply demand issue.
- 14:36There's a, a big lag and separation between what we're producing and what people wanna buy. And- Okay.
- 14:43So, but here's the, here's my problem then, and, and I'll just, uh, I'll just say this- Let's keep personal problems out of the picture. I'm gonna, I'm gonna bring this... This is gonna be personal. No, I'm just kidding.
- 14:52[laughs] The problem now at this point is, and, and Ford has just said that they're gonna move all of these employees over to their ICE vehicle, uh, uh, machines and, and start producing more on the ICE side again.
- 15:04But you've already got all of these manufacturers have poured millions, if not billions, into producing- Right... facilities that are machined and tooled to produce these EVs. So it's not like it's not coming.
- 15:15It is going to come.
- 15:17So we either have to shift the demand matrix, uh, or work with the demand that we have, which is gonna be, that's gonna be, I think, the hardest thing, is figuring out what the dealers have the responsibility to, to, to, uh, almost help create the demand within the buying, uh, network.
- 15:35Because it's not like the vehicles haven't either been made already or are already, uh, ready to be produced, and these OEMs aren't turning away, uh, the, the pressures from the political landscape right now.
- 15:48Um, and unless there's a massive change in that in the next year, then we're gonna see this continue to happen over the next year.
- 15:53So my question is, is, like, how do we stop complaining about it as, as, as, as an automotive industry, which I agree there's a lot to complain about because demand is not meeting supply, and how do we actually a- as a dealer, if you know that the supply is coming, how do you prepare to make sure that you can be ready?
- 16:09Like, where do you find the profit? Where do you find the margins? Where do you find the profit centers in order to be equipped to still make money with EVs in the landscape?
- 16:19So first of all, fantastic the way you framed it, and completely appropriate. Uh, I'm gonna up level it just one little thing. Um, all that has to be done in the next 12 to 18 months. [laughs] Right. All of it. Okay?
- 16:31And I'll tell you why, is because the Chinese are coming. Okay? And it's not a joke.
- 16:35These are not the cars they were building 10 years ago that, uh, would've had a tough time handling a collision with a, a shopping cart.
- 16:41These are real deal, high quality cars that have solid state batteries that are under $30,000 that have all the features, all the functionality, and they have a bandwidth from high performance cars all the way down to economy, from SUVs to minivans.
- 16:57It, it's gonna take five or eight years for our OEMs. But here's the key thing for everybody that, that Kyle just brought up. How do we stop complaining and start moving forward in a productive way?
- 17:07Because like it or not, they're not coming, they're here. And guess what? They're multiplying like jackrabbits.
- 17:12We're gonna have twice as many models in the next year, and we have to figure this out, honestly, in the next 12 to 18 months. So number one, Liza said a couple things that are really dr- really important.
- 17:22Number one is, first of all, you're either gonna decide to be all in or you're frankly gonna be on the outside, uh, looking in. Now, you could say, "Well, I'm okay with that because they lose money."
- 17:33You could say that now. Mm-hmm. But wait till your market is 5 or 7 or 8 or 10% EVs. Are you gonna tell me, "I'm okay saying goodbye to 5 or 10% of my new car volume"?
- 17:46Do the math right now based on profitability per car right now. What percentage of your current sales can you say goodbye to before it starts to have very bad implications on your net profit? Yeah.
- 17:59Second thing is she specifically said she has a EV specialist in each and every- Mm-hmm... dealership. I think that's a rarity- Very much... and it needs to change. Yep. Rarity. You have to lean in.
- 18:12N- the third thing is she's making a very significant investment in both time and money by working with Bev everything, for example, and getting training on a monthly basis so that her team is fully equipped.
- 18:25And by the way, for anybody listening-This is somebody who's doing this in Virginia, where they have a relatively small percentage in rural communities. But you know what? She's planting the seeds.
- 18:36And I always go back to this: we are where we are today not because of what we did yesterday. It's because of what we did- Mm-hmm... a year ago, two years ago.
- 18:45She's- CMA is planting the seeds to dominate in EVs just like they dominate in ICE. You cannot control what happens at the OEM. You certainly can't control the government. Right?
- 18:58So focus on what you can control, and that is delivering a absolutely wicked experience. According to McKinsey, according to Forbes, and everybody else, EV buyers lean on experience more than ICE buyers.
- 19:12Deliver them a spectacular experience, make sure your people are knowledgeable, and you'll be able to optimize what we have to work with today.
- 19:21But more importantly, you'll be in a position to absolutely crush it when things start turning around for the better.
- 19:28They're gonna get better, they're gonna get more reliable, the batteries are gonna start being 4- and 500 miles, and they're gonna get more affordable. When that happens, you wanna dominate. Lastly, why 15 or 18 months?
- 19:41Like I said, when BYD shows up with their cars made in Mexico that still qualify- Oh, boy... for the 7,500. And by the way, they're, they are specifically courting the top 50 dealer groups out there.
- 19:54They're not begging people, "Hey, can you please take this franchise?" Like Hugo did, or even Hyundai back in the '80s, right? So they're going after the best of the best.
- 20:04If you compete with the best of the best, and oh, by the way, the year is 2024. If you have a phone, we all compete. It's not the dealer across the street. You need to say, "I'm gonna make a decision consciously.
- 20:17I'm gonna lean in, invest in my people, set my myself-" Oh, boy. Oh, boy. There we go. Hey. There it went. [laughs] Oh, we all, we both, we all looked at each other and went, "Oh." But look, look, here's the thing.
- 20:32I think it- lean in and invest in your people. I don't think you could actually... You couldn't wrap an Auto Collabs podcast any better than that- No. That's true. [laughs] Because that's, like- No...
- 20:42that's what we're all about here. And, and whether you're talking about EVs or cleaning the toilets in the bathroom, invest in your people, right?
- 20:50Because every single person counts, and they're the ones living the experience to, to the front line. It's clear you're passionate about that.
- 20:55I can't wait to see what you do, uh, with this series of content for dealers over the next year. Uh, David, thank you so much for joining us today on Auto Collabs.
- 21:03You know, it's always a pleasure to hang out with you guys.
- 21:06I love your creativity, your ingenuity, but, uh, what I love most is your people first mentality and that you're educating, informing, and passionately communicating.
- 21:17We don't know how the stock market's gonna do this year. We don't know what's gonna happen with dealerships.
- 21:23I suspect profit's gonna go down another 20%, but I can guarantee you this: you guys are money because there is no better ROI day in and day out than when you invest in your people. Thank you for having me.
- 21:37[upbeat music] You said it. You should wear shirts like that. I don't know. People. [laughs] Love your people. Okay. Well, there's a couple of things that impress me. First one is I cannot speak and drive.
- 21:54I, I just can't. Like- [laughs]... and I've arrived at the age where I have to turn the radio down to find parking at Walmart. Oh. [laughs] And so the fact that he was- Yep... driving in the snow or ice
- 22:10and was able to formulate deep, thought-provoking statements about current fares of E- EVs in this industry, uh, mazel tov- Well, there's-... is how I say it...
- 22:20the, the prin- the premise that he talks about, like, where you are today is not because of what you did yesterday, it's because of what you did a year ago. Yeah.
- 22:28I don't, I don't think he could, he could put it any more clearly, especially when it comes to the topic of EVs, um, and the propensity of this industry in general to think in 30-day cycles.
- 22:39Maybe, if you're lucky, in quarterly cycles. Um, but without a doubt, when he mentioned Liza Borches thinking over- Mm-hmm...
- 22:48the horizon, saying like, "Hey, this is a small percentage of my market right now, but I'm gonna dominate when it becomes, um, a larger percentage," that perspective is a drum that he always seems to talk about, right?
- 22:59Like, thinking of what's going to happen as a secondary, tertiary, you know, thing from now. But I think that that is one of the reasons when he says we have to solve this now, that message,
- 23:10leading with, leading with that message, I think is a part of the solution. I mean, I don't know. Because- Y- Tr- track with me.
- 23:16Like, Tesla is dominating the market not because of what they did three weeks ago with their pricing changes- That's for sure...
- 23:23it's because they were willing to do the work 10 and, uh, 10 and 13 years ago to put in the time to dominate the market now. So, like, you're already behind. You might as well get going. You're already...
- 23:35It reminds me, uh, a conference, uh, about two years ago. Gosh, I gotta remember her name. I'll get it, I'll get it to Nathan so he can put it in the notes.
- 23:44Um, she's an investor that only deals with future and, uh, uh, developing, you know, research and things of that. AI, obviously, robotics, um, pharmaceutical stuff, and advancements in technology there.
- 23:58And specifically said Tesla. She did not say EVs. She said Tesla. And she said that the, the hedge there is the battery technology. Oh. We're all busy talking about the vehicle. Elon and Tesla are...
- 24:16They know that it's about the battery technology that they've spent this whole time developing. And, and I remember being like, "Huh, I never thought of it that way."
- 24:25Um, and then shortly thereafter- She was like, "That's why I'm richer than you are"Y- yeah. Well, yes, that.
- 24:31But also shortly thereafter, you saw an immediate, like, all of the different EV manufacturers, different automakers are like, "Oh, we're gonna now support the Tesla charger thing." Ah. And I was like, "Ah, there it is."
- 24:43So, I mean, there, there are definitely some undercurrents that we're not talking about yet that we should be talking about when it comes to EVs. Um, but there you go.
- 24:53I was gonna say [chuckles] before, before you made your last point, uh, Kyle, I was gonna be like, "Hey, but I, I'm curious, like, h- what, what did you pick up on on the conversation you had that, between you and David Spisak that me and Paul watched?"
- 25:06[laughs] Anyways. Well, I, I, yeah. I mean, I just always love bantering it, with him because I feel like, you know, it, it's, it's fun because I get to, like, get my, get my say in.
- 25:18And, and, you know, in a lot of our world, I, you know, dealing with people that maybe haven't worked in dealerships, it, you know, for me, like, to, to coming from the front lines.
- 25:26Like, he, he's, he lived for so long in the dealership world and still is extremely steeped in, like, the operations.
- 25:33And so, um, you know, understanding that operations isn't, uh, plug in the new widget, that it's a lot deeper than that- Oh... is a lot of fun for me.
- 25:42So, eh, you know, I got the, got, got the lion's shares of the questions in. That's good. Uh, and so appreciate that. But, uh, hey, look, we're gonna keep having this conversation.
- 25:51So if you wanna keep having this conversation, we're always gonna do it here on Auto Collabs. We'll probably laugh a little bit, too, so you should come back for the next one.
- 25:57On behalf of myself, Michael Cirillo, and Paul Jay Daly, thanks for joining us on Auto Collabs.
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- 26:24[upbeat music] Welcome to Auto Collabs. Welcome to Auto Collabs. [laughs] Why are we recording? Are we rolling yet? Not yet.