Connecting Rod Ch. 10

Chapter 10: Unexpected Events

September 5, 1970

My head was still swimming from all the events that had happened since Shelly had her accident and we got engaged. I was still having trouble coming to grips with it. The previous four months saw us open a new shop not far from the service station. Duke was running it, and almost right away I could tell he was going to be a success. Shannon was right there beside him, helping him in every way she could; answering the phone, ordering parts, mailing out invoices, taking the checks to the bank, and a dozen other things that would otherwise keep him from working on the cars and trucks.

I said trucks because we earned a contract to service and repair all the district telephone service trucks. The opportunity had come up suddenly. The company decided to have the work done outside its own shop when they looked at their costs. We bid on the contract and were awarded it against two other firms. Immediately, it meant we needed two more mechanics. Luckily, some of the guys from the about-to-be-closed shop came by to see if there were any jobs. Duke and I interviewed them and hired two guys who we thought would do a good job and stick with us long-term.

I'd no sooner got Duke settled than I had a visit from Martin Williston and Tom Humphreys. Tom was the real estate agent that had negotiated the rental of Duke's shop for us. Martin was a member of the city council. They had come to see me about another piece of property and wanted to know if I might be interested in it.

The property was about six blocks from our service station and until a couple of years ago it had been a Studebaker/Packard dealership. It closed due to lack of business. No surprise there. What made me pay attention were the service bays, four of them, all with hoists, plus a body shop, and a paint booth. The owner had held onto the property with the hope that someone would want it, but in two years there had been no offers and it was time to force the action.

If the offer had come along earlier, I might have jumped at it. As it was, we were up to our necks in work for the facilities we had, and once again working our people very hard. On the other hand, I was curious about what it would cost and I decided to at least listen to them. Looking back on it now, I'm glad I did. You never know what can happen when you least expect it.

Jurgen, Duke, and I had gone over to the abandoned dealership on a Sunday just to have a look. What we saw made our mouths water. It was everything you'd want in a shop. On top of that, it wouldn't take much to put it in the kind of shape I expect any of our properties to be in. When we left the building, Jurgen suggested we sit down for a moment.

Jurgen had been purchasing a copy of a German language newspaper once a week, just to keep in touch with the happenings in his former country. He said he had just read in the newspaper that NSU and Audi were about to merge. I didn't get why that would be interesting until he told me. Audi was a successor to the old Auto Union company. At any rate, the newspaper reported that Audi would replace NSU and begin an aggressive marketing campaign in North America. They would be looking for dealerships to represent them.

Jurgen had once more planted a seed and then stepped back to see what would happen. I could hear the gears turning in his crafty mind. Auto Union was his old employer many years ago and now there was a chance to see them reborn here in America. I have to admit, I was interested. I wanted to explore the idea, but I didn't know how to go about it.

First things first. I sat down with Martin and Tom and discussed what it would take to buy the property. Martin suggested that the owner was not in desperate need of cash, but did want to liquidate the asset. Tom suggested we make a lowball offer and see what the guy came back with. We didn't have to commit to buying it, but we needed to know some hard-dollar costs.

Next, Jurgen made an overseas phone call to Audi in Ingolstadt to get some more information, finding out if they would be willing to talk to us about a dealership. Apparently they were and had already set up a U.S. operations base in New York. Volkswagen had bought the rights to Audi and it was they we would have to talk to.

It turned out the local VW dealer would have first right of refusal on the Audi brand, but he turned it down. He was anxious to get his feet wet with Porsche as the natural complement to the air-cooled Beetle. So part two of the strategy was available; a franchise.

Part three was the business plan. Before we put out dime one we needed to know that the business would produce enough revenue to sustain itself. There was no point in ending up like the Studebaker guy did. This was the sticking point as far as I was concerned. The more I thought about it, the more I figured we needed an additional brand to sell.

The next-to-final step was financing. How were we going to finance this project? My gut told me that we could probably find the manpower, but where would we find the cash? It was time to call Stumpy once more. He was over in a flash.

"So, let me get this straight. You want to get into the car business, right? And you are thinking about buying Ray Pollard's old dealership and bringing in foreign cars to sell, right?"

I was nodding my agreement as he spoke.

"Well, I don't know nothin' about selling cars, but I know someone who does."

"Who's that?"

"Ray Pollard," he grinned.

I laughed. The simple answer was usually the best. I shrugged and clapped Stumpy on the shoulder. "I should have thought of that. He wants to sell the property, so naturally, he'd want to help us. Can we trust him?"

"Yep. Old Ray is as straight as they come. He'll tell you what you need to know. But, one thing ... don't be surprised if Ray doesn't want to come in on the deal with you if he thinks you've got a winner. He told me he hoped someone would pick the property up and make it go."

"Well, Stumpy, I hadn't even thought of a partnership, but with Ray already owning the property, that might solve some of our financial worries."

"Exactly what I was thinkin'," the round little man nodded. I was getting to like Stumpy more and more as time went on. He was smart, knew everybody, and was a good idea man, especially when it came to finance.

I called a business meeting on Tuesday evening and invited Duke and his number one man, Tommy Nakano. Duke had been praising Tommy to high heaven, and I wanted to see how he handled himself in this situation. We were letting him in on the inside of our family business. If he was as good as Duke said, then he could be an important man in our future.

Mom, Jurgen, Shelly, Duke, Shannon and Tommy all sat down with me in the living room just after seven that evening. Mom had baked a nice big chocolate cake and made sure everyone got a piece before we started the meeting.

I had already told Mom and Shelly what I was thinking, and of course Jurgen knew as well. It was a big step and maybe a dangerous one. I needed everyone to buy-in to make it work. I began by laying out how this had all come about, blaming it all on Jurgen of course. That got a laugh all the way around.

Then we got down to serious business -- how to make it work. I'm an optimist by nature and I tend to look for ways to win rather than how not to lose. Luckily, we didn't have anyone in the room that was really negative. I could see the worried look on Mom's face, but that was natural. I think she was worried I was biting off more than I could chew.

My one real concern was whether we could develop enough volume with Audi to make the business a success. While foreign cars were continuing to rapidly gain popularity on the West Coast, it was still an unknown brand and new business wouldn't be automatic. I was really hoping we could team it with a non-competing brand and give ourselves more volume opportunities. I thought about Jeep, but I was leery of them for quality reasons and their ownership stability. There was a rumour going around the trade that they were for sale again.

Tommy Nakano had sat quietly, listening intently. He was acting very interested, but so far hadn't participated. I decided to draw him out.

"What do you think, Tommy?"

He sat quietly, composing what he wanted to say I suppose. He was nodding his head, in agreement with something? I couldn't tell.

"I agree that we would need another brand. One that would not compete directly with Audi. One that we could have confidence in for quality and factory support."

He spoke in flawless, unaccented English. Duke had said he was very thoughtful and deliberate. Duke also told me he had a wicked sense of humor. What interested me was his use of "we" when talking about the business. I liked that.

"Would you be willing to entertain a Japanese brand?" he asked me directly.

"Yes. But Honda and Toyota are well established. Datsun is the only major brand not well represented locally."

"True. Perhaps you can merge that dealer into ours. Another partner, perhaps?"

I was impressed. This was an original idea, not unlike what we discussed for the property.

"We would have to get Datsun's OK for that," I suggested.

"Actually, it's Nissan Motors. Datsun is just a brand name," Tommy noted.

"OK. You seem to know something about this. Do you have a suggestion?"

"I have a friend, Kenny Hayashi. He's a graduate engineer who speaks and reads Japanese. I was about to recommend him to you, since he is a car 'nut.' I was going to suggest we contact Nissan, North America, and see if we can negotiate a local franchise. Kenny could act as translator, if that is necessary."

"Great. But, isn't there a Datsun dealer in Bellingham already?" I asked.

"Yeah ... but I'm not sure he isn't just a re-seller. I've been to his place asking about the new Fairlady sports car and he didn't know what I was talking about. I think he's buying cars at wholesale in Seattle and moving them up here. It would be worth it to find out, anyway," Tommy suggested.

"You're right. It would be worth it. Why don't you and Kenny make the call on my behalf and see if there's any interest. If there is, we can go from there."

That settled, we seemed to have created an action plan for the immediate future. It was Shelly that asked a very pertinent question.

"What's going to happen to the ARCO station?"

That stopped me for a moment. I had thought about it, but I wasn't sure I wanted to share my thoughts yet. On the other hand, I had revealed some of my ambitions to them, so it hardly seemed fair to hold back on them.

"I'd probably sell it. It will be worth a lot more today than when we bought it a year ago. The cash from that would help us with the dealership set-up. We could retire the lease on Duke's shop next year and roll everything into one location."

"I might want to buy my shop," Duke said, speaking up for the first time.

"That's an option too, Duke. We'd have to figure out what a fair price would be, but it wouldn't be too much. The property and a lot of the equipment is rented or leased. I'd be willing to discuss that with you," I said.

The discussion continued for another hour as we debated the ins and outs of establishing an automobile dealership. Since none of us had any experience in the business, it was looking like Ray Pollard was going to be an important element in this plan.

I made an appointment to meet with Mr. Pollard to have an informal discussion about the property he had for sale. I said nothing about wanting to revive it as a dealership.

Ray didn't look anything like I imagined him. He was tall, at least six-four, lean with an angular kind of build, white-haired, and dressed like a very successful businessman. He wore a big, friendly smile and stuck out his hand in greeting when I walked into his office.

"Mr. Pollard, I'm Rod Williams."

"It's Ray, Rod. I'm retired ... sort of ... and I'm more comfortable without the formalities."

"Sure, Ray. Stumpy Jorgensen suggested I talk to you about your property, the former dealership. I might be interested in buying it."

"What do you want to use it for?" he asked, obviously very curious.

"I'd rather not have his become public knowledge. Can we keep this confidential?"

"Of course. Go on."

"I'm thinking of reopening it as a dealership for imported cars."

"I see. Well, there's no doubt import cars sell well in this part of the world. That is, if they get decent factory support."

"Yes. I think we have a good chance to get what we need from the companies."

"Well, the property is for sale. Do you have an offer in mind?

"Well, to be perfectly honest, we ... I ... don't know very much about selling cars. Stumpy suggested you might be interested in helping us out with your know-how."

"Know-how is the only thing I've got that's worth anything, son. What are you willing to pay for it?"

"Would you be interested in a partnership?"

"I'd listen to what you have in mind. No promises, mind you," he said affably.

I laid out the plan and told him about the opportunity with Audi and possibly Datsun. He listened carefully, asking a pertinent question now and then. When I finished telling about our discussion the other night, he was nodding.

"I think you've got a decent chance, son. It sure sounds better than hanging on to the Studebaker dealership as long as I did. Guess I fell in love with the name and not the product. Old loyalties die hard," he laughed.

"I guess we've got a couple of ways to look at this, according to Stumpy. You could be the landlord and I would pay you rent for the property. Or, you could become a partner in the business and we could work out what the profit split would be between us," I said.

"That assumes there is a profit," he grinned.

"Yeah. That it does."

He leaned back in his old oak chair and stroked his chin as he thought about what I had suggested. I didn't really expect an answer then anyway, so I was about to excuse myself and let him call me when he'd thought it over. He surprised me.

"OK ... I'm in. Let's get together with Stumpy and work out a partnership we can both live with. This sounds like fun and I'd like to be in on it."

"Just like that?" I said in surprise.

"Just like that. You've got a good reputation in this town, son, considering you haven't been here very long. Word's out that you can be trusted and that you do good work at fair prices. I like that. I like that because that's the way I like to do business. I think we could have a lot in common."

"Geez ... that's a surprise. I'm grateful for your support. You didn't take long to make your mind up."

"Son, I'm nearly seventy years old and I'm still in pretty good health. I need something to do that might be interesting and fun. I have confidence in you and you come with pretty good credentials. You took that dirty old derelict station and turned it into a winner in no time flat. You also come with some pretty good recommendations, too."

"Recommendations?" I wasn't sure what he was talking about.

"Taylor McLaren. He seems to think you have a gift for finding good people."

It didn't register on me right away. Who was Taylor McLaren? Then the lights went on.

"Shannon's father?"

"Yep. I can remember bouncing little Shannon on my knee when she was just two or so."

"How does her father know about me?"

"Shannon and Brian. I think Taylor is trying to figure out how Brian came to run that shop on his own. That had a lot to do with him accepting the boy, you know. I think he learned that appearances can be deceiving."

"Duke's a great guy, Mr. Pollard ... I mean, Ray. He knows what he wants and he works hard to earn it. He'll do really well at anything he wants."

Ray smiled. "I guess that's why Taylor and I are willing to listen to your business proposal."

"Both of you?"

"Yes ... Stumpy told me what you had in mind and that he thought you were pretty savvy when it came to running a business. He suggested I call Taylor and mention it to him. I didn't know about Shannon and Brian and you, but as soon as I did, you had someone willing to listen. I think Taylor would be interested as well."

"Wow. That's a lot to think about.

"I'll bet it is. But here's the thing, son. If you and your people think you can make a go of this business, I'd be willing to throw in with you, and so would Taylor. That would syndicate the risk for all of us. But I suspect if you think it's a good plan, then it's probably not much of a risk," he smiled.

I let out a deep breath. I was almost dizzy with how quickly this little idea had formed into a hard plan. I was even more rattled by the confidence that Ray Pollard and Taylor McLaren had in me. I needed some time to think this over.

"Ray, I'm grateful for your support and Mr. McLaren's too. I need to sit down and get some more details. You know, facts and figures. I could really use your help so that I don't make a mistake when I'm dealing with these car factories."

"I'd be happy to. That's one thing that I can help with. Why don't we get a meeting together with your people and we'll talk about what needs to be done. I think Taylor should be at that meeting too."

"Sure. Whatever you think. And ... thanks. I feel pretty good about this. I wasn't sure this was possible, but you're giving me a lot of confidence we can make it work. Thanks!"

"You're welcome, son."

My mind was swimming when I went home that evening. I was having a hard time not thinking about the car dealership when I still had a business to run. It might not be as fancy as a new dealership, but it was still our bread-and-butter, and I needed to make sure it was still running well.

For the next few days, I concentrated on the ARCO station. We were busy and I was farming out any extra shop business to Duke. He was already getting new business from some of the other stations who couldn't or didn't handle repairs. I was quietly patting myself on the back for giving him the opportunity to manage the new addition.

I had to start thinking about the future and my possible new venture. It had come about unexpectedly and much sooner than I was prepared for. Yet, when opportunity arises, you have to grab it if you can. I was pretty sure I would go for the dealership/partnership if I could be confident in the car companies and find the people I would need for the operation.

Later that week I got fitted for a new suit for the wedding. As I thought about my future a little, I wondered if I hadn't put too much on my plate. I started to think I should slow things down a bit. The dealership was exciting, but complicated and probably time-consuming. Throw the wedding and running the station on top of that and I might be in trouble if I wasn't careful. I needed some advice.

I called Ted Reynolds and asked to meet with him the next time he was in the area. The following Monday, we sat down in the station office and I laid out what was going on.

"Damn, Rod. I hate to see you sell this place. It's the best station in my territory ... bar none. Is there anyway you can see yourself keepin' it?" Ted was obviously concerned.

"I'm afraid I'm not going to have the time to look after it properly. The last thing I want to have happen is to see it go downhill because it isn't getting the attention it deserves."

"Why don't you hire a manager? Someone you can trust to keep it up the way you want it. That way, you still have the profits and cash flow to help with your new venture. The only thing to concentrate on is hiring the right guy to run the place."

I sat back and thought about Ted's suggestion. The key was to find the "right guy."

"Any suggestions?" I asked.

"I might have. I know a young guy in Boise who's looking for an opportunity to run his own show. You could always work out a partnership deal with him if he's good."