At a Midwest auto dealership, trying to make a recovery happen

April 11, 2012

The dealership’s floor is polished and gleaming. The cars are buffed and waxed. Their windshields are decorated with the latest markdown prices, a series of exclamation points in neon pink and green. Here, for a limited time only, is yet another “Huge Savings Event!” during “Truck Month!” with “0% Interest!” and “No Money Down!”

Doug Kleekamp, 50, walks outside at 8 a.m. to greet the first customer of the day. He is a career salesman raising five kids on commission, and he hasn’t sold a car for almost a week. But everything he’s heard about the economy says this is the moment when a turnaround will finally begin, so he smooths the wrinkles from his Modern Auto shirt, smiles at the customer and gestures toward the cloudless sky.

“You’ve come on the perfect day,” he says, extending his hand. “It’s the perfect time to buy a car.”

Here in rural Missouri, and in so many other places across the country, it is far too passive to say, simply, that the economy is improving. At Modern Auto, six salesmen work 12-hour days and try every strategy they can imagine to make it improve. In an effort to outlast the recession, the family-owned dealership hired a consultant, produced a new commercial and started holding motivational meetings for its sales staff, where each week a manager recites a version of the same question:

“Ask yourselves: What does it take during these times to sell a car?”

In Washington, D.C., it has taken auto bailouts, record-low interest rates and manufacturing incentives — all of which helped the auto industry achieve its best sales last month since 2008. Politicians who gambled on the industry now track strong sales numbers to gauge the strength of the economy. Is this the year when recovering becomes recovered? Is consumer confidence finally on the rise?

In Washington, Mo., each transaction is its own verdict, and each potential sale is another milestone toward recovery — not just for the economy at large but for the six salesmen working the floor.

There’s Jeff, who was laid off from another job before coming to Modern Auto and who waits for customers on a warped bench near the parking lot because it is “20 steps closer to a sale.” There’s Keith, who stores ramen noodles in his desk drawer for lunch, and Matt, in a tie and baseball cap, who invites customers to karaoke on Tuesday nights and tries to bond with them by sharing family photos in a binder labeled: “I am a Human, not just a car salesman.”

And then there’s Doug Klee­kamp, a fixture at the corner desk on the showroom floor, always in a Modern Auto button-down, earning the same in his 26th year at the dealership as he did in his 15th.

He hates fishing for walk-in business in the parking lot — “I don’t want to look desperate, even if I am,” he says — so instead he sifts through old contacts and tries to schedule sales appointments. An elderly man comes to take three test-drives, even though he’s not ready to buy. A middle-aged woman confides for 30 minutes about her rocky marriage and then says she should consult her husband before shopping for a car.

“Thanks for listening, Derrick,” she says.

“It’s Doug,” he reminds her.

He had expected 2012 to be a breakout year. The average car on the road is a record 11 years old, suggesting pent-up demand, and car purchases have increased over last year by more than 10 percent. But sales are still well below pre-recession averages, especially in this river town of 14,000 residents, where manufacturing plants continue to close and only a handful of tourists have bought into the region’s rebranding as a wine-tasting destination. “If these are good times, it’s only because the definition of good has changed,” Klee­kamp says.

Finally, in the early afternoon, a large man wearing cowboy boots and sunglasses stops by his desk. “Joe Foster,” the man says, matter-of-factly. “I’m hoping you can show me that Denali out there.”

Kleekamp guides him to an oversize truck in the parking lot. The sun reflects off the rims. A hint of spring warms the hood.

They sit together in the cab and stare at the features on the dashboard. Foster explains that he’s the owner of a small business hauling construction materials to St. Louis. His current truck is seven years old, purchased before the recession, and he needs another capable of handling 2,000-pound loads and everyday driving.

“I’m trying to decide if this is the time to buy,” he says.

“It might be the time,” Klee­kamp says. “Why don’t we go inside and talk about it?”

* * *

Every deal needs to be discussed with the sales manager, so Kleekamp leaves Foster at his desk with a bottle of water and goes to see his boss, Herb Adams. The two men have worked together for more than a decade, but the economic collapse crystallized their divergent approaches to dealmaking. Kleekamp sometimes refers to his boss as “a shark.” Adams calls his employee “a softie.”

“Got a minute to talk?” Klee­kamp asks.

“That depends,” Adams says. “Are you finally selling a car?”

Adams is a local politician and a former high school athlete — “a competitor, through and through,” he says — and he leads his sales floor as if it were a locker room. Good salesmen are “closers.” Bad ones are “clerks.” Each deal is its own game, with a winner and a loser, and never have the stakes been so high as now, with more customers beginning to browse but few deciding to buy.

The auto industry standard calls for each salesman to sell 10 cars each month, and by that measure Adams’s staff is made up of underachievers. He keeps a handwritten list of each employee’s daily sales, a humbling collection of 0’s and 1’s that management passes around at staff meetings. “We’re getting our asses kicked,” Adams sometimes says.

Modern Auto changed its pay scale during the downturn. Now salesmen are guaranteed hourly pay just above minimum wage, but they earn premiums of $200 to $300 for every car sold. “The best guys are egotistic and love money,” Adams says. “I try to hire people who need to keep up with their own bad habits: fast cars, gambling, big boats, serious debts. Those are people who do what it takes to close a deal.”

Instead, Adams looks across his desk at Kleekamp — 50, dimpled, with graying eyebrows, spiked hair and the birth dates of his five children tucked safely inside his wallet. In the past five years, as his take-home pay dropped by more than 25 percent, Kleekamp attended a Financial Peace University at his church and memorized radio host Dave Ramsey’s seven principles for debt-free living.

“This guy is still thinking about the truck, but I trust he’s serious,” Kleekamp says.

“You can’t trust anything,” Adams says. “You’ve got to lock him into a number.”

“I’m not sure if he’s ready to go there.”

“Make him ready. This is a hardball game, Doug, and you’re playing softball. Do you want to play nice or sell cars?”

He had always wanted to do both, ever since he came to Modern Auto in 1986 and joined the Rotary Club to make contacts. His childhood friends became customers; his customers became friends. He married his high school girlfriend, bought a house and sent five children to Catholic school. In the late 1990s, when the dealership could make as much as 20 percent profit per car, he sometimes sold two dozen a month, his pace slowed only by the line that formed outside the business manager’s office as customers waited to pick up their keys.

But now the average profit margin is 4 to 7 percent, and Modern Auto has gone three days without selling a car, and that same business manager is sitting in her empty office reading a novel, the third book in a series. Kleekamp’s friends shop around for cheaper prices, if they buy at all. His wife cleans homes to help pay the bills as the cost of living has continued to rise. He has thought about changing careers, but he doesn’t know how to look for work on the Internet or create a résumé.

Many of his old customers have been out of work since the recession, and sometimes he thinks of them and tries to convince himself that he’s lucky. “My plan now is to retire in four years,” he says, “but that can only happen if people start buying.”

And even if they do, Kleekamp believes that the nature of the car business has changed forever. Customers spend more conservatively and haggle with you for every dollar. Other dealerships, equally desperate to make a sale, undercut your prices. Sales that once took an hour now take two days of persuading. Nobody cares about salesmanship or service so much as the bottom line. You have to play hardball.

These are the legacies of the economic collapse.

“I’ll see if we can get it done today,” Kleekamp says now, in the office.

“Start out going for the whole hog, but settle for the sandwich,” Adams says.

“I’ll settle for just about anything,” Kleekamp says, before walking back out to the sales floor.

* * *

Foster is waiting for him, looking out the window at the Denali with its price painted on the windshield: $55,000.

“Let’s see if we can work something out,” Kleekamp says.

“First I need to work this out in my own head,” Foster says. “I go back and forth.”

His life has always revolved around cars and trucks. His grandfather worked on the manufacturing line for Chrysler; his dad drove a bus. Foster bought his first car at 13, a ’68 Barracuda fastback from a junkyard, and later met his wife cruising it up and down Fifth Street in Washington. He worked as a long-haul truck driver and as a part-time mechanic. Over the years, he’s purchased pickups, derby cars and campers, sometimes flying as far as Philadelphia or Denver to find the right car for the best price.

But he’s also a small-business owner, with three employees for whom he can no longer afford benefits. His tenuous profits have dropped 15 percent in the past few months because of rising gas prices. He needs to make $600 a day to earn a profit, and lately his wife does the accounting alone upstairs and rarely reveals the numbers. His brother-in-law’s hauling company just went out of business. So did a dozen others in eastern Missouri.

Would a $55,000 truck propel his company or sink it? Could another dealership offer a cheaper deal?

How confident was this consumer?

“I need to go home and talk to my wife,” he says.

“Give me a number that will keep you from walking out of here today,” Kleekamp says, remembering his boss’s instruction.

“I don’t know if there is a number yet,” Foster says.

Kleekamp pushes it for a few more minutes with no luck, then nods and says he’ll expect a call. For the next hour, he waits at his desk and watches the floor. Customers walk in, and customers walk out. Nobody buys a car.

A few hours before his shift is scheduled to end, Kleekamp picks up the phone and dials Foster. Three managers circle near his desk to listen in. Foster answers.

“Have you thought about the truck?” Kleekamp says.

Here comes the latest verdict for an economy still trying to recover.

“That’s too bad,” Kleekamp says. “I’m sorry to hear that . . .”

The owner of the dealership walks back to his office. “Some days I wish I was an attorney,” he says.

The sales manager slams his hand into his fist. “We’re still getting our asses kicked,” he says.

Kleekamp leans his head against the wall of the cubicle and presses the phone to his ear. “I understand,” he says. “Maybe sometime soon.”

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