At 9 a.m. Saturday, Jeff Walls, 41, former Fairfax County schoolteacher, and father of three and rookie car salesman, straightens his tie and prepares for battle.
He is getting ready to do the nearly impossible--sell new Chevrolets in the middle of one of the longest auto industry slumps in 50 years. Between 9 a.m. and 6 p.m. he will use every ounce of his ingenuity with a rebate-wise, penny-pinching public, many of whom will doubt his integrity, question his profits and, of course, kick his tires.
"Its a real contest between the buying public and the auto industry right now," Walls says. "The competition is tough. People play the rebates off you, they'll beat you to death . . . Every day is a contest."
In nine hours, Walls will see seven customers at Jim McKay Chevrolet, a 25-year-old, mid-sized dealership off Rte. 50 in Fairfax. He will sell one car and make $40 in commission -- slightly more than 25 percent of the dealer's profit. That is a wage of less than $5 an hour, but it's still more than the $3.35 an hour minimum wage Walls gets when he sells no cars. And that is all too frequent these days, even though Walls is McKay's No. 1 salesman.
What makes Walls different from his fellow car sales people is that he chose his poison -- he gave up a$30,000-a-year high school teaching job in Falls Church for it. Tired of teaching, sick of school bureaucracy, weary of the annual haggling over salaries, he decided to go after the $50,000 to $80,000 a year that dealers say a good, very good, car salesman once earned.
"Things will turn around," Walls says optimistically. "I think we're all hoping this spring will be it. At this point, that's all we can do--hope. I'll give it to this fall. Then I'll have to make some hard decisions."
New York auto industry analyst David Healy says sales of new American cars may improve after the next few months, bolstered by the scheduled personal income-tax cut, the decline in gasoline prices and the rise in used car costs.
"But I wouldn't hold my breath," Healy says.
January was Walls' best month. He sold 17 cars and made $2,300. But February and March yielded only $2,200 combined. That was still better than December, when Walls sold only three cars and made $335. In his first seven months on the job, he has made about $8,400.
Walls' wife already has one part-time job, and is taking another. He has had to forgo his church pledge. Last Saturday he took his family to the movies for the first time in months. "Its been a big adjustment," he says. "No question about it."
Saturday is the big auto sales day, but even Saturdays are unpredictable now. If the weather is bad, people stay home; if it's too good, they go out to play. And many Saturdays have the misfortune to be part of holiday weekends.
By 10:30 a.m. last Saturday, Walls had seen two customers. One, a Fairfax City couple, was picking up a car they had ordered two months ago. Like many people these days, George and Mary Martin have driven their old car for 11 years, racked up over 100,000 miles on it and ordered the new car through a buying service so that Wall's commission is fixed at $50. The Martins are debating whether to accept delivery of the car since an armrest they thought was adjustable wasn't.
"I don't know, I just don't know," says George Martin.
"I hate to bother to look around any more," says his wife. After a half hour, they decide to take the car.
After they've left Walls says, "Nobody's buying for fun anymore."
For these extraordinarily dismal times, Walls and his colleagues have no extraordinary sales techniques. There is still the "turnover," when a salesman turns a balky customer over to a succession of managers in an effort to close the deal; "the bump," when the salesman agrees to a deal but comes back a minute later to say the sales manager will only sell for a few dollars more; and the "demo ride," where the test drive wins over a customer when all else fails.
What's new in the industry is the rebate and financing bonanza. Chrysler is offering a five-year,50,000-mile warranty; Ford has a rebate offer of 5 percent off the base price, plus a two-year extended warranty; GM has replaced its $500 rebate with 12.8 percent financing.
But floor salesmen like Walls have considerably less room to dicker these days. As prices have jumped in the past two years, dealer markup has shrunk from about 25 percent to an average of 15 percent. While Walls won't sell a car at cost, he says that to make a deal he has often gone "down to rock bottom"--selling a $12,000 car for less than $100 over cost, which leaves him with his minimum commission -- $40.
"People are funny," Walls says. "They'll come in, tell you they know business is bad and that things must be tough . . . then they want you to pay them to take the car away."
Not all customers even know about the American auto industry slump. For instance, an elderly Falls Church couple was one of Walls' last customers Saturday. They kept him busy for two hours dickering over the price of a Caprice Classic sedan. The car lists for $11,400, but the couple didn't want to go higher than "just over" $9,000.
Walls countered with $10,256, which the couple turned down. Sure that the dealer markup was about 21 percent--as it could have been only a few years ago--they said there was still more than $1,000 in profit to whittle away at, and left without buying.
But Walls' $10,256 price actually was about $300 above dealer cost, which would have earned him a $90 commission, and he was disappointed. "I think I'm worth it," he sighed. Three days later, the couple returned and bought the car at about the same price.
"You never know," says Walls. "It helps when it finally pays off."