Asbury Yard Sale, Tesla Cuts Deeper, TikToker Blames the Dealer

Paul J Daly: 0:20

Can you hear it, Kyle? It's the final countdown being played. It's the last day of the month and everyone's excited. We're talking about Asbury selling stores. Tesla cutting deeper in a tape talker. Who's blaming? Oh, guess who? They take your responsibility? No, they're blaming the dealer. We're gonna tell you.

‍Kyle Mountsier: 0:38

We'll talk about it. We'll try and you know, we'll try and keep it civil around here.

Paul J Daly: 0:43

We have a fun show today. I mean, those stories are gonna be fun. Our first one, we got a comment from Alan Haig. And we have a picture of Alan Higgs dogs on the show. And I get to show you something that you don't even know I have.

Kyle Mountsier: 0:57

Oh, no. I'm already jealous that ah. Oh, this

Paul J Daly: 1:04

scarf. Oh, Maurice came in yesterday for these Bo Paul. It feels better than last year is

Kyle Mountsier: 1:12

even good. I can tell. I can tell. It's got

Paul J Daly: 1:14

an HD. Let's just give the shout out right now. We want to thank our friends at dealer on for being the logo up there, too, for being the swag sponsor this year. I feel like dollar for dollar. This is the best sponsorship at a soda con. Because you get we're in and around you and I don't take these things off the whole weekend. We're showing it on the show. Just remember that next year. If you're looking for one Oh, in the back, Scott, kind of like the ASOTU CON conversation bubble on it looks really great. Yeah, if you don't know, this is our third asoto con, which means it is our third ASOTU CON scarf. And I'll tell them why we do a scarf every year give it to kind of hear it. Okay, I was gonna say I think you need to tell them okay, so I, I didn't pay any attention to soccer my whole life ever. And then I met Kyle. And I started paying attention to soccer. And what I paid attention to the most is the absolute fanaticism and community around the sport. I can't wait to go to my first game still we're gonna believe take

Kyle Mountsier: 2:12

energy around we're in this together is unlike almost no other sport. And

Paul J Daly: 2:21

it's wrapped up in a garment. And this is a rite of passage because you can have ones that show you're an OG you can have ones that show you're in the moment and your support of the team. It's it's easy to wear with everything. And so when first the Soto con came around, there was only one appropriate piece of swag that we knew he had to have. And that was a soccer scarf. Or football. If

Kyle Mountsier: 2:41

you're watching, you'll tell you can tell that I am a little two or three. Got a couple, two, three,

Paul J Daly: 2:47

I got a dozen in that shot easy. And I know you have more around there I've been in that way. It's kind of nuts how and so if you come this year, you will for sure every attendee slash participant gets an ASOTU CON scarf. And I'll tell you this, so fun to watch these walking around the whole time. We also got these really sweet more than Karstens. We're handing out some of these and everybody's

Kyle Mountsier: 3:11

like, everybody's gonna be running in like, give me give me the swag

Paul J Daly: 3:15

bag. We went all out this year, and it's gonna be so much fun. If you haven't heard about it or seen about it on LinkedIn. Or you probably will. But if you haven't go to ASOTU con.com Check out the speakers the agenda. Kyle, we've been doing panel prep calls for the last two weeks, and which are like these 15 minute panel prep calls where we get everybody in. And basically, I had so I want you to tell me what what your favorite was so far, the one that stands out in your mind mind. Three auto trade association presidents plus Mike Stanton, talking about dealers advocating for the voice of the consumer. The name of the session is on day one, your voice our fight how dealer associations are elevating the voice of the consumer with Pete Kitzmiller Mike Stanton, Don Hall of Virginia dot John Devlin, Pennsylvania. And this is a juxtaposition of how a lot of the world views dealers and dealers are saying that you know, actually with through all the V mandating and all this stuff dealers are like we're advocating for your voice in legislation and in actual practice. So that's my favorite one. I can't wait to hear that. How about you?

Kyle Mountsier: 4:17

My favorite one was pitch tank and so we've got two rooms the first day of pitch tank you know pitch tank is close to my heart because I love tech. I love what things people are doing on the software side of the business. You love telling people what you really feel. And then I love telling people what I really feel and I'm on this call. I got Chase Frazier, Steve green field, MIT chatter on and she got Bill Charis is coming from home and Stratego night.

Paul J Daly: 4:44

These cats like this is like the tippy top crust of the A team, right? Everybody

Kyle Mountsier: 4:50

in this in these two things knows exactly what is up in the SAS world, not

Paul J Daly: 4:55

just the starting lineup. It's

Kyle Mountsier: 4:56

like the first five batters. Exactly, and so If you are wondering what's on the horizon and whether or not you should be paying attention, come listen to these people ask the questions that you would rather ask. Because they were already like, Can I do this? Can I? I'm like, Yes, you can't please. Yes, you can ask those questions. I

Paul J Daly: 5:15

don't know. We got to see there's some there's some toxin. I won't talk about it yet. We I think we've pitched tank needs to come back in a strong way after soda con, it's gonna be nuts at ASOTU CON. But let's we should figure that out. We should. If you haven't, if you haven't checked it out, go to a soda con.com Check it out. Look at the speakers, you can still get a ticket. If you're an industry partner and you want to be a part of the event. We still have a few places left so email or DM us you can email crew at a soda.com or fill out the form on a soda con website. We'd love to include you I mean you can't be the swag sponsor dealer on crush that one. But there's a lot of other stuff too that we can still put together for you. Let's talk about some let's get into it. This is all right. It is because we have pictured dogs at the end of the story. Asbury Automotive News ranked fifth amongst us dealership I mean so us dealership groups is looking to sell 10 of their dealerships after a recent divestiture of coons Lexus in Wilmington, you all know are many of you know. You know, Asbury acquired Coons and the group just sold coons Lexus for 102 million aligning with Lexus franchise limits, so you can only own eight stores total. So they own that across the country. So they listed 10 stores for sale for a total of 242 million million dollars in assets, including the dealerships real estate, goodwill, et cetera, CEO David Holt said there's a highlighted focus on selective acquisitions and maintaining shareholder value. That's what publicly traded CEOs are supposed to say. Noting a leverage ratio of 2.6 times earnings of the group currently has 157 stores still. And they've done a stock buyback this year 240,000 shares for 50 million CEO David Holt said in the current market, there's certainly a lot of stores on the market from an m&a standpoint, but I think we want to be extremely selective. So we sent a little message to our friend Alan Haig, founder of Haig partner today, we say hey, what do you think about this? So we got a statement for him this morning while he was actually walking his dogs. Naturally, I think now's when we show a picture the dogs. Dogs, right. Lena and Kitty, I don't know which one's the one but naming a Dog Kitty I think is just a great play. So as Lena and Kelly and why Allen's walking his dogs, he said many retailers that grow through acquisitions end up with smaller stores that were part of the groups they acquired. While the smaller stores can be good for smaller owners that can be difficult for large groups to manage. So periodically, they will divest some of the smaller stores. He doesn't mention the framework agreements with OEMs that requires them to sell the Lexus store but he does say they get to pick which of their stores they want to sell. So it wasn't like this was the last one and first one out they said they he they selected this one. And he said they also look at things like areas with low to negative population growth, high costs, etc. He said divesting stores doesn't mean they are declining in any way. It means reallocating capital to better uses

Kyle Mountsier: 8:07

Yeah, you can tell they're lining up some capital right there. They're repurchasing some shares for 50 million so that, you know, they're they're like moving around money to position for something. That's what that's what's on my mind is like, Hey, we're divesting 10 stores, we bought back some shares so that we're not beholden to some shareholders, we got some different, like, there's some money movement happening around intentionally, in my opinion, to make a big move. So I would, that's what I would look out for is for Asbury to make a big move here, coming up in the next couple quarters. Yep.

Paul J Daly: 8:44

And hey, partnership, hey, partners is going to have some representation on the stage mainstage at a soda con, we're having a big m&a panel talking to three major firms going to have a great conversation around valuations and legacy, and when's the right time to sell. So if you're kind of like curious about the m&a world, but you don't want to raise your hand because that can get tricky in come listen to people talk about it and ask your questions anonymously via the app. Just say And speaking of the app segway, that's it's got a great app, by the way. They do it's I know, it's just really good. But Tesla is continuing an aggressive cost cutting strategy announcing further layoffs that affects senior executives and get this they are laying off the entire 100% of the team working on a supercharger on. Obviously this comes a month amidst a lot of other broader tech layoffs and a pretty big earnings shortfall that was just reporting their last quarterly statement Tesla's laid off more than 10% of its workforce, including these high profile profile executives are approaching that 20% of the company being the elimination of the entire supercharging team led by Rebecca to new CI singles a potential pivot in their approach to charging infrastructure. I mean, you think about my car, this is the person that got like the nacsw adopted across all OEMs are like great, thanks. See you. Bye. Thanks. Bye. Yeah, a long way off. They see departures of some key personnel like Drew beg lino, VP of powertrain and energy engineering. And you know, like these they're trying to talk about doing a shareholder payout is apparently pretty sizable. So it's they got layoffs, they had shareholder payouts impending. Elon Musk said, there has to be a stringent review of all executive performance stating, quote, executives whose subordinates don't obviously past the excellent, necessary and trustworthy test will find themselves relieved of duty since the announcement shares are up 15% still down 36%.

Kyle Mountsier: 10:42

Year over year. Well, okay, first of all, Down 36% Up for

Paul J Daly: 10:48

what it was a little 15 cents this week.

Kyle Mountsier: 10:51

Last week, I think it was earlier this week, like, you know, you you've you've told me this, and I haven't read the book, but the strategy for Elon is like there's resetting buttons, always and forever. And I hate that the quote of like, do your peep, are your people good? Have you gotten them good? If not, are you the right person to be in leadership? That's a question that every single company should be asking, Are my leaders making the people better? And are they getting their people to the right place so that we can be successful? And if they're not find new leadership? You know, we've, it's like, people, people will yell and shout at large layoffs. But I think a lot of these companies, it's just a part of the rhythm of the company. And for me, it's like, hey, look, I got a whole bunch of people that probably know their way around auto. So no reason why you can't go find those people and bring them into into the fold. Yeah,

Paul J Daly: 11:51

without a doubt. They even said that one. One guy who had, at one point slept in his car so he could work more hours, was also laid off with Elon Musk. It's very, like the decisions are very binary. It's not like oh, you did that. I mean, if you ever have a doubt, like is Elon Musk a car guy? He's like, Oh, that was great. Last month this year.

Kyle Mountsier: 12:14

It's also you saw a car guy he is a car guys.

Paul J Daly: 12:17

Well, we'll see. We'll see what happens. I mean, obviously he's got a history of hitting the reset button and be able to bring things around. It's it's tough to bet against Elon Musk as erratic as it can be sometimes, but that's what's going on. Speaking of erratic as it can be sometimes sad is one time to talk about tick tock.

Kyle Mountsier: 12:35

A tick tock personality named Blasi are known, recently faced the harsh reality of auto loans when she decided to part ways with a Chevy Tahoe due to overwhelming interest payments totaling in her terms 50 grand Arnauld her original loan was for an $84,000 Tahoe, which is

Paul J Daly: 12:56

fully loaded, fully

Kyle Mountsier: 12:57

loaded Tahoe came with a 10.2% APR from GM Financial, great captive bank, right? She had no downpayment and negative equity from a trading vehicle. And her payments were around $1,400 a month. And the way she felt was that it was barely making a dent in the principal amount. And what you're gonna need to do is you're gonna need to click on the link in in the story, right? I know that a lot of people say this all the time, but you need to go worth your time. It's worth your time to understand, like, not just her video, but the comments on the article, the comments and the Tick Tock thread on the way the perception of the auto industry becomes the reality. Now, there's some slight comments about her interaction. There's some slight comments about the the way that dealers treat people. But when you look at the overwhelming majority of culture, you see this misunderstanding of the industry of interest

Paul J Daly: 13:58

rates, you say, tell us what she said what she

Kyle Mountsier: 14:01

said. And then she said this, I did not go with my husband. And as a female, I feel they took advantage of me. They knew I really wanted to the car and was and I was by myself. Like

Paul J Daly: 14:13

that's the feeling that Saprissa aka the dealer ripped me off, right for the to set the record straight. That is not a rip off interest rate in this day and age for a car that expensive with negative equity, and we don't know what the credit score is. And also you go on in the video and realizes she also did a similar thing buying her husband a truck with a$1,600 a month payment with probably a higher interest rate. And so this is again, like you said, this is how the auto industry gets a bad perception in our culture. Right? It's just this victim mentality of like, they took advantage of me, but actually you just made a really bad decision. Yeah, right. And you're

Kyle Mountsier: 14:54

underscores the requirement for education along the purchase process. Yeah,

Paul J Daly: 14:59

I mean, I want even say it's a bad decision, right? Everybody makes decisions for different reasons. Once Once I got my first job at a dealership, I was like, 22 never bought a car from a dealership never leased the car, right? And I said something dumb. like kind of like I just didn't know. Right? It was kind of arrogant. I said to you, why would anyone ever buy a new car, a used car is so much better value, right? And he like, very kindly explained to me the essence of value, right and why someone would want to pay even though financially you pay more depreciates faster, but like the value that it brings to be in a new car and and it just literally is the very beginning of probably like week two of my career in automotive, then it's

Kyle Mountsier: 15:42

it's just simple education and understanding, right? It's the same reason why so many people are afraid of leases. But depending on the person, the driving habits, the desire for new cars, like leases actually make a whole bunch of set or

Paul J Daly: 15:55

standard that a car is a depreciating asset and having equity into depreciating asset actually ask an investment advisory isn't a good idea. Right? Yeah.

Kyle Mountsier: 16:04

I mean, you know,

Paul J Daly: 16:06

I know it was fun. It was fun to bring that out. Like, Oh, yeah. Oh, that's been said, Oh, it's

Kyle Mountsier: 16:11

interesting enough, click on the link in the show notes be in and it's an awareness of broad culture and its reaction.

Paul J Daly: 16:18

It's one of the reasons we do what we do. And we want to keep doing more of it through the more than cars Docu series. We do want to cross the consumer divide with our content when the time is right. But first we need you know more people in the industry to know about it. There you go. Which is why we have live events called a soda con into a day. From today it starts come get a scarf get swag, make relationships and learn things you will never forget and will make you your life and your business so much better.

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