Do The Work 3 Years Ago with David Spisak

Kyle Mountsier: 0:00

We got to do the intro.

‍Michael Cirillo: 0:01

We're gonna do the intro first.

Kyle Mountsier: 0:03

Should we do an intro first?

Michael Cirillo: 0:04

Have you guys ever met David?

Unknown: 0:12

This is Auto Collabs.

Kyle Mountsier: 0:14

I have met David Spisak, actually. So probably, you know, there's certain meals in your life that

Paul J Daly: 0:23

you just remember the first time you met David Spisak. That's funny. It was so impactful that I remember the first time you met David Spisak, and I wasn't even there. Yeah,

Kyle Mountsier: 0:32

I was had business bourbon and cigars. Okay, well, Kentucky, very first one very first business permit. I haven't been to one since because, you know, gotta be a dealer. You got to sponsor the thing. So you know, that's where my boat is. But so I'm there. And the first thing is, you know, I'm just at that point, like, I'm fresh out of coming from a dealership, or maybe it's like, I think it's actually my second to last month, I'm still at the dealership. And I just come in hot, just basically angry at everybody.

Michael Cirillo: 1:07

Gonna be like, Oh, my gosh, just like, I love your No,

Kyle Mountsier: 1:10

no, I essentially, like just basically tell everyone in the room three times, like, Why do you keep acting like Dum Dums when you do, you know, customer experience stuff. And so he brings me up and he's like, this guy. He's actually challenging all you old folks in the room. And so later that night, he has me sit down next to him at dinner. And that was the first and last time I spoke that night. I'm just kidding. No. But no, I had a really impactful conversation with him just because of the way that he was saying, 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. And so it was part one of the like, things that lead to, hey, look, Kyle, I think you've got a voice that needs to be shared and auto. So a lot of that is it's he's part of that responsibility.

Michael Cirillo: 1:57

It's powerful. I mean, one of the things I've appreciate about him is it is clear anytime you speak with him, the depth of knowledge he has about how this industry operates not just from a dealership level, but the undercurrent. What's happening on Capitol Hill, like all the OEM factors, like the guy just knows this industry in and out. And the second thing I appreciate is when you ask him a question he actually thinks before he delivers his response, which, let's be honest, is sometimes a rarity in our industry, where there's just a lot of chirping birds, a canary in any industry, Michael, yes, but I don't work in those industries. So

Paul J Daly: 2:37

no, you don't. Oh, well, we hope you enjoy this conversation that we had with David Spisak

Michael Cirillo: 2:48

Hey, welcome to our very first episode of comedian in his car driving to get a coffee. I don't know if do you guys know this that David Spisak, our guest today is a was a stand up comedian.

Paul J Daly: 3:03

I knew that. i We knew that

Kyle Mountsier: 3:06

only recently. I'm still waiting for him to drop like a really, really.

Michael Cirillo: 3:12

David Wright remind me though, you've I mean, you you've shared the stage with Robin Williams, who? Oh,

David Spisak: 3:19

this is way back, but there would have been Michael Pollack or Kevin Pollak, rather Sinbad Bobby Slayton. Collie, a lot of bad yeah, he used to have that show. And TVs. Yeah. And I mean, a whole lot of guys back. And back in the day, of course, I started in comedy, before comedy really blew up, thanks to cable. It was really it was cable that really put comedy on a different level. And I had my daughter in 1983. And learn very quickly that comedy and being on the road was not conducive to being an all in good dad. And so I left. I left it for a long period of time. And then somewhere around 90, I'm sorry, 2006. I was in a comedy club and ran into somebody, an old old buddy. And he said, Hey, you know, you know, do you ever think about getting on stage? And I said, yeah, all the time. I 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're going to be back in New York. I said I will. And he says well, he says I know that producer out. I'll get you on stage. I said, isn't one of those things you? Yeah, sure. That sounds great. And so I said yes. without really giving much thought to it, you know, and you haven't been on stage at 20 years. And I haven't I'm not a I'm not a skid comic or a bit comic. I was more of a ad lib topical based and but I said sure. And then for the next 30 days, I had just you know, I was terrified and just had anxiety. because I hadn't done so long, but I did go on there and Caroline's and, and just so you know, when you're, when you're starting as a common egg as a comic, you're the first one out, right? And so you're gonna get probably three to five minutes, and then you're gonna get the red light. And the next one, next one. Well, this is a show that had six comedians on it. And so I'm back in the greenroom and in waiting and waiting, and I thought for sure, I'd be the first guy out, I wasn't second guy, it wasn't. And I got put up second to last was just kind of added to the terror and expectations. Yeah, and, and, but fortunately, you know, really, what it comes down to is kind of like the car business, you have to have 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. So, to me, I, the only thing I ever prepared was what was going to be my opening line 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, so are you going

Paul J Daly: 6:03

to the big question that we all have on our minds right now? Are you going to share your opening line with us? Well, let's see if I can see that fear. And

David Spisak: 6:14

if I could recall, if I could recall, it went something like this. Because the emcee mentioned that this is my first time back on stage in 20 years. And, and so I, I thought I'd roll with that. And so I said, hey, thanks so much. I appreciate the welcome. It's true. It's my first time on stage in front of a camera and over 20 years, of course, unless you count that webcam incident a couple of days ago, and there was a guy in the front row and I said, By the way, it's good to see you again. You look great. That 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, I got this. So, yeah, 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, but it went fine. And then after that, I just ended up doing some stuff back there at upper 75th, Dangerfield Caroline's and then also on the West Coast, and I ran that out for about probably three or four years and decided to retire once again. Well,

Paul J Daly: 7:28

that's perfect. Because just about a week ago, at time of recording, you held a live stream event in automotive circling around and kind of talking about the concept of EVs where how many hours was that? The three hours,

David Spisak: 7:45

it was eight hours, it was eight hours. So you guys can appreciate this. conceptually. It started out as a three hour event that turned into a five hour that gave birth to an eight hour event. And oh my gosh, I didn't really do that either. Yeah, it was it was eight hours of telethon. Yeah, it was longer than some relationships that I've had. And no offense to any of those ladies. But listen, I was a teenager. Okay, we all learn. But anyways, it was it was really a spectacular event. thanks to people like you, Paul. And I was just on on a call with Chase, Fraser, Ron Frey, Jeff Pohanka, and Michael Dunn, and so many others that you guys know, Liza spectacular as always. And just, you know, it was just, it was just really wonderful. You get kind of lost, I'm sure you feel the same way guys. But you get kind of lost, becoming a member of the audience and listening and just really enjoying these genuine conversations. And so I learned a tremendous amount. And I did what I hope to do, which was 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 navigate through this transformation to EVs.

Kyle Mountsier: 9:08

What What was the prevailing thing that you are hearing and seeing dealers really work to grapple with when it comes to the Eevee? Landscape? Like, is there? Is there one thing that everybody's the most concern with right now or the most interested in? You know, we've got, we've got things like tax credits on the hood, we've got inventory, you know, demand not being met. We've got the horizon of all these, you know, new features, or we've got charging or we've got the financing and what what are you seeing most dealers key in on when it comes to their preparation?

David Spisak: 9:47

I think for starters, just consider this because it's extraordinary. Normally, isn't it true that regardless of the business, whether you're in real estate, you sell widgets, you're automotive, your service facility, you know, franchise dealer shop or whatever. But we're a sales department, whoever does the best job selling wins is that true? You win, you're gonna get the most clients, you're going to make the most revenue, you're going to generate the most profit and you're gonna make the most money. It's its inverse with EVs. The if you think about this, the dealer that sells the most EVs this year, is likely going to have the largest hit to their net profit. And that's just weird. I mean, it's peculiar, and it's interesting. And so how do I navigate the reality that when I sell an ice car, I have this predicted outcome? From a profitability standpoint, I know what the average ice core is. I know how much they supply. I know how long it takes to sell one. I know what the typical gross profit outcome is. I know what it's going to mean for me from a net perspective and then my service department, all 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 in growing, every quarter, you're getting your allocation is fewer is comprised of fewer ice vehicles and more EVs well hold on. That's not what I want. Because I want cars. Right, 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, give 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. This is something where, interestingly, you know, for three years, you've all heard the expression a million times, either life happens to you or you happen to it. And what does that mean? Well, normally, when you happen to it, the inference is that's when you are the force of nature and something good is going to happen when it happens to you. It usually kick your butt. Well, 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. But now clock has struck 12 and Cinderella style and and now we're back to the real world, you gotta sell cars, prices are going up. Staffing is going up floorplan 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. We're up 60 plus percent last year, all in including EVs, and our sales tax rate, year over year was up maybe 10%. At best, the delta between the two bells, margin compression spells additional cost to sell from advertising expense, sales comp, the ugly four letter word minis has come creeping back into conversations. And it's just a different world. So all of a sudden, EVs are exacerbating that if I have one of those franchises, you know, I'm in a different world. So 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? Well, it was Lexus. It was Toyota. It was Honda, it was Subaru. And believe it or not, Kia was in the top six as well. And you think about the majority is none of those are dominated by EVs. All of them continue to subscribe to the one too few is better than the one too many. So they acted more like a Rolex store than then like a Walmart, for example. No offense, Mr. Buffett, but, you know, fine organization. And they do. But the reality is that thank you, I mean, the reality and just as 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, they track every shelf, every location, and they pay attention to that data. We're not the OEMs are not paying attention to the data. We have a massive supply demand issue and just this morning on Squawk Box and CNBC, you know, Tesla's stock price was lowered by Goldman Sachs. And, you know, there is clearly a supply demand issue, there's a big lag and separation between what we're producing and what people want to buy.

Kyle Mountsier: 14:42

Okay, so but here's the here's my problem, then. And I'll just, I'll just say, let's keep personal problems. I'm gonna, I'm gonna bring this this is going to be personal. No, I'm just kidding. This point is and Ford has just said that they're going to move all of these employees over to their ICU. pool of machines and start producing more on the ice side again. But you've already got all of these manufacturers have poured millions, if not billions into producing facilities that are machine tooled to produce these EVs. So it's not like it's not coming, it is going to come. So we either have to shift the demand matrix, or work with the demand that we have, which is going to be that's going to be I think the hardest thing is figuring out what the dealers have the responsibility to almost help create the demand within the buying network, because it's not like the vehicles haven't either been made already or are already ready to be produced. And these OEMs aren't turning away. The the pressures from the political landscape right now. 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. So my question is, like, how do we stop complaining about us 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 as a dealer, if you know that the supply is coming? How do you prepare to make sure that you can be ready, like 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 and landscape?

David Spisak: 16:19

So first of all, fantastic the way you framed it and completely appropriate, I'm going to uplevel it just one little thing. All that has to be done in the next 12 to 18 months. Right? All of it. Okay. And I'll tell you why. Is because the Chinese are coming. Okay, and it's not a joke. These are not the cars they were building 10 years ago, that would have had a tough time handling a collision with a shopping cart. These 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. It's going to take five or eight years for OEMs. But here's the key thing for everybody that that college is brought up. How do we stop complaining and start moving forward in a productive way? Because like it or not, they're not coming, they're here. And guess what they're multiplying like jack rabbits, we'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 of things are really, really important. Number one, is, first of all, you're either going to decide to be all in or you're frankly going to be on the outside. Looking in. Now you could say well, I'm okay with that because they lose money. You could say that now. Well, wait till your market is five or seven or eight or 10% EVs. Are you going to tell me I'm okay, saying goodbye to five or 10% of my new car volume? Do 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. Second thing is she specifically said she has a Eevee specialist in each and every dealership. I think that's a rarity. And it needs to change, Rarity, you have to lean in. 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. And 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. And 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 a year ago, two years ago. She'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. So focus on what you can control and that is delivering a absolutely wicked experience. According to McKinsey, according to Forbes and everybody else, Evie buyers lean on experience more than ice buyers, deliver them a spectacular experience. Make sure your people are knowledgeable, and you will be able to optimize what we have to work with today. But more importantly, you'll be in a position to absolutely crush it. When things start turning around for the better, they're gonna get better, they're gonna get more reliable, the batteries are gonna start being formed and 500 miles and they're gonna get more affordable. When that happens. You want to dominate. Lastly, why 15 or 18 months. Like I said, when BYD shows up with their cars made in Mexico, they still qualify for the 7500 and by the way, there they are specifically courting the top 50 dealer groups out there. They'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 if you compete with the best of the best, and oh, by the way, the years 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. I'm going to lean in in investing my people said my soft.

Kyle Mountsier: 20:24

Attaboy, there we go, Hey, everyone.

Paul J Daly: 20:28

We don't we all look at each other.

Kyle Mountsier: 20:30

Oh, look, look, here's the thing, I 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? Because that's what we're all about here. And whether you're talking about EVs, or cleaning the toilets in the bathroom, invest in your people, right? Because every single person counts. And they're the ones delivering the experience to the frontline. It's clear, you're passionate about that. I can't wait to see what you do with this series of content for dealers over the next year. David, thank you so much for joining us today.

David Spisak: 21:03

Oh, it's always a pleasure to hang out with you guys. I love your creativity, your ingenuity. But what I love most is your people first mentality and that you're educating, informing and passionately communicating. We don't know how the stock market is going to do this year. We don't know what's going to happen with dealerships I suspect profits 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. You said it. You should wear shirts like that. I don't know. Love your people?

Michael Cirillo: 21:48

Okay, well, there's a couple of things that impressed me. First one is I cannot speak and drive. I just can't like and I've arrived at the age where I have to turn the radio down to find parking. Ah, so the fact that he was driving in the snow or ice and was able to formulate deep thought provoking statements about current affairs of EVs in this industry. Mazel tov. Well,

Paul J Daly: 22:20

the print, the premise that he talks about, like where you are today is not because of what you did yesterday is because what you did a year ago? Yeah, I don't, I don't think he could, he could put it any more clearly, especially when it comes to the topic of EVs and the propensity of this industry in general to think in 30 day cycles, maybe if you're lucky, in quarterly cycles. But without a doubt, when he mentioned Liza Borches thinking over the horizon, saying like, Hey, this is a small percentage of my market right now. But I'm going to dominate when it becomes a larger percentage, that perspective is a drum that he always seems to talk about, right, like 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, leading with leading with that message, I think, is a part of the solution. I mean, I don't

Kyle Mountsier: 23:14

know his track with me, like Tesla is dominating the market, not because of what they did three weeks ago with their pricing change, that's for sure. They were willing to do the work 10 and 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

Michael Cirillo: 23:35

already it reminds me a conference about two years ago. Gosh, I gotta remember a name I'll get it I'll get it to Nathan so he can put it in the notes. She's an investor that only deals with future and developing you know, research and things that AI obviously robotics, farmers pharmaceutical stuff and advancements in technology there and specifically said Tesla she did not say Evie she said Tesla, and she said that the the hedge there is the battery technology. We're all busy talking about the vehicle. Elon and Tesla are they know that it's about the battery technology that they've spent this whole time developing? And and I remember being like Ha never thought of it that way.

Paul J Daly: 24:26

And he was like, that's why I'm richer than you are.

Michael Cirillo: 24:29

Yeah, well, yes that but also shortly thereafter, you saw an immediate like all of the different Evie manufacturers, different automakers are like, Oh, we're gonna now support the Tesla charger. And I was like, there it is. So I mean, there are definitely some undercurrents that we're not talking about yet that we shouldn't be talking about when it comes to EVs. But there you go. I was gonna say before before you make your last point, Kyle, I was gonna be like, hey, but I'm curious like what What did you pick up on? On the conversation? You have that between you and David speak Zack that me and Paul watched?

Kyle Mountsier: 25:09

Yeah, I mean, I just always love bantering with him because I feel like you know, it's it's fun because I get to like get my get my say in and you know, in a lot of our world, you know dealing with people that maybe haven't worked in dealerships, you know, for me like to come in from the front lines, like he, he lived for so long in the dealership world and still is extremely steeped in, like, the operations and so, you know, understanding that operations isn't plug in the new widget that it's a lot deeper than that as a lot of fun for me, so I, you know, I got the got got the lion's share of the questions in, and so appreciate that. But, hey, look, we're gonna keep having this conversation. So if you want to keep having this conversation, we're always going to do it here on Auto Collabs. We'll probably last a little bit too. So you should come back for the next one. On behalf of myself, Michael Cirillo, and Paul J. Daly. Thanks for joining us Auto Collabs.

Unknown: 26:02

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