Episode 2: Adding value (to the people you serve and the community you live in)

    by | Mar 9, 2021 | Mitten Money Podcast

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    Episode 2: Adding value (to the people you serve and the community you live in)

    In this episode of Mitten Money, Dick Garber, President and owner of Garber Management Group speaks candidly about leading an organization in the middle of the pandemic, supporting the community, and taking over the family business at 25 years old. As an employer of over 2,000 people, he will also share his secret to employee retention and maintaining a conscious culture. 

    Being named President of a 75-year old family business at 25 could seem like an exciting and yet daunting task. For Dick Garber, all he saw was an opportunity. An opportunity to make some tough decisions that needed to be made and position Garber Buick for exponential growth. Dick also gives advice on employee retention, and it is no secret why people remain loyal to his business and the Garber name. Dick and his team have created a conscious culture where ownership and organizational pride in the Garber brand are felt at all levels.

    When talking about his love for the community, his thoughts are heartfelt and sincere. “I believe that business’s calling is greater than just a return on investment for the shareholders, it’s got to be good for the entire entity when you build that culture. That includes all stakeholders – the shareholders, the community, the staff. Everyone who touches your business.”

    Connect with Dick:




    Dick Garber  0:00 

    But the biggest challenge I think young leaders have leading more experienced people is you have to add value,

    William Zank  0:09 

    Small businesses are the backbone of the American economy and Michigan, but only 50% will make it five years in business on mitten money host William Zank will focus on helping Michigan-based business owners get answers to the tough questions that will help them succeed. How do I expand my business? What options do I have for retirement? How do I move forward? Having worked with small business owners throughout his entire career and with excellent attention to detail and strong analytical skills. William of Tri-Star Trust will unearth answers to these questions and more. You can subscribe to the podcast and learn more about how William and the Tri-Star Trust team can guide your small business at TriStartrust.com.

    Good morning, good afternoon and welcome to another episode of Mitten Money, this podcast will focus on helping Michigan-based business owners find the answers to the tough questions that will help them succeed. This week we’re excited to have Mr. Garber, who is the current president and owner of Garber’s management group which employs over 2000 people and is headquartered in Saginaw, Michigan. They have been in business since 1907 and currently have over 23 car dealerships spread across the country. He’s also been a generous contributor to many community organizations and nonprofits throughout the Great Lakes Bay region. Without further ado, welcome Mr. Garber to mid money.

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    Dick Garber  1:21 

    Thanks. Will, a pleasure to be with you.

    William Zank  1:23 

    Well, thank you so much for taking some time out of your day and spending some time with us and especially with this podcast. So tell us a little about yourself, what’s your background and what’s the path that you took to get to your current position.

    Dick Garber  1:34 

    Well Will I think you gave a bit of my background but long story short, I’m third generation in a family business. My grandfather went to work for the founder of General Motors Willie Duran 1907 went to work for Buick motor division actually be Ford General Motors was formed Buick was an entity before the automobile Chevrolet and Buick all came together, and he grew up in the Lansing area and worked directly with Duran. His job was establishing dealerships and he established in his first six months, a dealership location in Battle Creek Michigan, and one in Saginaw, Michigan, those are factory stores and shortly after they opened Duran Buick they had no money. They had to close them, and before they closed the location in Saginaw my grandfather got asked if he could buy the location and sag and only got a couple of partners he didn’t have any money. And that’s really how Garber Buick came about in Saginaw in actually about 1909, we promote 1907 because that’s when Garber and Buick came together and from there he grew the organization he had six children, four boys, they were all in. And my father, Dick ran the Buick store in Saginaw, and he passed away at a very early age he passed away in 1972. I was 16 years old at the time, and I pledged to my dad that I wanted to follow in his footsteps I wanted to be a car dealer and run Garber Buick was really what the goal was my uncle took over the business, and my mentor a gentleman by the name of Brady Denton. Brady was very, very helpful to me, taught me the business, and promoted me to be with motor vision and Buick approved me to be a dealer on my 25th birthday in 1980 so that’s kind of how it all started in 1980 was an interesting time high-interest rates, interest rates in the high teen’s nobody would likely remember that high gas prices, high unemployment, it was really a very difficult time. But honestly, what a great time to take over a business because it gave me a chance to make some of the tough decisions that needed to get made in the business it had been there for 75 years, and the tough economy and business conditions, give me a chance to do that and turned out we’re halfway decent at it and then we wanted to grow the company.

    William Zank  3:43 

    From there, there must have been a really interesting ride taking over the company at the old age of 25 and said you might talk a little further into that and then how maybe different peers were also responding to more of an uncharacteristic younger owner within the business.

    Dick Garber  3:59 

    The key is you have to add value, irrespective of how old you are, but the biggest challenge I think young leaders have leading more experienced people is you have to add value. And if you add value to their life to their career, they’re going to accept you, and you’re going to be just fine. The challenge is when you don’t add value then that you’re not going to get their support. And you can have real challenges, so I knew that folks, obviously I along the way developed enough competence, that I could add to their success to their career success. And once that starts to happen, then they’ll follow you, but you’ve got to earn that

    William Zank  4:35 

    no definitely that makes sense. And so talking a little about challenges obviously 2020 has been a very irregular with COVID-19. How did the coronavirus affect your businesses,

    Dick Garber  4:45 

    the automobile industry has I think been an anomaly compared to the general economy, although there’s a lot of businesses and, and a lot of industries that have really thrived in 2020, in our case we do business in six states. And when the pandemic really hit started closing us down in March, we are out of business and essentially for the six states we are fortunate that we remained open in Florida and South Carolina. So we had a little bit of revenue coming in but we’re really out of business from mid March, really almost until June 1. And then, once things opened up again. You know, we had the phenomenon of pent up demand, we had the stimulus money that put a lot of income in folks pockets. So, buying a car became reasonably popular the challenge for us was our supplies were very limited. Most of our brands and franchises or General Motors we just come off the strike and we’re just getting back to a tolerable day’s supply and then we had the pandemic. And we didn’t get inventory so we experienced the phenomenon of greater demand for our products than supply. So, a car market that the last previous five years sold over 17 million cars. It was really a buyers market. It’s been a seller’s market for the last six months of 2020, and dealers and ourselves included have benefited from low carrying costs, historically low interest rates. We haven’t been spending money on marketing, our advertising costs have been slashed in half, in some cases more, and then because we’ve had limited product our margins have gone up. And there’s really been a feeding frenzy for some of our hottest products, particularly trucks and SUVs, as a result of retail automobile business, even though we didn’t sell as many cars as an industry, we’re going to sell about 14,000,006 versus for 17 million the year before it’s down about 16%. But that being said, financially, it was a very rewarding year.

    William Zank  6:42 

    Have you started to see more people buy less cars and morph into buying more of SUVs and crossovers we sure have, Will.

    Dick Garber  6:48 

    and it’s a combination of reasons. Number one, the sport utilities across those are have become so efficient. A lot of car buyers are purchasing them, but candidly there aren’t many car options, any longer, as an industry 76% of the vehicle sold our trucks and SUVs and only 24 cars in our companies closer to 10% cars, because many of our brands don’t even offer them any longer.

    William Zank  7:13 

    Is there a reason behind the other automakers not offering the smaller sedans or the sedans in general?

    Dick Garber  7:18 

    Manufacturers predicate all their decisions on supply and demand, and they saw the desire and the demand for cars continue to decline. So they kept building fewer room, and then it’s kind of the law of diminishing returns, and then you don’t build them you can’t sell what you don’t build the dealers you can’t sell what they don’t have in stock. So it’s a combination of things. There’s a thought that the millennials are going to be, they grew up, you know, in the backseat of vans and with soccer mom and that sort of thing that they may want to go back to automobiles, something different that they grew up in, but time will tell, but it’ll be interesting that transition. Now, a lot of the high end a lot of electric cars are still producing automobiles, but Chevrolet Ford Chrysler, not many car offerings just a handful in there for folks.

    William Zank  8:04 

    So car sales like what you’re describing, like other industries can be cyclical, whether it’s maybe COVID-19, or other cyclical trends going on with the economy. Does that make planning for certain life goals tough,

    Dick Garber  8:15 

    the business used to be very cyclical and I’ll take Michigan, for example, our business climate the season, fall, spring winter, used to have a big impact on car sales candidly, it doesn’t. Today, we sell cars when the manufacturer wants to sell cars. Our markup is so small on new cars, but the manufacturers got a lot of money to work with so when they decide to put money on the hood when they decide to put a lease special together. We saw a lot of vehicles when that happens, for example, we used to not sell a lot of cars in December in January it was hard to compete against Santa Claus. Today December is one of the biggest months. It’s traditionally our first or second biggest month of the entire year. So a lot of vehicles are being sold so it’s kind of irrelevant to the claimant or anything else.

    William Zank  9:02 

    What are your own views on money has your own view on money changed over time, not particularly,

    Dick Garber  9:07 

    I have always kind of followed the trends and candidly, the returns in equities. Over the years, not every year but if you look at five and look at it over the course of a decade that have traditionally in my lifetime paid out at much higher returns than any fixed income, bonds, anything of the sort. So most of my portfolio 90% plus right or wrong or indifferent has been in equities, and I’m still working. I’m still earning money so I can afford a down year those sorts of things, not everybody’s in that same case but I’m probably a little more aggressive than maybe so.

    William Zank  9:46 

    Looking out to the future what has you excited for the automobile industry as you start to go look at different news headlines, people are starting to give a little bit of picture for what they believe the future might look like whether that’s electric cars or driverless cars. What are your own thoughts on that and what has you excited for the future?

    Dick Garber  10:02 

    think the car business is in so many respects, at one time it represented about 20% of the jobs in the United States of America, either from the manufacturing side on the retail side supplier side all those sorts of things. And it’s ever changing, and there are no it doesn’t appear any two days two weeks two months two years alike. And there are so many interesting options that lie ahead, whether they’re electric whether they’re autonomous, and it’s going to be really interesting to see how our economy adjusts and adapts to them in the products are just absolutely incredible how good they’ve gotten. When I started in the business, 60 or 70% of the service volume was warranty work and that was a 12,000 mile 12 month warranty. Today, warranty represents about 10 or 15% of our service volume in the warranties run 6080 100,000 miles that’s how good the cars have gotten so that’s exciting but it’s going to be really, really interesting there’s a big push today, particularly for electric I autonomous cars I think have been set back through the pandemic but electric cars, every manufacturer is all in, and they’re saying By the mid 2025 or 30% of the new cars, we’re going to be selling and going to be electric, but there’s some work to be done because candidly we don’t really see the demand if I could be honest, but we’ve got to get the mileage up, we got to get the range for an electric car to go over 300 miles in my opinion, and we’ve got to get the cost competitive because today it’s, it’s 12 or $15,000 more, and the average consumer, you know that adds another $150 a month to your payment. And that doesn’t pencil with the cost of gas, and the cost of gas with all these things floating around it’s not going to go up, it’s going to be interesting but it’s exciting. It really is exciting, and more questions than answers candidly so it’s a little bit hanging on to a roller coaster we’ll see where it goes.

    William Zank  12:00 

    Oh, that’s great. What is your involvement with conscious capitalism. And what does it mean to you and your company.

    Dick Garber  12:06 

    When gene pickle been introduced me to the concept of conscious capitalism. It just seemed like such an obvious initiative and I know it’s not, but I just believe that businesses have a responsibility to give back. I believe that business’s calling is greater than just a return on investment for the shareholders it’s got to be or the stockholders it’s got to be good for the entire entity and that includes the shareholders the community, the staff, and everyone and when you build that culture, you find out you get a better return on investment than you did otherwise, so I grew up with, being introduced to what my grandfather did in the community. My father was committed and my mother was involved with the arts in the community and is just logical that we follow suit and it’s been, I have to say, self serving. It’s been great for business. It’s been great for our staff, not a week goes by where our staff doesn’t acknowledge that they ran into someone who ran into someone who we did this we did that, and it really makes them proud of where they work and retention of staff is the key to success in business today because turnover is just devastating at any level, so it’s good for our staff, it’s a pride and people do business in a lot of people like to do business with folks that do business with them. There’s 40% of car buyers out there that are influenced by a dealership as an example, that gives back to the community so it has an influence on that. I think it’s really candidly given us a considerable competitive edge. In mid, Michigan, for example, and it’s been really good right across the board and most importantly, it helps meet the needs in the community and our community, as so many needs, and you see the evolution of what’s happened in business and big box retailing and that sort of stuff, respectfully, our local economies and communities, we’re not going to get money from the big boxes, so they’re reliant on the small businesses, and the family owned businesses, and the businesses that have roots in our community for funding, so that they can continue to provide the services to those in need in our region. Sure. And

    William Zank  14:13 

    then one point that I really want to highlight that you mentioned just for our listeners out there so one thing that you said was, being able to adopt a conscious capitalism type of culture within your company has helped reduce turnover by quite a bit, you might touch a little bit upon that.

    Dick Garber  14:25 

    Yeah, I will, Will, and we’ve got the facts to back that up our organization in mid Michigan is an example, represented by a third of the size of our organization, you know, outstate, but within mid Michigan that third, our turnover is half of what it is throughout the rest of the United States. And I think we’re pretty good, better than most car dealerships, but the brand that we’ve created in mid Michigan to our turnover is less than half of what it is out state, and our profits are higher traditionally than we experienced out state and a lot of that has to do with employee retention. So, the facts would back it up and it works, it works it’s good, again, for all the stakeholders all the shareholders, it works.

    William Zank  15:09 

    It sounds like to with this this kind of war on talent and be able to help retain those key employees just sounds like a win-win for not only employer but the employee as well.

    Dick Garber  15:18 

    no and Well one of the things that I’m probably most proud of is that we have over 20 staff members in mid Michigan that sit on almost 30 nonprofit boards, hospital boards Chamber of Commerce boards economic development boards that dick Garber is not telling them, you got to go sit on the chamber board you got to be on the boys and cross up know these folks are doing out of their own volition, they’re investing their own time and treasure to make a difference and not again because I’m asking them, because it’s the culture of our organization. And I’m really, really proud of that.

    William Zank  15:53 

    And I think kind of a last nice closing question for you, especially being within the automobile industry. I know it must be pretty hard to go pick one car out of so many but what would you say is your favorite car.

    Dick Garber  16:04 

    Well, I can’t answer that well because I don’t know who’s listening to this, but but obviously out of loyalty I mean Buick brought me to the dance so I have a real sensitive spot for that candidly I’ve been driving Chevrolet SUVs, and I’m not a car guy. I’m really a people guy. So, the cars themselves are. I won’t say they’re complete commodities to me but I’m just grateful that I have one of the few company cars of the organization that I’m grateful for, but I’m driving a Chevrolet blazer it’s fabulous my vehicle of choice is probably a Chevrolet Tahoe. Now, if I was in Rochester, New York, maybe I drive an Audi, I don’t know, but I want to make sure we’re driving something locally obviously will we sell it service.

    William Zank  16:45 

    Well thank you so thank you everyone for listening to another episode of MIT money. If you haven’t already please rate and review our podcast. Additionally, please subscribe so you don’t miss when our new episodes drop. Thank you.

    You’ve been listening to Mitten Money, hosted by William Zank, of Tri-Star Trust, subscribe to the podcast and learn more about how William and the Tri-Star Trust can guide your small business at TriStartrust.com.


    Transcribed by https://otter.ai


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