89 and Driving Change: Jack Fitzgerald's Push for Employee Ownership89 and Driving Change: Jack Fitzgerald's Push for Employee Ownership

Jack Fitzgerald is a mega-dealer now, but he well remembers life as an employee, in his case a door-to-door fire alarm salesperson and then a car salesperson.

Now, at age 89, he's working to turn his 12-store Fitzgerald Auto Malls, which represent more than 30 auto franchises in Maryland, Pennsylvania and Florida, into an employee-owned dealership group through an employee stock ownership plan.

Many of those employed at his auto malls are long-time employees. Thirty-plus year Fitzgerald veteran Rob Smith, who runs day-to-day operations at the Fitzgerald headquarters in Rockville, MD, signed on at age 19. Harold Redden, who heads digital and internet operations, began his 30-plus year career at Fitzgerald when he hired on as a 16-year-old high schooler.

While at work one recent Saturday morning, Fitzgerald talked with WardsAuto about his life as a dealer. Here's an edited version of the conversation.

WardsAuto: How did you become a dealer?

Fitzgerald: I became a Ford salesman in 1956 in the Washington, DC, area. (He was born in Washington.) I thought I was pretty hot. In those days, the average car salesman sold 300 cars a year, but I sold over 500.

It wasn't easy becoming a dealer, but in 1966, I got a small Dodge storefront in downtown Bethesda, MD. I got a second store in 1970 and a third in 1971.

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WardsAuto: Why do you think you became a successful dealer?

Fitzgerald: I'm not anything special. I work hard. Everyone who is successful works hard. And I hire people who agree with my philosophy.

WardsAuto: Which is what?

Fitzgerald: I'm a (single-price) dealer. You put the selling price on the car windshield. It's a fair price. There are no negotiations.  

WardsAuto: When did you start doing that, and why?

Fitzgerald: Since 1979. Chrysler was in trouble back then. Interest rates reached 21.5%. Chrysler was heavy into leasing. You can imagine what happened when interest rates went up and up. They had 1-year leases on cars. You couldnt give a car away.

WardsAuto: So that was the impetus for the one-pricing strategy?

Fitzgerald: We weren't selling anything at our Chrysler stores. Thank God I had a Ford store that was making money.

But Chrysler stores were dead in the water. So, Chrysler came up with a tent-sale idea. You posted the selling price. You sold it for that.

I watched customers at the tent sales. They really reacted positively to that. Cars that hadn't been moving suddenly were. It was like old times, normal times.

But you had to know what you were doing. Detractors said you couldn't sell cars that way, but we did.

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WardsAuto: You were ahead of your time.

Fitzgerald: Well, it had been done before. Initially, I didn't think it would work because I was taught you set the price at a level where you could cut it during negotiations. That was chapter and verse. But those tent sales were an eye-opener.

WardsAuto: It's value pricing. You can put any price on a window, but there must be a sweet spot. It can't be too low or too high.

Fitzgerald: Some dealers price high. They dont sell as many cars that way, but they make more money on what they do sell.

They will sell the same model for a higher price to some customers and for less money to others. That's not fair. Why should one person pay more so others can pay less?

Occasionally, I get notes from people who tell me what wonderful people I have working for me. This is largely because we don't get into price haggling.

WardsAuto: What's your advice to someone starting in the business?

Fitzgerald: There's nothing magical about it. Try something you enjoy doing. That's the first thing. Whatever you get into, focus.

Keep up to speed on what's going on in the business. Don't be the last one to convert to something. You do not have to be first, but if you see someone having success with something, take note.

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There's nothing new under the sun. But there's a lot of good stuff under it.

WardsAuto: What's the future hold for the dealership world?

Fitzgerald: I'm not a futurist. But I still think dealerships are good investments.

WardsAuto: Do you think the franchised dealership model is here to stay, or will it morph into something else, like direct sales from the factory, like Tesla?

Fitzgerald: Tesla hasn't really been tested yet. They came on the scene when nobody else was fully in the electric-car business.

Factory-direct car sales won't be a long-term success story.

Cars are emotional. Shoppers want to touch and feel them, get inside of them, test drive them.

That gives consumers a sense of whether they want to buy a particular model. There's a place where people can do all that. It's called a dealership.