Navigating the Curves (2011 BE100s Auto Dealer of the Year)

Business is slowly picking up at Bob Ross Buick/GMC and Mercedes-Benz (No. 30 on the be auto dealers list with $49.6 million in revenues). Multicolored rows of polished vehicles shine in the springtime sun on the Buick/GMC lot–among them the Acadia, a crossover vehicle; the Buick Regal, a luxury sports sedan; and the Yukon, a 300-plus horsepower behemoth SUV that boasts seating capacity for nine adults.

Right next door, the Mercedes-Benz dealership is undergoing a complete renovation to make it sleek and modern. Overall sales for 2010 are up about 10% from the prior year and president Jenell Ross, the second generation to head the 37-year-old business, is optimistic that the company has turned the corner as the automotive industry gradually emerges from its worst downturn in history. “It’s something that Mercedes-Benz wants and it’s something that I need to do, but it just wasn’t good timing in years past,” Ross says of the improvements. “A lot of my competitors have renovated or built new facilities. So, from that standpoint, you want to make sure that you’re maintaining a great representation of the brand.”

While things are looking up for the GMC and Mercedes-Benz dealership, this business has been through more than its fair share of trials, tribulations, and heartbreaking losses. First was the 1997 passing of Jenell’s father, Robert Paul Ross Sr., the company founder for whom the dealership is named. His wife, Norma, and two children (Jenell and her brother, Robert Ross Jr.) stepped in and continued to successfully grow the business. But tragedy struck again on April 23, 2010. While the country was in the throes of the Great Recession and scores of auto dealerships were being forced to close shop and the future was uncertain at best, Norma Ross, the matriarch of the business and family, also passed away.

(Continued on next page)

Though scarred by losses and a battle against a business and economic climate so brutal that it devastated African American-owned dealerships as a whole, this Centerville, Ohio-based business has endured. Now management is looking to expand and return to the growth track and the next generation is looking forward to better days. For their perseverance and ability to weather the twists and turns that come with business ownership, Black Enterprise named Bob Ross Buick/GMC and Mercedes-Benz its 2011 Auto Dealer of the Year–the second time the dealership has been bestowed the honor.

Tragedy Strikes
Robert Ross Sr. started his dealership with an acquisition in Richmond, Indiana, in 1974 when he was chosen to participate in General Motors’ Minority Dealer Development Program. Ross subsequently acquired Davis Buick and Mercedes-Benz in Centerville and relocated the business to the city, which is in the Dayton area. After acquiring a GMC franchise, he built a business that consistently ranked among the be 100s. Ross died of heart disease on July 6, 1997.

Upon her father’s passing, Jenell, who had worked in the dealership as a customer relations manager, postponed her M.B.A. studies at Wright State University in Dayton, to attend the National Automobile Dealers Association’s Dealer Candidate Academy, a preparatory program for aspiring auto dealers. “I don’t even remember that time. I was just operating on fumes,” says Jenell, who has a bachelor’s degree in sociology from Emory University in Atlanta. “I had to jump in with both feet.”

Norma headed the business and focused on growing it through community relations. Jenell, now 41, was made vice president/dealer principal and oversaw operations while Robert Jr., now 48, became vice president/fixed operations manager, and oversaw the parts, body shop, and service centers. (He has continued in this role.) So successful was the family and management team that black enterprise named Bob Ross Automotive its Auto Dealer of the Year in 2000.

(Continued on next page)

Losing a close family member is difficult. When that person is also the face, name, and driving force of a business, the loss can be compounded by concerns about legacy as well as financial well-being of the family as a whole. Butch Spencer, general manager of the dealership, recalls those challenging times. “Jenell worked very hard to make sure that her dad’s legacy lived on. I know that may sound like a cliché, but it is serious.”

An Industry in Turmoil
By 2009, demand for U.S. automobiles hit new lows. As part of its plan to streamline operations and reduce costs in the face of weak demand for its products, GM announced in May of that year that it planned to shutter 1,100 dealerships. As franchisors, automakers reserve the right to terminate agreements, and each dealership was notified by mail whether or not they’d be stripped of their business. For Jenell, it would mean the end of her father’s legacy. “I was on pins and needles because nobody felt that they were immune to possibly being on the list,” she recalls. “There were a lot of rumors flying, so one minute you might sit there and say, ‘Yes we’re OK,’ then the next minute you’re like, ‘OK, maybe we’re not OK.’”

Spencer recalls waiting for the letter to arrive. The mood at the dealership was somber to say the least. Employees who have been with the company for decades could have lost their jobs at any moment. “Talk about turning you inside out,” he says. “My God, it’s a wonder I didn’t end up with ulcers. I can’t imagine how Jenell felt.”

When the letter arrived stating that GM would allow the dealership to stay in business, “I immediately brought everyone together. Everyone erupted,” recalls Jenell. The jubilation would soon be tempered by the fact that the dealership was far from out of the woods.

The dealership had to be restructured to handle the abysmal business climate. Painful decisions had to be made, including a 20% reduction in workforce. “We asked others to step up and take on additional duties basically for nothing,” says Spencer. Ross also renegotiated contracts with its vendors–providers of lawn care, window washing, janitorial service, and IT services–to cut costs. “I can tell you in 2009 we decreased our expenses by more than $1 million, which probably would equate to 20% to 25%.”

(Continued on next page)

Inventory was reduced as well since cars are purchased on credit. Whereas the dealership once carried about 300 new GM and Mercedes-Benz vehicles, it reduced that number to fewer than 200. “So the key was to not only take every opportunity we have as far as selling a car or repairing a car and generating that revenue, but we really had to take a good hard look at our expense structure,” says Spencer.

A Time of Loss
By 2010, Ross was running lean and mean. Cost reductions kept the company going as GM, now out of bankruptcy protection, sought to regain its position in the marketplace. But the dealership suffered another blow when Norma Ross, a former teacher in the Dayton Public School District who built the business alongside her husband, succumbed to breast cancer at the age of 75. An already struggling business was forced to contend with the loss of the woman who forged strong ties to the community while the industry that served as their livelihood was in turmoil.

Community members flooded the family with condolences. Norma had been extremely involved in several nonprofit organizations, including the Dayton Philharmonic Orchestra, where she served on the board of trustees. There, she and her

fellow Community Advisory Committee members initiated a series where musicians from the orchestra visited three Dayton-based African American churches to perform classical works written by black composers. “Her biggest asset was to bring the orchestra to the underserved community, and she said in her eyes the committee was for black Dayton residents,” says Mya Cooper, community liaison coordinator for the Dayton Philharmonic Orchestra.

Norma continued to work with the organization even while battling cancer. “When she was sick I didn’t even realize,” says Cooper. “For a while no one knew, and she was still on the move all the time.”

(Continued on next page)

When much of your customer base is in the community, it’s important to be active and visible within that community in order to attract future business. With Norma’s passing, Jenell stepped into her mother’s role. “It’s almost a side job of trying to really make sure that I manage her things that she’s done and things that she started, so that they don’t get lost or don’t continue,” says Jenell. “But at the same time, I’ve got to run a business.”

Selling Cars in the 21st Century
And that business is selling cars, which requires a different strategy than in years past. With access to a vehicle’s specifications, pricing, and features at consumers’ fingertips, Ross embraces technology to help sell vehicles. Although it has a presence on Twitter and Facebook, and a website (www.bobrossauto.com), the dealership still relies on old-fashioned relationship building. “Years ago there was always the high-pressure tactics and people were pretty much in the dark about how cars were priced, and rebates, and so forth and so on. But with the Internet, customers today are very knowledgeable of pricing and rebates,” says Spencer. “We have to provide that level of service and if we don’t, we aren’t going to be here. There are too many choices for them.”

Now that Jenell is handling her mother’s job, she has made some changes. “We took a little bit of a different direction last year and into this year with taking more vehicles to events for exposure of product, for maybe a silent auction for a weekend use of a vehicle,” she says. “There are a lot of dealers in the Dayton area, so you have to be creative and try to make sure that we’re not resting on our laurels of what we have been involved in.” The Ross family and other managers are also involved with community organizations.

Jenell looks to overcome the tragedies of the past–both professional and personal–and bring the company back on the growth track. Eric E. Peterson, U.S. Vice President-Diversity for GM, and a longtime family friend, is bullish on the future success

(Continued on next page)

of Ross Automotive. “The will to be successful is very strong in that family. Jenell is a student of the business and I know she’s learned a lot from her parents and now she’s putting it to good use,” he says. “Bob was a heck of a dealer who learned the business and was one of the first minority dealers for General Motors. And he taught his kids the business well.”

Standard & Poor’s, a leading financial services firm, is positive on the outlook for automakers, projecting rising year-over-year demand in the U.S. due to higher employment, increased consumer confidence, pent-up consumer and business demand, and improving access to credit for consumers. The research firm also says luxury vehicle sales, which were also restrained by economic weakness, should show improvement as wealthy consumers become more confident.

But automakers continue to lose minority-owned dealerships. In the last 12 years, the number of General Motors African American dealers has dwindled from 89 to 30. Marjorie Staten, president of the General Motors Minority Dealers Association, says: “GM eliminated dealers based on performance, brand eliminations, and other factors. This left a smaller number of African American dealers to continue their operations.” And now? “We’re seeing programs that I think were very successful before the downturn for GM, like lease pull-ahead programs or 0% financing, and hopefully that will, over a period of time, have a greater impact in sales.”

Another positive effect on to the top line will come by way of a Fiat dealership opening by the end of the year. In April, the Ross dealership was awarded a Fiat franchise for the Dayton area and plans are under way for the construction of a showroom at the site of the company’s used car location. “We felt this was a good opportunity to be a part of a brand that’s returning to the U.S. market,” Jenell says.

The prospects for improvement and growth are music to Jenell’s ears. “The Detroit Auto Show had a different feel this year, which was much more upbeat,” she says. “You know, we needed that and we needed a good start to the year just to get the confidence level back.”