Subaru
& Sagot: Working Together to Get the Best Results
Focus, 09/02/1987, 1888 words.
Costs
Drop for Cellular Car Phones
Focus, 05/20/1987, 2964 words.
Air
Bags: Hot Air That Saves Lives
Focus, 05/20/1987, 1909 words
Automall:
Good for Dealers, Customers and the City
Focus, 10/15/1986, 1398 words.
The Future of Mortgage
Rates – Who has the definitive answer?
Focus, 10/15/1986
Import or Domestic? Most
people prefer an import over a domestic brand – even if it’s the
same.
Focus, 10/15/1986
Selling Cars: The Times
They Are a ‘Changin’
Focus, 10/15/1986
Large Inventory Spurs
Interest Rate Wars
Focus, 10/15/1986
Subaru &
Sagot: Working Together to Get the Best Results
By Thomas Derr
09/02/1987
Focus
Pg. 34
Cherry Hill, NJ, US --
WHEN Subaru of America moved its New Jersey
headquarters from a low-profile brick building in Pennsauken to a sparkling new
office complex in Cherry Hill, there was much more involved than the mere
erection of a new building.
Subaru's relocation effort utilized a
revolutionary concept in office furnishing that may affect the way office
building construction is undertaken for many years to come.
The concept was simple -- to involve the office
furniture dealer in the construction process from the very first day. According
to Frank Aspell, Subaru's Assistant Vice President/Corporate Planning, Subaru
had a definite reason for proceeding in such a direction. Aspell was
responsible for managing the headquarters project with a five-person committee
that controlled all phases of the construction process.
HIRING A DEALER: "Most people commission a
designer and an architect," says Aspell. "They never think to hire a
dealer to work with them directly. They think of the dealer as the one who
sells the product, installs it, and that's all he's responsible for. We felt
having the dealer involved with us from the beginning, on a contract basis, was
crucial to eliminating a lot of problems along the way."
According to Aspell, the choice for Subaru as to
who would be the dealer was easy -- Robert Sagot, Inc., of Cherry Hill, N.J.
After all, Subaru had been buying its furniture through Glen Schapiro, co-owner
of Sagot, since 1978. And since that time, Sagot had demonstrated competence
and dependability on many separate occasions, Aspell added.
Having that familiarity with the individual
contact and the company with which one is working offers a number of early-on
advantages, Aspell notes. For one thing, it eliminates many of the
uncertainties often associated with the bidding process. Even more important is
the fact that it enables a business to establish a mutually beneficial
relationship with a furniture dealer with whom the business can feel completely
comfortable -- a dealer who can come through with helpful advice and/or service
when it's needed most. That kind of trust and dealer confidence was important
to Subaru, Aspell says.
For Robert Sagot, Inc., that dealer trust came
into play a good year before the actual groundbreaking. The better the dealer's
understanding of Subaru's day-to-day business operation, the better Sagot could
provide practical, effective furniture solutions, officials at Subaru reasoned.
BECAME A PARTNERSHIP: "Ordinarily a dealer
doesn't have to understand your business," Aspell says. "But with a
job of this size, it became more important, because when you begin to make
changes along the way, that dealer now becomes more understanding. Essentially
it became a partnership, in the sense that we now had a relationship where the
dealer actually felt that our business was his business."
It was a partnership that worked through many
diverse design challenges. Architects of record for the new Subaru building
were the Klett Organization, while interior design services were provided by
the Klett Organization and William Sklaroff Associates. Sagot's mission
involved providing furniture for the entire 130,000 square foot building,
including the reception area, lobby area, conference rooms, office systems,
executive offices, an auditorium, cafeteria and a lounge area. According to
Aspell the "uniquely appointed architecture" of the foot building
offered a number of limitations on what a furniture dealer could do, even with
the most flexible of furniture combinations.
For example, every wall inside the building is
factory made, standing about five feet high, with glass rising from the top of
the wall to the ceiling. Because the building itself is virtually wrapped in
glass, the walls had to connect with the architecture of the building at a
variety of points, while avoiding the appearance of standard office partitions
when viewed from outside the building.
As a result, the coordination of the glass and
walls became especially important, as did the search for a manufacturer who
could be depended upon to meet both specific design criteria and client
requirements.
PLANNING FOR GROWTH: For example, the design
scheme called for the walls to be floor to ceiling to insure privacy. But at
the same time, they would not be permanent. Easy disassembly and assembly of
the system also were necessary to satisfy concerns about company growth. The
solution -- the panels were laid on top of the wall-to- wall carpeting and
secured at the ceiling for strength. At the same time, Klett Organization
designers wanted to be able to guarantee the noise reduction properties of the
panels as well as their wearability and durability. To further complicate the
matter, Subaru requested Sagot to keep back-up systems in its warehouse so that
quick, easy future movements would be possible.
In addition, the design plan called for
no-free-standing furniture. Instead all of it would be attached to the wall. In
view of this, it was felt that the manufacturer chosen not only had to have
reputation for strength of product, but also for ease of installation and
future modification as well. In the end, architect, designer and dealer agreed
to rely on Sunar-Hauserman, a Cleveland-based manufacturer, to meet Subaru's
furniture requirements. One of the key reasons for Sunar-Hauserman's selection
was its ability to custom build componentry to fulfill Subaru's needs, Aspell
says. Most manufacturers prefer to offer only its standard line of products.
"Understanding which manufacturer was going
to give us the best office system to help the company achieve its objectives
was the responsibility of Glen Schapiro," Aspell says. "He gave us
the best input because of his experience in making those kinds of
installations, and because of his ability to anticipate our need for future
changes." Aspell estimates approximately $3 million worth of
Sunar-hauserman office systems went into Subaru's 500 work stations, conference
rooms, managers' offices, and informal employee meeting areas. An additional $1
million went into executive suites, a cafeteria, seating and reception areas.
CONTRACT AGREEMENT: In hindsight, there are a
number of noteworthy advantages to having the furniture dealer involved from
right at the start, Aspell declares.
"Bringing Sagot in early helped us meet the
goal of providing a pleasant working environment for our employees," he
notes. "It also gave us work space that would maximize our productivity
and thereby help us continue to operate profitability.
At the same time, the contract arrangement --
which utilized the furniture dealer at its highest and best use -- also enabled
Subaru to get maximum use out of its total design team.
Instrumental to the successful Sagot-Subaru
relationship was the Sagot's agreement in advance to work on a contract basis
Aspell says. “When you deal with a dealer by contract, the client can better
define the dealer's function and there is a clearer understanding as to just
what services the dealer is going to supply,” he notes. “In addition, there
should be no question as to who will pay for what."
A mutual contract also takes the focus off
commissions, and allows the dealer to concentrate more fully on helping the
client solve his or her own problems. It was that sort of commitment which
Aspell says Sagot gave to Subaru. Another advantage of the Sagot-Subaru
agreement to work under contract was that with the manufacturer's concern over
dealer profitability out of the way, Subaru was able to deal directly with the
factory, and thereby secure the best price possible.
The payment arrangements that were set up also
reflects this spirit of cooperation. According to Aspell, monthly payments to
Sagot were made with 20 percent held until completion of the project to insure
full participation until the end. Payment for the systems, meanwhile, was made
directly to the factory due to the size and arrangement of the project.
PRACTICAL PROBLEMS: There were other important
advantages, too Aspell adds. Assurance of quality furniture selection was one.
Many designers have a good eye for shape, color and aesthetic value, he says,
as well as an understanding of what one hopes to accomplish through design and
positioning in reaching a firm's business objectives. Sagot offered all of that
as well as a practical understanding of the installation process, Aspell says.
According to Aspell, that factor was vital to
the success of the project. He believes a good dealer understands the practical
problems involved with installation and is aware that even though a piece may
be aesthetically pleasing, it may not be a quality piece of furniture. That was
another important role Sagot filled, Aspell says -- working with both the
designer and the architect from the beginning to make sure every piece of
furniture was both functional and well-constructed.
Service after the sale was a major consideration
as well. Key considerations for Aspell included working with someone he knew,
whose work and reputation he was familiar with, and someone with whom he could
depend on long after installation for ongoing service and solutions.
"If we needed a widget, Glen knew what that
widget was. He knew where to get it, and he knew its importance," Aspell
comments. "Exceptional service was a critical element in our dealer
decision, and we knew we could get that kind of service from Sagot."
Still, the effort wasn't without some strains.
Due to the size of the project, Sagot was obliged to add internal support staff
as well as a project coordinator to assist Schapiro in carrying out various
details, and in keeping up on ordering, production schedules, delivery
schedules and warehousing.
"The dealer's function falls into so many
critical areas," Schapiro notes. "It encompasses preparing and
shipping the purchase order, the receiving function, quality control,
installation, solving field problems as they come up, and helping the client in
determining if what was received and what was installed is actually what is
being billed. In addition, the dealer serves as an advisor to work out any
number of practical problems that come up along the way."
WHO'S IN CHARGE? As workable and rewarding as
the Sagot-Subaru relationship has been, however, Schapiro is quick to make one
very important point. For all this work effectively, only a limited number of
people from the organization or corporation should be making decisions, he
says. Furthermore, if decisions are made by committee, it's still best if one
person has final authority. It is that one person the dealer prefers to work
with, Schapiro says -- to proceed otherwise is to invite chaos.
According to Schapiro, the Subaru project
exemplifies just how such a system should work. A committee of five was
involved in the headquarters project: Harvey Lamm, CEO; Tom Gibson,
President/COO; Marvin Riesenbach, Executive Vice President/CFO; Ken Neyerlin,
Manager of Facilities Planning; and Aspell. And while major decisions were made
at committee level, decisions regarding internal changes, movement and
installation were made by Aspell and his department. This streamlined
communications and allowed a major corporate furnishing process to be handled
on a close, clearly defined, one-on-one basis, Schapiro explains.
But just because it worked for Subaru, does that
mean it would work for other businesses and corporations? Aspell thinks so.
"For any major furnishing effort I would
highly recommend it," says Aspell. "From the standpoint of the
interior, the project was much easier to manage. Also, the documentation was a
lot stronger. We know now what's in inventory, and we know now what's in the
building. In my opinion it's an excellent way to create a productive
relationship -- when communication is really critical."
Costs
Drop for Cellular Car Phones
By Thomas Derr
05/20/1987
Focus
Pg. 48
Philadelphia, PA, US -- When cellular mobile car
phones were first introduced to the American market, the customer base
generally consisted of two types of people. On the one hand were the affluent
business executives who found the phones to be a practical and convenient means
of improving their business productivity. On the other hand were the affluent
but less-practically oriented users who saw the phones as a new, exciting,
expensive toy.
Now, as the price of car phones continues to
drop, more and more individuals from varying walks of life are beginning to use
them. As William Oplet, director of marketing for Metrophone notes, the price
of cellular units has plummeted from a level of around $2,000 a few years ago
to a point where in April, 1987, a customer could buy one type of Metrophone
unit for as low as $695.
Brian Wood, director of corporate communications
for Bell Atlantic Mobile Systems, believes the popularity of mobile phones also
is fueled in part by the availability of different financing mechanisms which
were not available just a few months ago.
"Back when cellular mobile systems became
commercial in Chicago, in the fall of 1983, the average retail price for sets
was in the neighborhood of two or three thousand dollars -- and there were no
alternatives in terms of installments or rental purchase plans. It was only
outright sale," says Harris.
RENTAL PLANS: During the last two years,
however, carriers have instituted a variety of installment and rental plans.
Bell Atlantic customers, for example, generally can get car phones in a price ranging
from as low as $19.95 per month to as high as $49.95 a month, with some of the
newer, more advanced hand-held portable sets going for even higher.
Furthermore, all of Bell Atlantic's purchase plans involve installment
purchases, requiring down payments ranging from $100 to as high as $300. The
customer takes ownership upon down payment and monthly payments usually last 36
months.
Most of the Bell Atlantic equipment costs in the
neighborhood of $1,195, $1,395, $1,595, for an outright purchase, although some
of the small Mitsubishi or Motorola portables retail for around $2,500.
However, many of the Bell Atlantic representatives will mark down the price
even more for outright purchases if they have a particular sale going on, adds
Wood.
As a result, of such "special deals,"
cellular service has seen an increased demand from a number of professional
segments who a year and a half ago did not consider a cellular mobile phone
system to be a key ingredient in business life.
"Metrophone has found itself satisfying an
increasing number of people on road who have a need both to deal with clients
and to stay in touch with the home offices," Oplet explains. "As
business has pushed more sales people out to make more sales calls, the car
phone has become much more than an accessory. Today it's a real
necessity."
According to Oplet, growth in the cellular
market so far has been fueled largely by decisions made by individual business
executives or sales people, even though many of them have wound up having their
expenses reimbursed by their business.
"We are starting to see the market for
corporate decision-making open up for cellular," says Oplet. "It's a
new technology, and like anything else, it takes time for Corporate America to
recognize that not only is it a valuable tool, but also to assess its benefits
versus its costs."
But it's not only Corporate America that is
taking advantage of the new cellular technology. According to Oplet, the fact
that a car phone can help an executive keep in contact with his or her home
office, clients and suppliers -- while on the road -- helps to improve the
efficiency with which a small business can grow. For that reason many small
business owners are looking into the cellular market.
TRADESMEN-TYPES: "What I find interesting
is that cellular phones are becoming popular among tradesmen-type people,
plumbers and electricians -- people that normally can be difficult to reach
directly during the day," says Steve Rade, president of Advanced Cellular
Systems, Huntingdon Valley. "Now you can reach them right in the car, and
they can give quicker service. I think that's a very practical use. So it is
definitely filtering down to blue collar-type users."
Dan Petrecca, general manager of Nobell
Telecommunications, Inc., King of Prussia, also sees the trend of consumer use
filtering from the "super-important, super-rich" first round of buyer
down to "the guy that’s on the road."
"No what you're finding is the blue collar
worker -- the plumbers, carpenters, electricians, and any one-man show who
doesn't need an office," Petrecca says. He notes that one of his clients,
the owner of a limousine service, recently closed down his office, got rid of
his receptionist, and now simply advertises a phone number which can be forwarded,
when necessary, to wherever he happens to be with his portable cellular unit.
"Now he sits at the swimming pool,"
Petrecca says. "His business has increased, and he works less. And we've
done that for towing services, plumbers, and other tradesmen."
According to Oplet, cellular units traditionally
have been strong among the construction trade segment of American industry.
Oplet says a "classic case" occurs when construction workers who are
away from the headquarters location, but still need to stay in touch with the
home office, suppliers, and other important entities that might be involved in
a project.
"At lots of construction sites, the last
thing to go in is the phone line," says Oplet. "So we're seeing an
increasingly strong demand for service in that industry segment."
PHYSICIANS: According to many cellular phone
providers, physicians also are becoming an especially important customer base.
With the changing health care environment, it is increasingly common for a
physician to be affiliated, with several different hospital locations. That
reality increases the demand on such doctors to stay in touch with patients at
various sources. That's why a number of area physicians, in fact, have begun to
use cellular units either alone or in combination with conventional pagers.
One physician who has opted for a cellular unit
is Dr. Jerome Horowitz, a Philadelphia pediatrician. Dr. Horowitz notes that
having the phone in the car eliminates the need to pull over and find a pay
phone and correct change -- problems that were inherent with the conventional
beeper.
"A doctor is always responsible for his
patient, whether he is at home or in his car or wherever," Dr. Horowitz
says. "The cellular unit puts you in touch with the hospital whenever the
need arises."
That advantage can be particularly important in
cases of newborn emergencies, when problems cannot be anticipated and the need
to be in contact with the hospital is essential, he adds. Such examples
underlie what John Czapko, regional sales manager for Bell Atlantic Mobile
Systems, says is a growing trend among professionals and business people who
are coming to truly believe in "the value of a car phone as a business
communications tool, much like the phone on their desk."
WORTH EVERY CENT: "People are now telling
us, after they've had them for a while, that they don't know how they lived
without them," says Czapko. Thanks to the car phone, all the drive time,
or "windshield time," is now productive selling time, and/or
communications time. This helps justify the cost of the cellular phone for many
business people, he adds.
Czapko says that he has been involved in a
number of business focus groups where cellular users have approached him and
said: "I don't care if you charge me a dollar a minute. It's still worth
every cent of it."
"That's the consensus. Because if you take
a look at the value of somebody's time -- what they are paying an individual,
plus what their value is to the company, and the amount of business they are
bringing in -- it's really very inexpensive," he says.
Depending on an individual's calling habits, the
car phone even can be less expensive than credit card calls, Czapko continues.
Thanks to the Bell Atlantic supersystem, a cellular mobile phone user can call
anywhere within the region's mile area without incurring a long distance toll
charge. The local Bell Atlantic coverage area includes Philadelphia, Allentown,
Atlantic City, Wilmington and
Reading.
"If you're in Cherry Hill and you use a
regular phone to call Allentown, there will be a charge for that on your credit
card," Czapko points out. "On my Bell Atlantic Mobile Systems phone,
there will be no long distance added toll charge."
Of course, individual calling patterns have a
significant impact on overall savings. But even so, the time savings involved,
and the additional business and contacts that can be made via the mobile units
often serves to justify the cost of cellular phones, he adds.
The first city to use cellular phones to any
great extent was Chicago, which was picked as a test city in 1978 and operated
an experimental system for five years with approximately 1,000 subscribers.
Five years later, in 1983, the FCC gave its go ahead to implement cellular
systems in the top 30 population centers in the United States. Washington, D.C.
was the second city to get cellular service, in January 1984; Los Angeles was
third in May, 1984 (just in time for the Summer Olympics); followed by
Philadelphia in July, 1984.
TWO SUPPLIERS: The FCC has mandated that there
can only be two suppliers of cellular services in any one city -- one wireline
service, or a "telephone company," and one nonwireline service,
usually a group of independent investors who combine their resources to set up
and operate a system. In Philadelphia, the wireline service is Bell Atlantic
Mobile Systems, and the nonwireline service is provided by Metrophone.
According to Advanced Cellular Systems' Steve
Rade, the FCC set-up both promotes competition between the two suppliers, while
at the same time limits competition so that there is not a large number of
independent entities trying to duplicate the same services.
"Of course there are differences between
the wireline and the nonwireline technology, but the main difference comes down
to American capitalism," says Rade. "Who is going to promote? Who is
going to spend money on customers? Who will come up with more unusual ways to
use their phones? Who will offer more accessory-type services to your phone,
such as accessory machine-type services, free calls, and other features to make
the phone more valuable to the user?"
Metrophone is "definitely the leader in
that," he claims.
But it wasn't always that way. In fact, Bell
Atlantic enjoyed a virtual monopoly in the Philadelphia cellular phone market from
July 6, 1984, until February 8, 1986, when Metrophone finally completed the FCC
approval process and came on line through its own transmission towers. Thanks
to an aggressive, successful marketing and promotion program, Metrophone
managed to close that gap within a year and a half and now possesses the bulk
of the subscribers in the
Philadelphia market, Rade says.
However, according to Bell Atlantic's Brian
Wood: "Right now Bell Atlantic is probably the biggest carrier in the
MidAtlantic region." That's just the start of the battle.
NEW PROGRAMS: As Rade notes, the greatest
competition seems to be in the area of services and accessories provided, and
each carrier seems to be coming out with new, innovative programs every day.
According to Metrophone's Oplet, his company is
the first company on the East Coast "if not in the country" to
introduce direct access to Shadow Traffic reports. When a Metrophone client
dials "*22" he or she receives the latest traffic update available.
Metrophone also offers access to Keystone AAA emergency services, and a local
voice mail service that will enable a user to have his or her messages taken,
stored, and/or forwarded on to wherever the user may be located. Metrophone
also has introduced a promotion aimed at increasing long distance awareness and
usage among its customer base.
"If customers make a long distance call
using AT&T, we reward them with a free cellular minute of off-peak air
time," Oplet says. Although financial results are kept confidential, Oplet
says the promotion was an "overwhelming success” and increased long
distance usage "considerably more than 100 percent."
In addition, Metrophone agent Steve Rade notes
that plans are now in the works to move into a mobile WATS line service, which
would allow firms and corporations with multiple users to combine that usage to
produce a lower rate.
VOICE ACTIVATED: Aside from the Bell Atlantic
supersystem, which can often eliminate the need to incur a long distance toll
charge, the company has a number of other innovations underway, says John
Czapko.
"Some of the exciting things that are
happening are voice actuated systems, where you can activate it by saying 'Call
X.' If I put that in and say 'Call X," only I can activate the phone call.
If someone else tried to do that, it will not dial it up. It has to be the
original voice that was put in there," explains Czapko.
Bell Atlantic also has some systems under
development that will enable users to pull their cars over to the side and use
a terminal to transmit and receive data on a computer terminal. Facsimile
machines also are being incorporated.
"For example, if someone is selling
pharmaceuticals, there will be a lot of detail on the order -- it might be a
two or three page order with hundreds of entries," says Czapko. "By
using the facsimile machine, they can just go to the front seat of the car and
fax it back to the corporate office, input the information and possibly have
that order delivered the same day."
SCRAMBLE PHONES: Thanks to digital technology,
Bell Atlantic also can offer encrypting services that allow individuals
involved in confidential discussions to scramble their conversations so that no
outside parties can pick up on them. Federal government employees and police
departments in particular seem to be interested in that service, says Czapko.
Bell Atlantic also has begun to aggressively
market its direct sales capabilities, which in the Philadelphia area currently
are based in Trevose and Mt. Laurel, N.J.
"In September, 1986, we started opening up
a chain of Bell Atlantic mobile phone centers," says Brian Wood. "The
concept there is that the customer has one-stop shopping. The sales staff is
there. They can look at the product samples, they can get the phone activated
and installed and drive out with the phone activated. We're also building
another center in King of Prussia, and we expect to have more in the area
during the next year or two."
Bell Atlantic also offers features such as
three-way calling, free detailed billing so customers can more easily keep
track of expenses, and a number of other services. Customers also enjoy free
local access to the WIP radio talk-show host, and in the near future will be
able to participate in a free "hero network" that will enable them to
call WCAU radio to report traffic accidents, fires, and other emergencies. Each
month participants will have a chance to win prizes.
FUTURE: What does the future portend? From a
technology standpoint, both Metrophone and Bell Atlantic spokespersons predict
increased usage of transportable units, which will enable customers to take the
phones out of their cars, carry them along wherever they go, and even use the
equipment in a second car.
In addition, there will be more retail offerings
through retail channels, especially as the number of customers increases who
use cellular sets less as a necessary business item and more as a general
business tool, safety tool or convenience item.
"It's not unlike the calculator or the VCR
situation," says Wood. "There are some studies that say when the
price gets in the neighborhood of five hundred dollars, four hundred dollars
for a set, then the sales will skyrocket. But they won't skyrocket unless the
retail channels and distribution are set up so the customers can get their
hands on them easily, so that there are more places to get them installed.
Carriers have to be able to handle that increased demand."
RURAL AMERICA: Eventually, cellular service will
even extend to rural areas where currently it is not economically feasible to
erect the necessary transmitting towers and switching stations, says Oplet.
Cellular communications is very much a
population sensitive industry. The more customers that are on a fixed
investment, the greater economies of scale a carrier will enjoy and the higher
the profits, Oplet explains. That's why it will be a long time before someone
can justify a car phone in rural areas such as Montana.
"Eventually, however, I think what may
happen is you'll see a transmitting tower located in a single remote rural
location, linked via satellite to major population hub -- so in effect you will
be able to expand the system to rural American and interconnect major
metropolitan areas via satellites, which offer great broadcast capabilities."
NEED ECONOMIES OF SCALE: That kind of technology
already is being used by some data transmission systems, where small companies
use an array of small aperture dishes and little remote regional base centers
to transmit data back to central locations. Oplet says it is realistic to think
that is also in the cards for the cellular phone industry. But it depends on
economies of scale, he adds.
"We're willing to provide whatever
convenience our growing investor base desires in order to make their life
better and easier while they're in the car," Oplet says. "You'll see
a whole wide array of services -- principally improving the basic product --
but all of which make life easier, more convenient, and more productive for
people who have car phones."
Air Bags: Hot Air That Saves
Lives
By Thomas Derr
05/20/1987
Focus
Pg. 40
Philadelphia, PA, US --
After four months of intense political
campaigning, most people probably have had more than their share of hot air for
a while. Even so, there is still one air-related phenomenon which many will
want to make special note of -- in fact, their lives may depend on it.
That phenomenon is the automobile airbag, which
until this year was largely talked about but not seen. Beginning in 1987,
however, the use of this controversial safety tool seems destined to become an
increasingly common feature for both domestic and import car makers.
According to L. W. Camp, executive engineer for
regulation and planning for Ford Motor Co., who spoke at a recent "Ford
Safety Day" event at Pacifico Ford in South Philadelphia, between 500,000
and one million supplemental driver-side airbags by Ford in its 1990 model
cars.
COST: Currently Ford offers the airbag as an option
on its 1987 model Tempo LX and Tempo GL four-door sedans. Brian McCulley, car
merchandising manager for the Philadelphia district of the Ford Motor Co.,
notes that the cost of the airbag option amounts to $231 for the Tempo LX and
$295 for the Tempo GL series.
However, that cost represents approximately $520
discount from the normal cost, he adds.
"The actual price is higher, but we have a
discount because Ford is concerned with safety, and we recognize that the
higher prices of the option may preclude some people from purchasing the
vehicle," McCulley says. "We made the price reduction on the vehicle
so the safety option is more in-line price-wise and more affordable to a lot of
people."
As part of its campaign to promote acceptance
among car buyers, Ford also is offering one year of free membership in the Ford
Auto Club, along with its ESP Plus extended warranty.
Beginning in 1989, Ford also expects to make
passenger-side airbags available to car buyers. These plans will depend on the
results of ongoing engineering tests, and on the availability of an adequate
supply of airbags.
STUDY: There is an easy explanation for this
growing popularity of airbags -- they save lives -- an observation which is
supported through studies cited by the Washington-based Insurance Institute for
Highway Safety (IIHS).
According to the IIHS, more than half of all
deaths and serious injuries involve frontal and front-angle crashes, and it is
in these types of crashes that airbags have proven to be most effective. When a
vehicle crashes, the airbag automatically inflates to keep occupants from
slamming into steering wheels, instrument panels, windshields and windshield
frames.
According to IIHS, occupants who depend on a
combination of airbags and seatbelts enjoy the best protection available in any
kind of crash. Particularly in high speed crashes, the airbag/seat belt
combination offers far better protection than a simple lap/shoulder belt, as
well as crash protection that is "vastly superior" to no restraint at
all.
CONTROVERSY: Nevertheless, there is still a good
deal of controversy surrounding airbags.
Roy D. Hanshaw, vice president of Keystone
Automobile Club, and the club's director of public affairs and traffic safety,
notes that the airbag can be a plus if it is used to supplement, but not
replace, the seatbelt.
"The airbag can help, but it is only good
for certain kinds of collisions, such as the 45-degree frontal collision,"
he says. "The problem with airbags is that you still need the
seatbelt."
Hanshaw also points out that if the airbag
inflates at the wrong time, it could damage the car's steering column, which
then often has to be replaced at the owner's expense.
But accidental deployment rarely, if ever,
occurs, according to Sandy Sadtler, a salesman at Carson-Pettit, a Mercedes
dealer in Devon. Mercedes has featured airbags as standard equipment in its
cars since 1986.
"We sell 30 cars a month, and I don't know
of anyone who has had an airbag deploy accidentally," Sadtler says.
"It only goes off on a 19 mile per hour or greater frontal collision. That
has to be a straight-on frontal collision, no side or corner crashes. And 19
miles per hour is a pretty substantial collision."
The IIHS also notes that the typical
"fender bender" is unlikely to cause airbag inflation. The mechanics
of the operation are relatively simple. In a moderate or serious front-end or
front angle crash, crash sensors trigger an inflator. Nitrogen gas then fills
the fabric pillows to cushion front-seat occupants.
SECOND STAGE: According to IIHS, the violence of
virtually all crashes lasts one-eighth of a second or less. Peak inflation of
an airbag occurs in less than one-twenty-fifth of a second -- faster than the
blink of an eye.
The airbag system works during the second-stage
of a collision. In a front-end crash, the car is stopped suddenly by another
vehicle or a fixed object, such as a tree or telephone pole. But unrestrained
occupants continue moving forward at the same speed the car was traveling
before it crashed. This second, or "human" collision -- the one in
which people are injured or killed -- occurs when the moving occupants slam
into the abruptly stopped or nearly stopped car's hard interior surface or are
ejected from the car.
The airbag diffuses the potentially harmful
impact of the human collision by serving as a pillow between the occupants and
the vehicle's interior.
According to Carson-Pettit's Sadtler, the airbag
deploys in one-three thousandth of a second, and because it has four large holes
in the back of it, it is totally deflated "like a popped balloon"
within another second.
COST IS AN INHIBITOR: Mercedes began offering
the airbag as an $880 option in 1985. Today the price would be in the
neighborhood of $1,000, Sadtler says. He estimates that Carson-Pettit has sold
approximately 550 airbag-equipped cars to date.
According to Joe Kremer, sales manager for
Holbert's Porsche; Warrington, Porsche has made the airbag standard equipment
on its 944 Turbo series beginning in 1987. Although exact figures are not
available, Kremer notes that when the airbag was being considered as optional
equipment on some of its other models, the projected cost would have been
$2,100 per side, or $4,200 extra for full front-seat airbag protection.
"That's a lot of money," Kremer notes.
"Fortunately, even though they published it as an option price, they later
on decided that it would not be available on cars it was optional on. But we
never had a customer who wanted them anyway."
That cost factor is another negative aspect of
the airbag, according to Keystone AAA's Hanshaw. In fact, a recent National
Highway Traffic Safety Administration survey shows that although the public
prefers airbags as a passive restraint system, their cost remains the chief
inhibitor to public acceptance of them. Only a third of those surveyed
indicated any willingness to pay the estimated cost of airbags in their cars.
Because a standard-equipment airbag would
inevitably increase the purchase price of a new car, Hanshaw says his organization
is promoting the use of airbags as an optional, not a mandatory, policy. At the
same time, Keystone and the national AAA clubs have been promoting mandatory
seatbelt laws in states across the nation, he adds.
COURT RULING: That's bandwagon which the U.S.
Supreme Court helped launch in 1983 when it determined that the airbag was
"an effective and cost-beneficial lifesaving technology" and
instructed the U.S. Department of Transportation to require automatic
restraints -- airbags or automatic seatbelts -- in all new cars, or provide
sound justification for not doing so.
On the heels of that ruling, the Department of
Transportation has ruled that ten percent of all 1987 model cars, and all 1990
models, must have automatic restraints unless seatbelt use laws are passed in a
substantial number of states. New Jersey has had a mandatory seatbelt law for
more than a year, and Pennsylvania likely will have similar legislation
reintroduced this year.
Extensive investigation into the viability of
airbags as crash protectors began in the mid-1970s, when Ford, General Motors
and Volvo sold or leased more than 12,000 cars equipped with airbags. By August
1984, these cars had traveled a total of more than a billion miles, and had
been involved in 281 front-end and front angle crashes severe enough to cause
airbag inflation.
In analyzing injury data from these crashes, the
IIHS found that the severity of injuries experienced by airbag-protected
occupants was substantially less than that of unrestrained occupants. In
reviewing records of dozens cases involving 1983-85 Ford Tempos and Mercedes
Benz cars equipped with airbags, as well as hundreds of police cars retrofitted
with airbag systems, IIHS also found that no serious injuries or crash deaths
resulted from frontal crashes severe enough to cause airbag inflation.
As a result of such findings, IIHS has come out
in favor of a proposal to modify a safety standard to allow cars equipped with
driver-side airbags to be manufactured beyond the 1990 model year.
EXTENDING DEADLINE: Recently, the National
Highway Traffic Safety Administration proposed an amendment (sponsored by Ford
Motor Co.) to Federal Motor Vehicle Standard 208 which would extend for four
years the deadline by which cars equipped with airbags must provide automatic
crash protection for front seat passengers. Cars equipped with driver-side
airbags and crash-tested manual passenger belts thus would be credited for
meeting automatic restraint provisions until September 1, 1983, the start of
the 1994 model year.
Meantime, cars equipped only with automatic
safety belts still would have to provide full front seat protection by the 1990
model year. So by lengthening the deadline, the amendment effectively will make
it easier for manufacturers to supply their cars with airbags rather than
automatic seatbelts.
According to IIHS estimates, there will be 7,750
fewer fatalities by 1990 if all cars are equipped with driver-side airbags --
assuming a 30 percent use of manual belts by front seat occupants. By
comparison, seventy percent of all front seat occupants would have to wear
automatic belts for those cars to equal the protection offered by driver-side
airbags.
Without the amendment, airbags likely will be
installed only in relatively small numbers of expensive cars, IIHS president
Brian O'Neil told the National Highway Traffic Safety Administration. With it,
automakers are much more likely to install airbags in large numbers of
popularly priced cars as well.
FORD & VOLVO: For example, both Ford and
Chrysler have indicated a willingness to install airbags in a majority of their
domestically-manufactured automobiles. Ford, in fact, already has discontinued
work on non-airbag alternatives for cars which would be equipped with airbags
if the proposal is adopted. Volvo also has said it would equip all of its cars
with driver-side airbags.
One of the problems that must be overcome is the
fact that airbags are not simple modular components that can be installed
easily on a wide variety of car models. Each airbag-equipped car model requires
a separate engineering development and crash testing program.
According to O'Neil, it would not be responsible
to pace the phase-in of airbags ahead of such constraints. Therefore, the
four-year extension proposed by the National Highway Traffic Safety
Administration is reasonable, he says. The Automobile Importers of America also
has advised the National Highway Traffic Safety Administration that extension
of the credit for driver-side
airbags for four more years also should give
adequate time for foreign manufacturers to develop passenger-side airbags.
With that additional breathing time, the
widespread installation of airbags ultimately could mean the achievement of two
long sought-after goals -- safer cars and fewer traffic deaths.
Automall: Good for Dealers, Customers and the City
By Thomas Derr
10/15/1986
Focus
Pg. 164
Philadelphia, PA, US -- When a half dozen South
Philadelphia car dealers got together in 1970 and decided to combine their
resources to establish what was essentially a radical new automobile
merchandising concept, they could only dream about the tremendous level of
success it has reached 16 years later.
In fact, according to Jim Cataldi, president of
Cataldi Buick and Cataldi Dodge in the Automall, and past president of the
Philadelphia Automall Association, many of the Automall's members were still
only dreaming about success until about six years ago.
"At first, the concept did not go at
all," says Cataldi. "These men were the real pioneers. They went out
and with the help of the PIDC (Philadelphia Industrial Development Corp.)
purchased a vast acreage of ground in Southwest Philadelphia. They established
their dealerships there and tried to make the new merchandising concept
work."
PROBLEMS: "It was tough from the
beginning," agrees Kerry Pacifico, president of Pacifico Ford, the first
dealership to open at the Automall, in April of 1970. "At the time, that
area of Southwest Philadelphia was known as the junkyards. People used to talk
about going down to the dumps."
Aside from the aesthetic drawbacks, the early
Automall dealers had difficulty inducing employees to come out to the facilities,
let alone customers, Pacifico says. The area also suffered from a dearth of
restaurants and a lack of public transportation (in fact, there still is a
shortage of both, although the Automall Association does operate its own buses
for the convenience of customers and employees.)
One of the other major problems was that the old
Passyunk Avenue bridge was almost impassable, Cataldi says. In fact, the bridge
was so bad, many of the South Philadelphia customers that had been loyal to the
six pioneering car dealers simply refused to cross it to get to their new
location.
ALL HELL BROKE LOOSE: "It was in terrible
condition, and so narrow that sometimes you had to stop part way across to let
an oncoming car go by. But when that new bridge was opened, in 1980-81, all
hell broke loose," Cataldi says.
Suddenly the Automall was no longer a risky
adventure and potential car buyers began to stream into the area from South
Philadelphia, Delaware County, South Jersey and Delaware.
Part of the reason for the new success can also
be attributed to a new, stronger association within the Automall dealers
network. Cataldi notes that many of the new owners and dealers that have
supplemented or replaced the original pioneers tend to be more advertising and
marketing oriented, so they are more willing to undertake needed advertising
programs to attract potential car buyers.
"I would say the members of the association
spend an average of $40,000 to $45,000 per month on advertising -- which
equates to approximately $250,000 to $300,000 per year," says Cataldi. In
addition to newspaper, television and strong radio advertising, the Automall
association also has special programs targeted at various groups in the area,
such as civic center, churches, and fire companies.
"We try to reach them with sales bulletins
and notices. Sometimes we also give them a little bit of hoopla, with food and
so on. It's just another way of merchandising and trying to reach a potential
car buyer and get him or her out to the Automall when they want to buy a
car," Cataldi explains.
WORKING TOGETHER: So even though the competition
is located right next door, or right across the street, it is a concept that
all the dealers seem to be happy about.
As Bob Marigliani, general manager of Philadelphia
Honda, puts it: "Any new product that comes in helps bring new traffic
into the area. So consequently we all get some excess shoppers. In addition to
the people that come out and want to see your product only, you have some
shoppers that would normally not see a Honda -- but because they have looked at
other products and since they are already here, they will stop in and take a
look."
According to Bob Strauss, sales manager for
Automall Accura, the newest of the Automall dealerships, the Automall concept
is similar in many ways to the large shopping mall.
"I think it gives a customer a reason to go
into different dealerships, to see how they are treated, and to look at the
different products," says Strauss. "That's why they have regular
shopping malls -- so you can go into different stores and look at different
products. There are probably 15 different women’s' stores in one shopping mall,
and everybody has a different product and different prices, and that's the name
of the game today."
USED CAR BACKGROUND: Cataldi also points to the
background of the dealers as being a major strength of the Automall.
"Most of our backgrounds tend to be very
used car oriented, instead of retail oriented," explains Cataldi. "We
came up through the ranks, and we learned how to judge the value of a used car.
What that means is that if a customer brings in a car for trade-in to any of
the dealers at the Automall, he will be getting a very fair and very
knowledgeable estimation of what that car is worth."
Even when several dealers are asked to
independently estimate a trade-in car, their figures are usually only a few
dollars off, he says. That knowledge, combined with the fact that the
competition is only next door, helps ensure that car buyers get "top dollar"
for their used cars, he says.
"It doesn't pay to hide the truth,"
Cataldi explains. "Especially when you consider the fact that when a
customer starts looking at the Automall, he usually makes a purchase within a
day or two."
Cataldi says his sales people have found that in
95 percent of the cases, when they have lost a customer, it is because that
customer purchased a car at another dealer in the Automall.
"We have found that most buyers only shop
one day. Very seldom do they go beyond that, so when they come here, they are
here to do business," he says.
SURVIVAL FOR MANY DEALERS: But the establishment
of the Automall has meant just as much to car dealers as it has to the area car
buyers, and probably more.
According to Pacifico, the establishment of the
Automall meant nothing less than the survival of many of the dealerships that
joined in the venture. One of the major problems was room for expansion. As
Pacifico notes, many of the dealerships had simply run out of room to grow.
Pacifico himself moved from 23rd and Passyunk, while the American Motors
dealership had been located at 18th and Jackson Sts.
"If we had not moved out to the Automall, I
doubt that any of us would be in business today," says Pacifico.
A recent follower of that example is Crisconi
Oldsmobile, which in September 1985 moved to the Automall from its South Broad
St. location, according to general manager Tony Dalonzo.
"The location is definitely better. Our
inventory is displayed better, and we have much more inventory than we were
able to have at Broad Street. In addition, the Automall creates traffic,
because everyone is coming in to see different models. So it's good for
everyone," says Dalonzo.
"When we started the Automall, we accounted
for only a very small portion of the total number of dealerships in
Philadelphia, maybe five out of 50," he explains. "Now we account for
approximately 12 out of 24, and our total volume exceeds more than 50 percent
of the total car sales in the city."
GOOD FOR THE CITY: From a car dealer's
standpoint, the City of Philadelphia is becoming a shell, with the existence of
only a few dealers outside the Automall and the Northeast.
'If you took a census track, and did it by
earnings or by families, nobody in their right mind would come to South
Philadelphia. But since the concept of the Automall was formed and implemented,
the people are coming here in droves -- from all other parts," Pacifico
says. And that bodes well for the city as a whole in terms of increased
revenues.
"I pay more now in real estate taxes than I
did in renting five different buildings downtown," Pacifico explains.
"I have a big plant, and I have to operate it. So it's definitely good for
the city."