Automotive

 

 

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."