Tuesday, January 28, 2014

January 2014 SDADA Column

I am writing this on my return from the NADA Convention in New Orleans. My un-scientific survey of cabbies, bartenders, shoe shiners and bell men would suggest the retail automobile business is strong. My informal canvas proclaims that dealers left some cash in the French Quarter over the past week.

Six days in New Orleans is enough for me. I am ready to get home. I've had more than enough shrimp, andouille, bourbon and Consumer Finance Protection Bureau. I hope you're not as tired of reading about the CFPB as I am writing about it but it is a looming threat to our business model and we must be vigilant.

I attended the AFSA meeting in New Orleans and listened to Patrice Ficklin, CFPB Fair Lending Director (I'll let you decide what that means), address a room full of automotive lenders. She told them that current dealer reserve system causes unfair lending issues. She did not tell them the methodology in deciding that.

She suggested that flat fees were only one example of an alternative she believes "there may be a variety of alternatives to discretionary markup". She offered no other example other than flat fees.

This lady is smart, has an agenda (one that is not favorable to dealers) and answers to no one (other than, perhaps, CFPB Director Richard Cordray). Citing bureau policy, Ficklin declined to answer media questions after her presentation.

It was none other than the Christopher Dodd, co-sponsor of the Dodd-Frank (which established the Consumer Finance Protection Bureau), who said "When the public's right to know is threatened, and when the rights of free speech and free press are at risk, all of the other liberties we hold dear are endangered."

While NADA continues to fight for the dealer reserve system, they have issued guidelines recommending each dealer set a standard interest-rate charge to borrowers, which could only be modified for specific reasons like a competing offer from another lender or dealer.

NADA will be offering this step-by-step program for dealerships of all sizes. While the program does not offer "Safe Harbor", it addresses the fair-lending concerns the CFPB has raised.

It strongly recommend that you look at it and consider whether or not it will work for you.

McConnell Takes Helm at NADA

Forrest McConnell, a Honda and Acura from Montgomery, AL, assumed the position of NADA Chairman in New Orleans. Forrest came on to the board the same time I did. He is smart, has agree at sense of humor and is an attorney. He will do a great job.

NADA Releases Additional ‘Dealer Data’ Guidance

NADA’s Legal and Regulatory Affairs department has issued a sample Service Provider Dealer Data Access Addendum (“Addendum”) and cover memo for dealers to use with their third party service provider vendors. This follows a memo sent last August from NADA Legal and Regulatory Affairs to all NADA members that contained an overview of the primary regulatory issues surrounding Dealer Data, numerous practical tips for dealers to consider when protecting their data, as well as samples of the contract provisions required under federal law when a dealer wishes to allow access to Dealer Data with a third party service provider.

The Addendum was drafted for dealers in an effort to clarify and simplify dealers’ obligation to ensure that their applicable vendor contracts contain certain provisions required under federal law. It’s only a sample, and should be used by dealers only after consultation with their legal counsel. Adoption of the Addendum is not the only way dealers can meet their legal obligations and it may not be right for every situation. However, dealers can choose to use the Addendum to amend their service provider legal agreements to satisfy the applicable contractual requirements. NADA is encouraging dealers to review the Addendum and cover memo with legal counsel, and if applicable, to present the Addendum to service provider vendors for signature.

Thursday, January 16, 2014

Tying the Knot with Teen-age Boys

I have mentored a group of 6th-8th grade boys, the Explorers,  since 2001. Several years ago I began teaching them how to tie a necktie. They are old enough that they need to wear a tie for vocal or band concerts and contests, athletic events and other special occasions. I believe that if you're going to wear a tie, you should tie it correctly, make it the right length and pair it with appropriate clothes.

So it has become an annual tradition now that we spend the first two meetings after they come back from holiday break learning to tie a necktie. We recently finished our tie tying lessons and I can report that they did a fine job.

I first tell them that you cannot just "hang" a tie on yourself to be a "well dressed man". You must combine shined, hard-soled shoes, dress slacks (not cargo pants) and a nice dress shirt (preferably white or blue) with the tie to complete the package. This brings some vocal skepticism that sneakers or basketball shoes don't go with every article of clothing that they own!

I teach them the four in hand knot the first week and the double windsor knot the second week. I emphasize the details - length of the tie, shape of know, dimple, etc. While not every knot is perfectly shaped and dimpled, I know that they can do much better if they get a chance in front of a mirror. They seem to embrace and enjoy the sessions.

I also tell them that the girls love it when the guys dress up. It makes them look older and more handsome. While the smiles sheepishly creep across their faces at this report, it is easy to detect the wheels turning in their minds. Research also tells us that young men are more confident and behave better when they are well dressed. I don't tell them this part. This is my secret!

I believe part of the reason that these guys don't like wearing a tie is because they know that wearing a "clip-on" tie is somehow inherently wrong and that asking your dad or mom to tie your tie for you isn't something a teenage boy wants to do. Once they know how to tie their own neck tie, it "liberates" them to wear a tie when they are asked to or when they see fit..

When our sessions are done, I think most leave self-assured and satisfied that they are ready for a great new wardrobe frontier beyond t-shirts and sneakers! (Though I know it won't take them long to revert!)

When I go to a high school concert or see any of the former Explorers dressed in a tie for some other event, I often get a comment from them or a question about how their tie looks. My answer is always the same - YOU LOOK GREAT!!!

Friday, January 3, 2014

Harry K

My Dad, Harold William Knust, died today and we wrote an obituary that was a fine tribute to a truly great man. But in many respects, it was incomplete. I'm not sure you can tell the story of any person in 500-600 words, but I know you cannot tell my Dad's story.

Dad grew up in a very stoic, German family. He was the fourth of sixth children growing up on a farm outside Howells, NE. Dad was a typical "middle child", fighting for attention growing up. In some ways, his fight lasted throughout his life. He used that as a strength in his professional life.

His childhood, with five siblings, taught him to be competitive. Whether he was golfing, playing cards, playing boards games with the family, watching his grandchildren compete or selling soft drinks, beer or cars, Dad wanted to, no, he had to win. We heard many stories of competition as he grew up.

Dad used that competitive spirit to make the Howells high school varsity basketball team as a freshman. That was certainly an achievement but even more so considering that he was the shortest guy on the team. By all accounts, he was no superstar, but he was competitive and gritty and did what he had to do to help his team win. It instilled in him a love for the game of basketball which he later passed on to and shared with me and my son.

He picked up his nickname while in high school as trumpet player. Though he wasn't a great trumpet player, he drew the first name of the great trumpet player at the time, Harry James, as a nickname. Harold became "Harry" while at Howells High. It is worthwhile to note, however, I never heard Grandma call Dad "Harry". That was not the name she had given him!

Dad went to the University of Nebraska. He earned his bachelor's degree in Business Administration. He worked his way through college selling furniture. I always felt like he really appreciated his education because there were no scholarships nor help. He bought his education with his own hard earned money.

Dad liked to party. He did his share of drinking at school. My Mom thinks he ruined his health in school. Between his eating and drinking habits, Mom thinks he set the table for the disease, diabetes, that caused him so many problems later in life.

Dad and Mom met at the Rose Bowl, a bowling facility that was on Saddle Creek Road in Omaha. Mom was attending Duchesne Academy of the Sacred Heart in midtown Omaha. Now a high school, Duchesne

was a college in the 1950's.

I've not heard that many stories of my parents' courtship but I know they were married in October of 1959, shortly after Dad's graduation from UNL. Dad took a job with Pillsbury in Mason City, IA, where I was born and then they moved on to Grand Island, NE, where my sister, Christy, was born.

Dad did well with Pillsbury but my Mom's father, Frank Wurning, a beer distributor in Winner, SD, saw the "salesman" in Dad. He offered to help Dad get into business and so, in 1963, Dad and Mom moved to Chamberlain where they had my other sister, Lisa, and Dad and Granpa Frank started Chamberlain Bottling Company. They started bottling Nesbitt products but eventually bottled Pepsi-Cola.

Long before Pepsi was a household name, entrepreneurs like Harry Knust, were bottling and selling it. It was Dad and guys like him that made Pepsi the great brand that it is today. Dad was affiliated with Pepsi in some way until 1994, when the reality of how the distribution network had changed caused him to sell.

I think one of the reasons he loved the soft drink business was because his best customers were kids. Dad was always a big kid and the soft drink business allowed him to function in his element. He was a great supporter of all youth activities. He thoroughly enjoyed all aspects of that business.

He had a run as a beer wholesaler when my Grandpa passed away. Dad bought the Schlitz distributorship from my Grandma in 1971 and held that business until 1978. Dad saw that the Schlitz brand had peaked and sold that business while there was still value. The Schlitz brand died shortly thereafter.

In 1980, Dad bought Cle-Kal Chevrolet-Oldsmobile in Chamberlain and named it Harry K Chevrolet. From then on he became known as "Harry K". He later added the Buick and Pontiac franchises. He bought the Ford, Mercury and Lincoln store and NAPA store in Winner in 1987.

He was born to be a car dealer. He had vision, was creative, he always thought big and he loved people. He soon became "Harry K" which was almost like a stage name for him. He loved being "Harry K". It is ironic that name came up when he was visiting me at college. One of my friends suggested it. It was perfect because the "K" rhymed with Chevrolet and no one could pronounce our last name anyway.

The ads below tell the story of Harry K better than I can. He had fun being a car dealer.

Dad looked at all of his customers as friends and treated them as such. There was nothing he wouldn't do for someone who had bought a car from him. He was a customer service genius.

He was my business partner and my mentor. There were many times I was frustrated with that that but now, looking back, I realize how fortunate I was. Dad was a great businessman and though sometimes not the best teacher, he was ALWAYS the best cheerleader.

Dad was civic minded. He started the Chamberlain Chamber of Commerce in 1963. Dad realized the importance of the community working together. He served on the city commission for nine years. He organized the school's athletic banquet for many years. He showed me how to serve others long before the Jesuits ever got a hold of me.

Cartoon by Sheree Hickey - 1990
Dad did not have many hobbies but he loved to golf. He started dragging me to the course when I was 6 years old. He had a standing game every Saturday morning. He had a terrible swing (legs too far apart and back swung too far) but his competitive spirit inspired him to excel at the short game so he could win his share of bets on Saturday mornings. Later in life when his body started to fail him, he lost his ability to play the game and found himself with only cards to fill that competitive drive.

Though Dad was a proud South Dakotan, he always loved the Nebraska Cornhuskers. We always kidded that he was the inspiration for "Husker Harry", the mascot before the current "Herbie Husker". As far back as I can remember, Saturday afternoons in the fall were about Husker football.

Dad and Mom took me to my first Husker football game in 1969. On Friday night, we stayed on the ag campus with the team and we were the guests of Husker coach Bob Devaney. Nebraska beat Oklahoma 28-21 that Saturday afternoon. The game, the pageantry and the excitement won me, a 9 year-old boy, over for good. I've been a Husker fan ever since.

But Dad won my wife, Judy (who can't watch if the Huskers aren't winning by at least a touchdown), my daughter, Rachel (who married a Husker), my son, Alex (who wanted to skip school after the Huskers once lost a big game - Grandpa thought that was perfectly reasonable) and my daughter, Sarah (who always knew enough to root for Nebraska because everyone will be crabby if they don't win) over with Husker Fever.

We had many fun trips to Husker games over the years. The highlight of those Husker trips was the 1996 Fiesta Bowl when Dad and Mom hosted a group of Husker fans at their home in Arizona. The Huskers took the Florida Gators to the woodshed in the national championship game. Dad had a smile on his face for six months after that one!

Another experience Dad and I shared over the years was the Final Four. I have told the story of how we made it to our first Final Four in 1982. But we shared at least a dozen others. My friends love to tell "Harry stories". In the early days, Dad would keep up with us drink for drink. After he could no longer do that, he just tried to keep up with us physically. That became too difficult as well. But I am grateful for those trips we had together - those were some great memories.

He was the PA announcer for Chamberlain Cubs basketball games from 1963-1992. My best guess is that he called over 300 games. I took over for him in 1993 and still announce to this day. This is our 51st year at the microphone at the Chamberlain Armory. He taught me how to get the best seat in the house for every game!

In his later years, Dad enjoyed just being Grandpa Harry. He loved attending his grandchildren's events. And like a good Grandpa, he was very proficient at bragging about them.  Even if his grandson or granddaughter struck out, Grandpa Harry would brag about how graceful they were while doing so. God help the official who would rule against Grandpa Harry's grandchild.

As we prepare to put Dad in his final resting place, the saddest aspect for me is that he will not be alive to see all his friends at his funeral. Dad loved people and loved to visit. It will be the great missed opportunity for him.

I miss you Dad.

Rachel Millard's eulogy for her Grandpa Harry can be found here.