Gus Johnson

In these tough economic times filled with gloomy headlines and desperate government bailouts, it would seem improbable that anyone in the car business would be doing better than ever.  Running a car dealership would be about the last thing most of  would want to be doing right now, but most of us do not have the training and background that Gus Johnson has. During a recent visit I learned from him what it takes to steer a Ford dealership successfully in the direction of growth and profitability while sales have dropped 35 percent.
First of all, Gus loves Fords. “I’m a dyed-in-the-wool Ford guy,” he said. “My Dad always drove Fords, he worked his whole career as the bookkeeper at the Newport dealership and then I went to work for Ford.”
After graduating from WSU with a degree in finance and economics in 1968, Gus moved with his wife Colleen and their first born, Brian, to Detroit and  took a job in the finance department at company headquarters. For the next 8 years Gus worked on budgets and project development but eventually became restless.
” I did well there and I was promoted but I was kind of bored,” he said. “I felt like I was in a cylinder. You moved up but you were always doing the same thing.”  So when the May Department Store company approached him and several others at Ford, Gus decided to move on.
His job as a financial consultant for the several department stores the company owned required him to travel and move his family around. “One year my two boys started school in St. Louis, moved in the middle of the year to Chicago and then finished in Los Angeles,” he said. “My oldest son came to me and said ‘ Dad, I’m going to be starting high school soon and I really want to go to just one school all four years.’ and I said ‘Well, I guess we’re going to have to find something else to do.”
Gus decided to get out of the corporate world and Ford would be his vehicle. ” I knew a lot of people at Ford so I called up the regional office in Seattle and told them I wanted to buy a store, what do I have to do? ” he said, adding that they soon had him set up to do a “buy-in” at  the Ford dealership in Grangeville, Idaho.
The next six years Gus spent in Grangeville were good for his family and also for his own personal training. “Running a small store taught me all aspects of what it takes to make a dealership work. If somebody didn’t show up I had to do their job,” he said. “The early 80’s were tough and we learned how to conserve a lot of cash. We didn’t make a lot of money but we did make money.” Eventually, however, Colleen decided Gus could be doing better.
“She came to me and said,’ Gus you need more of a challenge, this is not you,” Gus said, explaining that the decision to leave Grangeville was especially difficult since Ford was closing small dealerships at the time and so they could not sell the store. “Basically it meant we had to just close the store and start all over.”
So Gus moved his family to Spokane and went to work for Appleway as a sales manager in 1985, but working with Chevy’s was hard for a Ford man. “I kept wanting to tell people ‘why don’t you go down the road and buy a real truck?” he said laughing. A year later Gus was more than happy to go to work for Empire Ford downtown as their sales manager, eventually working his way up to general manager over the course of the next 6 years.
Meanwhile, back on Auto Row in the Valley, a man named Rich Richardson was doing well with the Ford, Honda, Pontiac and other dealerships but he passed away in 1989, leaving his business in the hands of his wife, Peggy. By 1992 McCullum Ford was losing money and Peggy wanted to sell.
“Peggy tried to make it go by hiring people to run it for her but they just kind of drove it into the ground,” he said, adding that Ford approached him to buy the dealership. “I told them I didn’t have the kind of money to buy that big of a store.” Undaunted, Led Labbie from Ford Finance brought Peggy and Gus together for a meeting.
“I remember it was Valentine’s Day and we met at that restaurant downtown by Cyrus O’Leary’s. Led wrote out the entire buy-in agreement right there on a yellow legal pad and he said, ‘Peggy, you take a copy to your lawyer and Gus, you take a copy to your lawyer and you tell them don’t change one word.” They both did and Gus took over McCullem Ford in March.
“This had always been a great store, it just needed some new attitude,” he said. By 1998, Gus paid off the business and then borrowed the money from Ford Finance to buy the property from Peggy as well.  Changing the name to Gus Johnson Ford at that time,  Gus and crew drove forward for the next several years conducting business as usual until dark clouds began to form on the economical horizon.
“We saw this coming in October of 2008 and decided to come up with a new business plan,” he said. “We had to find ways to save money and get our business right-sized.” A dealership the size of Gus Johnson spends a lot of money in order to make money and so Gus had a lot of material to work with.
One example was the complicated and very expensive computer software system that all dealerships rely on to run their business. The system Gus had in place cost $16,000 per month. The system they now have in place after scouring the market costs $1,795.
For years Gus had leased the corner lots on Vista just west of his store for $7,000 a month. They are now empty. He reduced his inventory by millions of dollars, saving thousands per month in interest. He cut back on advertising and he scrapped plans to build a new $5.3 million dollar showroom.
He has, however, spent nearly one million dollars  in the last 18 months remodeling his service department because the business is growing and that is where the money is made. ” There is a thing called ‘service absorption’ and when it is at 100% your service and parts department are paying all the bills,” he said. Currently Gus Johnson Ford’s service absorption is running at 108% with goals set at 130% in the next few years and then onto 160%.
Gus Johnson’s service business has benefited by a number of factors. The closing of Empire Ford downtown and Bonanza Ford in Cheney along with Wendle Ford’s move from Northtown to the Y on Division, has given Gus a huge territory to service compared to a few years ago. He also has benefited from the  tough economic climate where people choose to repair their old cars rather buy new ones.
With 46 service bays and 21 full-time technicians, Gus has one of the largest shops in the area and he is planning to grow it more. “If I could hire more tecs, I would,” he said shaking his head. “But the last 6 we interviewed couldn’t pass the drug test.” Too bad for them because Gus Johnson Ford has been a very good place for a lot of people to have weathered the current recession. “In the last 18 months we have not laid off one person,’ he said. “In fact we hired 6 people and we are looking to hire more.” One person they are in the process of hiring is someone to coordinate his internet presence.
“I have a Facebook account and a Twitter account only because my advertising agent says we have to take advantage of them,” he said. ” But shoot, I have a cell phone that can text but I sure as hell don’t know how to do it.”
While Twittering and texting seem beyond him, running a complicated business as solid as a Ford truck is something Gus has no problem with.

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