One on One with Herbert Yardley, Owner of Massey Yardley Chrysler
Friday, December 19, 2008
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SUSIE GHARIB: So what does the bailout mean for car dealers? Joining us now is the owner of a Chrysler dealership for the past 50 years, Herbert Yardley of Massey Yardley Chrysler. It's near Fort Lauderdale, Florida. Hi Herb, so nice to see you on NIGHTLY BUSINESS REPORT.
HERB YARDLEY, OWNER, MASSEY YARDLEY CHRYSLER JEEP: Hello, Susie.
GHARIB: Well, tell me, does this bailout help you sell cars?
YARDLEY: Yes ma'am, it definitely does. It establishes the viability of the company. That's one of the key ingredients to our attracting customers.
GHARIB: So do you expect consumers now to come in and hand over some money to buy a new car?
YARDLEY: We want consumers to come in. We need credit for consumers right now. The credit is the piece that's still missing. It's very difficult for a customer to secure a loan and they're currently paying very high rates.
GHARIB: But my sense of American consumers right now is they're so worried about holding on to their job and holding on to their cash, that even if banks were ready to lend out loans at good rates or whatever, you still wouldn't have people coming in to buy cars. So what has to be done to get car sales going again?
YARDLEY: Well, Susie, you're right about consumer confidence. However, we have very, very good products and people have a constant need for automotive transportation. If the credit markets are in place and our companies are viable, which the government has just assisted with, we believe we can do things to stimulate the automobile business.
GHARIB: We hear about these on again-off again merger talks between General Motors and Chrysler. Would you be in favor of a merger of these two big car companies? Would your dealership benefit from a merge?
YARDLEY: I don't know that I can really answer that. What I can tell you is that the dealership benefits from very good products. Today with Chrysler, we have good products. Cerberus has put a great management team in place at Chrysler and I think we're doing very well. Give us a little consumer credit. Let the banks ease up some credit and I think we'll do very well.
GHARIB: Let me ask you this way and you've been in this auto business a really long time and this is a particularly tough time. A year from now, what will we be saying about the Detroit big three? Will there be big three? Will there be big two? Will there be one big one or none?
YARDLEY: Susie, I'm not smart enough to answer that but I know that it will not be none. And I do know that the American people compete much better than they're given credit for and I think the viability of the American companies can be shown rather quickly.
GHARIB: You know Herb, there are a lot of American consumers who feel that Detroit doesn't really make good cars. Is there anything that Americans auto makers can do to change that perception or is it too late?
YARDLEY: No, I don't think it's too late, but perception is a very difficult thing. We've had years of bad publicity. I think if you look at most of the ratings today, you'll find that domestic automobiles from all three manufacturers rank very high in consumer reliability. In our case, I know that our warranty costs have gone down dramatically which is the key indicator of how reliable the products are. I think we can close our eyes today, sell cars to our mothers and give them a very reliable product.
GHARIB: You were around and involved during the Chrysler's first bailout back in the 1980s. How would you say this situation this time is different?
YARDLEY: The biggest difference right now is we had credit back then. Credit was not an issue. Today, we have a difficult time arranging credit for even people with the very highest credit ratings and most of the banks and finance companies we deal with about eight of them -- are putting standards very high. Secondly, our rates to the consumer are high. The American public has heard about how low interest rates have gone, but it hasn't reflected itself in the consumer market. The consumer is still asked to pay high interest rates. So what we need right now, in addition to the aid we got today is aid for the credit markets so that we can have credit and give them very low prices to our customers.
GHARIB: What's your prediction for 2009? How are car sales going to go?
YARDLEY: That's-- that's too difficult Susie, but I would tell you this, I don't think it's going to get any worse.
GHARIB: All right, well, we'll leave it there. I hope -- I hope you get some good news in the New Year. Herb, thanks so much for coming on the program tonight.
YARDLEY: Thank you, ma'am, enjoyed it.
GHARIB: My guest tonight, Herbert Yardley, owner of the Massey Yardley Chrysler dealership.
