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Ascension through the ranks Featured

9:42am EDT July 22, 2002
When James Pilla was 18, he shared two goals with his best friend.

First, he wanted to buy a car dealership by the time he was 25 years old. Second, he wanted to earn his first million by the time he was 30.

Pilla reached the first goal in June 1993, less than one month before his 26th birthday, when he bought a 5 percent stake in Motorcars Infiniti. Pilla blew by his second goal with time to spare.

At 32, the slick-haired, straight-shooting Pilla is a rare breed in today’s business world. Rather than found an Internet venture and strike it rich in the futures game, he’s taken a page from previous generations and worked his way up through the ranks.

Pilla is managing partner and 50 percent owner of Motorcars East, Motorcars West, Motorcars Infiniti East and Motorcars Infiniti West, all part of Lee Seidman’s regional auto dealership empire, The Motorcars Group. He’s also vice president of those four dealerships within The Motorcars Group.

And by the way, if the name seems familiar, it’s no coincidence. Pilla is related to that Pilla. Bishop Anthony Pilla is his uncle.

Unlike many of his contemporaries, Pilla didn’t enter the car business with a freshly minted MBA or as a hotshot salesperson. Instead, he quite literally started at the bottom of the auto food chain — washing and detailing used cars at a local Chevrolet dealer.

Since joining The Motorcars Group, Pilla has earned a reputation for taking floundering dealerships and turning them into cash cows. His four locations accounted for a total of $90 million last year, and Pilla expects that number to reach $100 million by year’s end.

Pilla’s turnaround ability is a result of his never-say-die mentality and a belief that if you invest in your customers, you will always come out ahead.

“People always told me I was too young to do this and couldn’t possibly pull it off,” he says. “I’ve spent my whole life proving them wrong. I met a partner who saw something in me years before anyone else saw it and gave me the guidance and opportunity needed.”

Pilla may have begun his career as a detailer, but he quickly decided that was not his lot in life. He tried to land a job at Fairchild Chevrolet as a car salesman in 1988, but the general manager wouldn’t hire him because he was too young and too unseasoned.

In fact, recalls Chuck Gile, that GM and now managing partner of Motorcars Honda and Motorcars Toyota in Cleveland Heights, Pilla was rebuffed three times.

“I finally hired him on the fourth time,” Gile says. “I was impressed with his persistence, and I liked his aggressiveness.”

Even then, Gile didn’t trust him to be a full-time sales rep. Instead, Pilla was offered a 30-day tryout as a sales consultant at minimum wage. That was all Pilla needed. He not only stayed on after the initial run, but in his first year was among the top-selling Chevrolet sales consultants in the country.

That earned him a promotion to aftermarket manager. In one year at that spot, he increased sales from $100,000 to $400,000.

That was the first time Pilla’s ability to drive improvements rose to the surface. But it wouldn’t be the last.

Says Gile, “He’s very aggressive and very visionary. He knows what he wants to accomplish and puts his efforts into getting it done. And, he’s willing to take risks in order to make that happen. A lot of people aren’t willing to do that.”

The next time Pilla pulled his turnaround act was shortly after he bought into his first dealership in 1993. With annual revenue of $18 million and 22 employees, Motorcars Infiniti was losing money. But Pilla believed he could make the dealership profitable. He took out a second mortgage on his house, borrowed money from friends and family and tapped into his savings to buy his 5 percent stake.

Within six months, the dealership was profitable and Pilla had garnered Seidman’s watchful eye.

“When Jamie and I talked, he was a couple months short of his 26th birthday,” says Seidman, whose Motorcars Group today stands at 12 dealerships. “When I went into business I was a couple months short of my 26th birthday. I had to borrow money to go into business. So did Jamie. There are some definite parallels between us. I saw a lot of energy, enthusiasm and bright ideas in him, so I wanted to give him a chance.”

It didn’t take long before Seidman decided to get Pilla more involved in operations. The two bought a Mercedes-Benz dealership and added it to The Motorcars Group. Pilla was put in charge, and in less than one year, took it from selling 60 to 80 new Mercedes each year to selling 160 to 200 a year.

“He’s got a lot of guts,” says Seidman. “He’s willing to make the tough choices in order to get something to work. Even if it’s not the most popular decision.”

While he deflects much of the credit for the turnaround to others within the organization, Pilla cites several things that helped spark better results: increased advertising, more follow-up calls to customers and potential customers, aggressive pricing policies and beefed up service departments.

All of which has helped bring people in the door and sent more cars out the driveway.

Despite what seems like a tireless schedule, Pilla’s carved out enough time to raise a family. He and his wife live on the East Side with their two children, ages six and four.

The importance of family was instilled in Pilla at an early age. He comes from a large, tight-knit family, and has seven older brothers and sisters, all of whom still live in the Cleveland area.

“Every Sunday, I go to Mass with my mother,” Pilla says. “Then, we go to her house for brunch. We’re a very close family and that’s very important. My brothers and sisters are there. It’s a huge deal.”

And, growing up with a father, Joseph G. Pilla, who was a former chief federal probation and parole officer for Northeast Ohio, and an uncle like Bishop Anthony Pilla, it’s safe to say that Pilla’s childhood was spent toeing the straight and narrow line.

“The rules of our house when I was growing up were simple,” Pilla recalls with a smile. “You can do anything you want, but you better not be on the front page of tomorrow’s paper.”

Seidman says Pilla’s upbringing is evident in the way he treats his co-workers and employees. “People grow up with a healthy respect for others, depending on how they’re treated,” he says. “Jamie is a good motivator because he knows how to treat people the right way.”

The unique childhood also taught him the importance of giving back to the community. Besides the numerous boards that Pilla donates his limited time to, he also sponsors a student at his alma mater, St. Ignatius, paying the student’s full tuition and serving as a mentor.

Time is so much more valuable than money,” Pilla says. “Anybody can just cut a check.”

It’s this belief and commitment to people that both tempers and drives Pilla’s vision in the business world.

Tinkering with existing operations isn’t anything new for Pilla. He’s always demonstrated a penchant for trying new ideas to drive change. In late 1994, he noticed his dealerships wasted an incredible opportunity in the new and used vehicle departments because of poor inventory management.

Further, he blamed the problem on his managers, asserting they couldn’t properly gauge the demands and demographic characteristics of their customers.

Pilla turned to technology for the answer, and hired a college student to enter customer data into an Excel spreadsheet — name, ZIP code, income level, make and color of the vehicle sold, financing option and cost of the used vehicle sold. The entire project cost less than a few thousand dollars, Pilla says, but the results were remarkable.

Between Jan. 1, 1995, and May 31, 1997, gross sales rose more than 15 percent. Advertising costs decreased 43 percent, while Internet costs shrunk 26 percent. The total cost to sell a single vehicle declined $192 per unit, and Pilla says the gross per employee rose more than 167 percent.

In 1993, he initiated three new programs into his four dealerships that few other competitors offered: loaner cars, valet service (pick-up and delivery of cars at a customer’s home) and washing every car brought in for service.

“That started the real windfall,” Pilla says.

The programs were costly, he admits, estimating the price tag at around $1,500 per car.

“I’d spend it all day long because it shows how important it is to take care of our customers,” Pilla says.

Despite his good fortune, Pilla says he doesn’t take anything for granted and often works 70 to 80-hour workweeks in order to stay one step ahead of his competitors.

“There are a couple keys to success in business,” Pilla says. “You have to be awake while your competitors are sleeping, and you always have to risk more than others think is safe. I’ve never been content. I’ve had the mentality to risk everything and never look back if I believe in something.”

Seidman says there’s one more key to Pilla’s ability to overcome whatever obstacles block his way.

“He’s a very good judge of people,” he says. “He can talk to somebody for a while, observe them and determine whether they can get the job done. That’s an important trait if you want to succeed.”

And not coincidentally, it’s a trait Seidman apparently has as well. He did it with Pilla nearly seven years ago.

But now Pilla has a new goal: “Through expansion and acquisition I would like to grow this company to a $500 million business in five years.”

Just don’t tell Pilla he can’t. Otherwise, he’ll make it his business to prove you wrong.

How to reach: Motorcars Group, (440) 232-3057

Dustin Klein (dsklein@sbnnet.com) is editor of SBN.