It was a risky move, without a doubt. Yet no one talked Greg Nelson out of buying a bankrupt, small-town auto dealership that had been forced by a court to close amidst charges that its owner was defrauding customers.
"I don't think Greg is the kind of person you talk out of anything-or talk into anything, for that matter," says Nelson's legal counsel, Harvey Dunn, a partner with Schottenstein Zox & Dunn. "A new car dealership was something he always wanted to have."
As it turned out, that unshakable self-confidence came in handy in making this particular deal.
Even though Nelson didn't find out about the 1989 sale of Chamberlin Motors in U.S. Bankruptcy Court until after a deal had been tentatively closed, and even though he had no prior experience in new car sales, no one was going to stop him from trying to enter a bid.
According to John Cannizzaro, a partner in the Marysville law firm of Cannizzaro, Fraser & Bridges, who represented another potential buyer during the Chamberlin Motors auction, Judge Donald E. Calhoun Jr. vacated the prior sale, giving Nelson a shot at buying the shuttered Marysville dealership.
"He outbid everybody," Cannizzaro recalls.
Although his own client, Roby Inc., went home empty-handed, Cannizzaro says he was impressed by Nelson's immediate interest in learning about his new investment.
"He seemed very earnest," Cannizzaro says. "After he had outbid everyone, Greg asked me my opinion about what it was like in Marysville; about what was important to the folks here. I thought that was insightful on his part. I told him people here want to be treated fairly. Marysville is a small, close-knit community so a lot of things depend on your reputation. If you have a good reputation it will carry you. The dealership he took over did have a tarnished reputation in this community, so he had to win a lot of people over."
That was just one of the challenges Nelson would face in turning around the Chrysler dealership he paid nearly $1 million for.
"There was almost-2-year-old product on the grounds and in '89, '90 and '91, Chrysler was in a little bit of a lull, too, so we didn't have the product and we didn't have the reputation," Nelson says. "It's one thing to start a business from scratch, but instead of starting on the ground floor, we started in the basement."
Fortunately, Nelson found the stairs quickly. Though he was a novice to the new car industry and a newcomer to Marysville, he was a veteran entrepreneur. He had already built and sold off two Columbus area companies: Mobile One, a $2 million cellular phone business, and Columbus Classic Cars, a $6 million exotic and high-end used car dealership. Those past successes were proof enough for Nelson that he could make this venture work, too.
The soft sell
Nelson's plan seemed simple enough. He knew he was an outsider. He knew the dealership's image had been tainted. He also knew he was the only game in town when it came to certified Chrysler maintenance and repair. That was key.
"We had to establish ourselves in the service department first," Nelson says. "I knew a lot of the people in the area here already had Chrysler products. I figured if we won 'em over in service, we could win 'em over in sales."
Nelson hired service technicians and sent them to school for additional training. He reinforced "the importance of the customer" with them weekly. Then he started advertising in local publications. When customers came in, he did his best to make sure they left satisfied.
"If they weren't happy, I'd eat a repair bill or step up to the plate and pay for a previous problem that occurred under the previous owner," he says. "Small-town people expect that."
The word spread quickly.
"When he came to town, I was already driving Chryslers and it seemed he did a real nice job taking care of people and customers," says Ken Kraus, director of administration for the City of Marysville. "Nobody is perfect, but if there is a problem he takes care of it and he takes care of it right now."
"The previous owner seemed more concerned with getting the money in than providing service," agrees Cannizzaro, who also drives Chrysler products-four of which he's bought from Nelson Auto Group. "Greg is more concerned with making the customer satisfied. He figures the money will come later. That's, I think, what helped him turn it around."
"Greg is just good with people," adds Dunn, whom Nelson considers a mentor as well as his attorney. "Besides being a good businessman, he's honest. People can trust him. He's well liked. He has a very, very fine reputation. He's well respected by the community he serves and he's well respected by Chrysler."
Indeed. Nelson Auto Group has won every award Chrysler Corp. can give a dealer, Nelson boasts, including four 5-Star Service Quality Awards and two 5-Star Awards for Excellence. In addition, the business community has lauded Nelson's success with an Ernst & Young Retail Entrepreneur of the Year Award in 1998 and a Better Business Bureau Business Integrity Award in 1994.
"I think it took him a period of time, because of what happened to the previous dealership, to get the trust back," says Union County Commissioner Don Fraser. "People wanted to see who Greg Nelson was and what he was about. People wanted to see if he was going to be around."
It's been nearly 10 years now since Nelson bought that small, failed car dealership a dozen miles northwest of Columbus. Today, Nelson Auto Group's 115 employees operate out of a sleek, custom-built facility that's more than double the size of the dealership's original home.
"One thing's for sure," Nelson says. "We're in business for the long haul."
Shoring up the service department may have helped Nelson win business from existing Chrysler owners-even some who may have been alienated by the previous dealership-but it didn't bring new customers flocking into the showroom. Nelson needed to boost his image throughout the community, and not just as a businessman. He needed to build a reputation as a good corporate citizen.
Nelson threw his dealership's support behind local groups such as the 4-H Club, FFA, Little League and the Humane Society. He's even provided cars for the high school Homecoming parade.
"Just about any worthwhile charity in the community we got involved with," Nelson says.
A long hallway just off his dealership's showroom floor attests to his civic commitment. It's lined with plaques of appreciation, awards and banners from assorted county and state fair livestock purchases.
"You can't come into a small town and just take from it," Nelson says. "You have to give back."
That attitude has not gone unnoticed.
"The one thing that really sticks out in my mind is the fair and him coming in and buying the livestock to help the junior 4-H clubs," says Lori Harris, membership service coordinator for the Union County Chamber of Commerce. "I think that's a big thing. He might not even look at it that way, but to me, it seems like people like to see that. They like to see business owners taking part that way."
Kraus says some organizations have become almost too accustomed to Nelson's giving nature.
"Much to Greg's chagrin, it's almost like people expect it now and they don't give him the credit that's due for being such a supporter of community events," Kraus says. "Some people understand he's still running a business and he can't give the shop away; they recognize he can't give every time. But if it's a good, communitywide event ⊃ he's probably there in some sort of support role."
Nelson's involvement has clearly won him some fans-and some respect. He's confident it's brought him more sales, too.
"They started to buy from us," he says.
"He supports the community very well," Dunn concludes, "and that's another contributing factor to his success."
Smoothing out the bumps
Pulling the dealership out from under its previous cloud of controve rsy turned out to be the easy part. Getting the finances turned around was another matter.
"We lost a lot of money the first, second and third year," Nelson says. "It was almost curtains. I had to get cash advances from my credit cards to make payroll sometimes."
Still, he persisted. Though his balance sheet showed the dealership was as much as $280,000 in the red one year, sales at Nelson Auto Group kept increasing. That kept his hopes alive. In 1992, the dealership showed its first profit under Nelson's ownership. That went back into the business to help replenish what had been lost in previous years, as did the company's profits from 1993 and 1994.
"It took almost as long to make money again as it did to lose the money," Nelson recalls. "We didn't get even for six or seven years."
Part of that was due to his increased investment in product lines. In 1992, Nelson added Jeep and Eagle to his inventory. In 1994, he added Dodge trucks. In 1995 came the crown jewel of his collection: Lamborghinis.
"I had sold a lot of used Lamborghinis under Columbus Classic Cars and, because of that, I had a following of people with exotic cars," he explains, fully aware that the racy Italian sports cars lining his showroom floor are a grand deviation from the family sedans and mini-vans that have become his dealership's mainstay. "These are people I've been doing business with for eight or nine years and people I want to keep doing business with. I just can't turn it off."
In 1997, the payoff was grand. Nelson Auto Group was named the No. 1 Chrysler multi-line dealership in the region, selling roughly 2,000 new cars. That's 660 percent of what Chrysler expected the dealership to sell that year, based on its size, location and past volume. In addition, Nelson Auto Group was named the top-selling Lamborghini franchise in the nation, selling 18 of the $250,000-and-up import cars last year.
Now that Nelson has established his dealership as a high performer, his next challenge is maintaining that crown.
"When you get up there and get things rolling fairly well, it's not easy to stay there-especially when he's very subject to the winds of the economy," notes Kraus. "It's probably harder to stay on top than to get there because you've created the expectation. He spoils his customers and if there's any slippage he'll probably hear about it."
Dunn says Nelson-who is eyeing $80 million in sales by year's end and shooting for $100 million in 1999-appears ready for that test.
"Greg is a real entrepreneur," Dunn says. In fact, Dunn says he never questioned whether Nelson could pull off the turnaround.
"A lot of the proof is in the pudding in Greg's case," he says. "He's become one of the biggest Chrysler dealers in the area and the No. 1 Lamborghini dealer in the country virtually overnight. He knows how to sell and he's a good guy. You don't get people to come from all over the country to Marysville, Ohio, to buy a Lamborghini if you don't have a good reputation."
That reputation means a lot to Nelson, too.
"Having a good name is most important in my life," Nelson says. "My word is gold. That's why I've done business with the Les Wexners and the John McCoys of the world. I can do it on a handshake deal. They know they can trust Greg Nelson. If you work really hard and treat people with respect, good things will come to you."