A mainstay of Spokane Valley’s Auto Row, Gus Johnson Ford owner Gus Johnson has worked in the automotive industry much of his career. 

Freshly graduated from Washington State University, the Newport, Wash., native worked in the accounting department at Ford Motor Co. in Detroit. Lured away to work a few years for a department store chain, he returned to the car business in 1979, when he bought a Ford dealership in Grangeville, Idaho. 

After Ford shut down the Grangeville store, he came to work for a Chevrolet dealership in Spokane. Contending his passion always has been Fords, he worked as sales manager at Empire Ford for a few years before the opportunity arrived to buy a Ford dealership in Spokane Valley. He has owned and operated it since 1992. 

We sat down with Johnson earlier this month to discuss his business and the automotive industry as a whole.

Give us a general overview of your operation as it stands today.

Gus Johnson: We have 75 full-time employees. We sell roughly 50 new and 60 used cars a month, and we have 46 service bays, which is a huge part of our business. We have about 7 1/2 acres, not including two lots I lease out. 

I bought the dealership March 1, 1992. It was McCollum Ford. Harold McCollum and Tommy Crawford started it in 1944 as a used-car lot and got the Ford franchise in ’46. When Mr. McCollum passed, it was sold to Rich Richardson, and when he died, I bought it from his widow, Peggy Richardson. 

How did that come about?

GJ: I was working as general manager for Nate Greene at Empire Ford at the time. Ford Motor Co. has a guy they send in to audit everything once a month. This gentleman’s name was Lud. Mrs. Richardson, after Rich died, tried to run the store for about three years, and they couldn’t do it. Lud contacted Mrs. Richardson and said, ‘Hey, I got a guy who is willing to buy the store.’ 

It was kind of interesting because I didn’t have any money, and it was a buy-in, which was really great. I remember Lud took Peggy and me to a restaurant downtown one afternoon, and on a legal pad, he wrote the whole buy-sell agreement. We made copies of it, and he gave it to each of us and said, ‘Take this to your attorney. Tell him not to change one word.’ We did, and I took over March 1.

What condition was the dealership in when you took it over?

GJ: When Rich had it, he had multiple franchises, and they were trying to sell off the franchises. They had Honda and Pontiac and Mitsubishi—just a lot of them. I ended up with the Ford store, which is great. With nobody with their seat in the chair, it was losing money. The reputation had gone downhill. Facilitywise, it was ok, but we’d lost a lot of customers.

You owned the dealership for a number of years before you changed the name. Is that right? 

GJ: I owned it from 1992 to ’98 and changed the name in ’98. That is when I bought the stock out from Mrs. Richardson. I thought that would be a good time to change the name so we could change the culture. 

It had become very confusing for people. I thought we did a good job, but we really didn’t. People thought there were four Ford stores instead of three. They thought there was Gus Johnson Ford, McCollum Ford, Wendle Ford, and Empire Ford. We didn’t differentiate that the way we should have. People would call up and say, ‘Where you located?’ And I’d say, ‘Well, we’re the old McCollum,’ and they’d say, ‘Oh, I know where that is.’ 

It took us a few years to get over that, but we’re pretty entrenched now. People know who we are. 

You were around for the inception of Auto Row. How did that come about? 

GJ: That came about with my advertising agency, the Quinn Group. I was working with Bonnie Quinn. We thought about how we could brand this strip. Auto Nation was on board; Dishman was on board. We came up originally with a website, and we all put some money into advertising for Auto Row as a group. 

We wanted it to be a destination, and we had plans to really clean the area up. We just needed some tax breaks from the city (of Spokane Valley). Unfortunately, at that time, their whole focus became, where are we going to build a city center? That’s all they thought about for two or three years. They lost the whole concept of what we’re trying to do. 

Where does the Auto Row effort stand now?

GJ: We kept it as a branding and advertising thing for us, but the collaborative Auto Row kind of went away. 

Now CarMax is coming in. That’s the first CarMax franchise in the state of Washington. One of their criteria is to be on an auto row. At some point in time, we may put that back together as a cohesive unit and brand ourselves as Auto Row. 

But before we can do that, we’ve got some areas to clean up. If you go up and down Sprague, it looks a lot better today than it did six or seven years ago, but there are still some areas that we’ve got to clean up. 

You mentioned CarMax coming in. What’s your take on its entry into the market?

GJ: CarMax is the biggest used-car seller in the United States, and they advertise heavily. They’re a one-price store. At this store, their lot will hold 300 cars and trucks. 

But we look forward to them coming in because I think it will draw more people to Auto Row. If you can’t find a car there, you’re just going to keep coming down the street. 

In addition to CarMax, it seems like we’ve seen a fair amount of investment in the dealerships on Auto Row in recent years.

GJ: And I’m glad because there’s times you think you might lose somebody. I remember one time, Auto Nation was thinking about moving its Toyota store. Once one major guy would leave here, it would just devastate this place. And there’s nothing to do with a car dealership except make it a car dealership. 

The manufacturers have dictated to most dealers that they will update their facilities. Honda did it. Acura did it. Chevrolet did it. They’re down at Subaru doing it right now. We just completed ours. 

It makes everything look cleaner and better. It says, ‘Hey, we’re here and we’re all viable, and we’re here to help the customer buy a car.’” I don’t care what kind of car. I’d like them to all be Fords, but that’s not going to happen.

When you update a building like that, do you see a tangible return on investment? 

GJ: The manufacturer thinks there is. It’s really hard to measure. You get really favorable comment from customers. We added another waiting room, which we really needed to add. And the new furniture is nicer for the customer. The showroom is brighter and cleaner. 

But I don’t know that a customer is going to come here because it’s nicer on the outside. I believe the dealership is a reflection of the people inside the building. That’s why people come here.

What has the sales trend been over the last year? 

GJ: We need to trend both sides up. We want to move our used-car inventory up 15 to 20 units a month and our new cars up by 15 a month too. 

It was tough on the new-car side with inventory. It’s still tough. Ford Motor Co., they only build so many vehicles, and there’s an allocation system. The manufacturers never thought the demand would come back as quickly as it did. 

It’s hurt us in terms of getting what we can get. Like all-wheel drive Fusions, which in our area are great cars. The only way you can get an all-wheel drive Fusion is to buy the titanium model, which is the top-of-the-line, loaded Fusion. Ford has recognized they have to get a different price point to compete with things like Subaru. What they’re going to do this year is build an SE model in four-wheel drive. 

Now, in Fusions, will we get more all-wheel drives? No. All we’ll do is take half of those Titaniums and make half of them the lower-end model. We won’t have more all-wheel drives, but we’ll have a different price point. 

What are your projecting for growth this year?

GJ: We’re projecting about a 30 percent increase for us. That seems pretty aggressive, but it’s really not if I can get the inventory and I can get the right amount of employees. You have to have the staffing in place. It’s tough to get good salespeople. It’s tough to get good technicians. There’s a lot of demand out there. 

To achieve a 30 percent increase, how many people would you need to add this year?

GJ: We want to add four additional salespeople. Minimum. Staffed at that level, we would be able to achieve the growth, as long as we do our jobs right. 

You mentioned availability of inventory as one challenge. What are other challenges in your industry right now?

GJ: The lending institutions have a lot of money to lend, but the credit scores of a lot of our people are a little bit lower. You see some more credit-challenged people than we had in the past. It makes it harder to sell them cars. 

The digital world of advertising is another whole new challenge for dealerships. It used to be newspaper, radio, TV, and that’s all we thought about. Now the Internet, the mobile apps, the iPads have changed all of that.

The younger generation is all into this. You really have to be on the Internet. You have to be where they are doing their research. When they come in, they’ve been online. They know what you’ve got, what it’s equipped with, and what it’s priced at. They don’t want to negotiate. They say, ‘I’m here to buy that car, and then I want to get out of here.’ 

Our traditional buyer, the older truck buyer, they still like to come in and negotiate. 

You mentioned CarMax is a one-price dealership, and you just mentioned that the younger generation doesn’t like to negotiate. Do you see your dealership or your industry moving more toward that model?

GJ: I don’t think so. If you’re a true one-price store, you do not come off of that price at all. I would like to price a car where if I had to move, I would. Sometimes you have room, and sometimes there’s nowhere else to go. 

I think the Internet gives you that ability to be a one-price store without having your car stickered at one price. When we put a car on the Internet, we usually have that car priced extremely competitive to attract that one-price buyer. 

What do you do when you’re not working? 

GJ: I golf. I fish. That’s about it. 

I’m pretty content. I still work about six days a week, but if I want to take time off, I can. I like to come to work. I enjoy being here. I like to talk to people who are buying cars or out in service. It’s just a people kind of business, and if you like people, it’s a great business. If you don’t like people, you shouldn’t be here.

How old are you?

GJ: 67.

Have you started succession planning? 

GJ: We have a succession plan. We actually have two or three of them depending on how things go. We started that about 10 years ago. 

It’s important in a family-run business that you do that. A lot of guys don’t. They say the hardest part of a succession plan is the first generation going to the second generation. Then after that, it becomes easier. 

My youngest son, Jason, works for me. He’s worked for me for 18 years. He would eventually like to take over the dealership, and we’re grooming him that way. We’ll see how that develops. It would be nice to have that work out that way.