"In all the years I'd been at my father's store, I'd never heard the word 'overdraft,' " Mancuso admits. "I quickly learned how to turn frozen assets into liquid assets. We bailed out of used cars, sent new cars back to the factory, and cut back on parts to the point where, if a guy came in for a tune-up, we'd have to run down to K mart for spark plugs."
These were desperate measures, and Mancuso knew it. Slowly, as though he were fashioning a dealership from scratch, he began to put together a new way of doing business. He moved to Barrington, and joined the Rotary Club and the Chamber of Commerce. He fired his old salespeople and hired new ones. He also began a series of imaginative promotions: a coupon good for the use of a Seville for a day; catered new-car introductions with salesmen dressed in tuxedos; copies of The Wall Street Journal with a special insert -- a fake front page of The Village (Cadillac) News -- handed out to Chicago-bound commuters each morning at the Barrington train station. "They loved it," Mancuso recalls. "That one sold 45 automobiles."
Some of the changes were more radical than others.
"There was a belief in this business," says Mancuso, "that if a guy didn't buy his car from you, and he came in for warranty work, that you had the right to insult him, to abuse him, to toss him back out on the street. I was taught that by my father, and I used to do it. Then one day, I was out back in the shop, watching two mechanics twiddling their thumbs. I asked my service manager, 'How many warranty jobs came in today that we threw out?'
" 'Eight,' " Mancuso replies, acting out the shop manager's part in this little drama.
"Now Cadillac pays for warranty work -- we make money on it -- and we could probably have sold some of these cars an oil change or other legitimate work that they needed. And I thought, 'Why am I doing this?' "
The result was fresh ads in the Barrington Courier-Review: "We want your warranty work. Trained technicians. Free loaners."
"All of a sudden, the place started filling up," says Mancuso. In the service department, which many dealers regard at best as a necessary evil, sales climbed from an average of between $30,000 and $40,000 to between $50,000 and $60,000 a month.
The dealership slowly edged its way back to profitability. Still, like the rest of the auto industry, it suffered from recession and lingering gas-shock until 1977. Then the economy began to recover, the oil embargo receded, and pent-up demand for large cars resurfaced. Encouraged by this market, Mancuso moved. The new quarters of Mancuso Cadillac, as he renamed his dealership, were a 20,000-square-foot facility of red brick and exposed wood beams on the crest of a country road connecting Barrington with I-90, Chicago, and the world beyond.
The move proved to be a disaster. It doubled Mancuso's monthly overhead, from $50,000 to $100,000, and it meant paying the higher cost of advertising in the Chicago metropolitan market. Customers hadn't yet discovered the new location, and Cadillac couldn't supply him with the new cars he wanted. In June, its first month there, the dealership once more fell into the red, losing $30,000. In July, it lost another $20,000. Mancuso tried every trick he knew. He plugged away with original ads ("Who's the young punk on TV selling Cadillacs?") and marketing ploys (a drawing for the free use of a Caddy for a year). He even resorted to such tried-and-true techniques as overloading the showroom with salesmen. "It works," he comments, a bit regretfully. "You throw enough guys out there, everybody begins to starve, and they start finding business . . . but it's blood and guts."
None of his maneuvers, however, worked well enough: For two years his losses continued. Then, sure enough, things got worse. "Each time it got bad, I thought that that was as bad as it was ever going to be," observes Mancuso, "but there were always worse times to come."
In 1979, after his two losing years, the planned buy-back from his father began, significantly increasing Mancuso's already onerous expenses. "The figure that we'd settled on," he explains, "was $400,000 cash, but I was also paying my father a salary of more than $50,000 a year." Adding it all up, Mancuso calculated, it cost him something like $900,000 to get the business back.
A radical move, he decided, was definitely in order.
"In '79," he says, "I didn't know where this product [Cadillac] was going to go. It had its up and downs. I couldn't bank on allocations, and the United Auto Workers had targeted GM for a strike that year. I'm thinking, My God, if supply is bad now, what happens when they go out on strike?" When Mancuso learned that a Honda franchise had become available for Barrington, it seemed the answer to his anxious prayer.
American Honda Motor Co. had been in the United States since 1969, and by 1979 it had 740 dealers around the country including 21 in the Chicago area. But not one of the 23 Cadillac dealers in the metropolitan Chicago market had dared to "dual" with a Japanese import; indeed, only one handled an import of any kind. Honda, Toyota, and Datsun were more than declasse; they were an outright affront to Cadillac's image of itself as the standard of the world.
"I thought it might be a nice hedge," says Mancuso, with a sly smile. He put together an elaborate package -- dealership history, sample ads, customer testimonials, proposed media plan -- and flew off to Honda's U.S. headquarters in Moorestown, N.J. Two weeks later, the franchise was his.
