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Herb Chambers loves being king of cars

12:26 AM EDT on Saturday, May 5, 2007

By Peter C.T. Elsworth

Journal Staff Writer

Inside Herb Chambers’ new Lexus dealership in Sharon, Mass., set to open in six weeks.

The Providence Journal / Steve Szydlowski Steve Szydlowski

Herb Chambers is on the move.

But then it’s hard to imagine New England’s top auto dealer sitting still for very long. Chambers is a whirlwind of enthusiasm, his open charm tempering marketing savvy, an eye for good deals and the moxie to make them.

His business modus operandi seems to be more opportunistic than planned out. But that just applies to his deal making, which has resulted in the Herb Chambers Group acquiring 38 dealerships in Southern New England in just over 20 years. He said he would be acquiring more dealerships in the next 12 to 15 months.

When it comes to running his business, nothing is more thought out. Chambers strongly believes in a corporate culture that is service oriented, and he sees attracting good employees and keeping them happy as the key to the success of his companies.

His most recent acquisitions — just this month — reflect the catholic range of marques under his umbrella: one is a Dodge-Jeep dealership while the other sells a range of exotics, including Audi, Bentley, BMW, Mercedes-Benz, Porsche and Rolls-Royce.

And he is building a new Cadillac dealership on Route 2 in West Warwick — construction due to start this summer and last about a year — and is about to open the doors of a $30-million Lexus dealership in Sharon, Mass. No expense has been spared on the 110,000-square-foot Xanadu of that dealership, which he calls “the craziest thing I’ve ever done.”

“It’s been one step at a time, there was no plan of having a company like we have,” Chambers said last week at his Cadillac dealership in Providence. “We bought two more (dealerships) in the last 30 days. The guys here call me a deal junkie.”

The bottom line — his company will report $1.8 billion in sales this year — speaks for Chambers’ business acumen and ability to inspire his workforce.

“You can’t have a happy customer without happy employees,” he added. “How do you get people to perform and stay? There’s never enough money. If you’re great, why work for me? People have to feel appreciated. I try to develop a culture within the company.”

“I’ve been very fortunate in attracting great people. I’m not an expert in the automobile business, but I do consider myself an expert in the people business,” he said. “I hire people with auto experience, but I hire for attitude. I want people with big smiles, outgoing personalities, good eye contact, (people who are) sincere. We can teach a skill.”

Chambers, who lives in Boston and Old Lyme, Conn., was born and raised in Dorchester, Mass., and joined the Navy after high school. “I was in the Navy for four years, and I loved it,” he said. “I almost stayed.”

After his discharge, Chambers’ first career was in copying machines. He worked for American Photocopy Equipment Company in Cambridge and in 1965, with $1,000 from his mother, he started his own company in Hartford. “I started (A-Copy America) when I was 22, knocking on doors, selling supplies for copying machines,” he said. He said the company became the largest independent distributor of office equipment in the U.S. before he sold it to Alco Standard in 1983 and joined their mergers and acquisitions department. He got started in the automobile business “by accident in 1984 or 1985” when he went to a dealership in New London to buy a Cadillac Eldorado. At the time, the long hours and nights away from home working for Alco were getting to him. Besides, he missed running his own company.

“I was looking for a little business of my own and I’ve always been a car nut,” he said. Indeed, he currently has a collection of about 15 exotics, including a rare McLaren F1, one of the fastest road cars ever built.

Looking around, he said he quickly realized the dealership was for sale. The sales force was listless and “the place was dirty, the windows dusty, weeds outside, it looked like hell,” he said, adding, “When a business is for sale, it might not say it’s for sale.”

The owner returned from lunch and did not initially want to sell. Chambers asked him what he wanted to do,

“He said play golf, but said there’s never enough time to play golf. I said: ‘Tell you what, I’ll buy the dealership and you can play golf.’ ”

They discussed the price, Chambers looked over the company’s financial statement, which revealed it was in the red, and “we got out pen and paper and 45 minutes later we had a bill of sale.”

“As it turned out it was not so simple, as GM insisted I get a partner because I did not have any experience in the automobile business,” Chambers said. He brought in an old colleague from his days in the copying business to run the business.

“I bought him out two years later, and he was a very good partner,” he said. “I’ve had some general managers who have not been good, and if he had not been good it might have soured me to the business.”

The comment is typical of Chambers, who is very quick to deflect attention away from his own skills and ply appreciation onto his partners and employees.

“I’m one of the most fortunate people I’ve ever met,” he said, spreading out his arms, his charming egotism overcoming his logic. “I’ve never had an original idea in my life, but I can recognize other people’s good ones. I learn from everyone I’ve ever met.”

After New London, he started expanding, starting with a Hyundai dealership in Hartford. “We could not get them fast enough,” he said referring to the early Hyundais.

He went on to buy further dealerships, and now has 38 in Southern New England covering a very wide range of marques, including all the domestic brands (“I’m very bullish on domestics,”) as well as Audi, Bentley, BMW, Honda, Hyundai, Infiniti, Mercedes-Benz, Mini, Porsche, Rolls-Royce, Saab, Scion, Toyota and Vespa scooters.

“What’s the significance (of having so many different brands)?” he asked rhetorically. “Market penetration. I want to have whatever people want. It’s like Howard Johnson had 28 flavors. If someone wants to upgrade to a Cadillac from a Honda, it helps if they have bought the Honda from us and had a good experience.”

To ensure that good experience, Chambers closely cultivates his employees. Every month, he meets with his entire sales force — some 400 strong — in Randolph, Mass., from 7 to 9 a.m. for a general meeting to discuss everything from sales goals to sales tips. Once a year, he hosts a black-tie affair for his sales team where awards are given out, including big money awards for sales masters — staff who have hit sales targets combined with good customer satisfaction reports.

Three years of ranking as a sales master results in the most coveted award of all: the Herb Chambers ring, a Super Bowl-sized beauty with the letters HC inscribed on it. Chambers wears one himself.

“This is the Herb Chambers ring,” said Lawrence Skinner, general manager of Chambers’ Cadillac dealership, showing his own. He turned it round his finger. “This is what people want, more than the money.”

Top general mangers are awarded $20,000 gold Rolex watches, and again the award is given not just for the level of sales but also for good customer satisfaction and low turnover.

At the same time, many of the functions are purely social events, with the emphasis on having a good time, ranging from trips to Bermuda to dinner dances on his yacht (Excellence III, a 188-foot motor yacht; Excellence IV, a 257-footer that will have a crew of 22, is currently being built in Germany) and other venues.

Chambers wants to know his employees and their families, and much of the emphasis on socializing is a chance to impart what he calls the Chambers philosophy.

“I get to know all the wives and husbands and significant others on a first-name basis,” he said. “How important is that? I think it’s really important.”

Apart from his car collection and his yachts, Chambers, who is divorced and has a 40-year-old son and a niece who runs one of his BMW dealerships, has his own company jet and helicopter. It was in the latter that he showed off his new Lexus dealership in Sharon that is scheduled to open around July 1. He claims it will be “the best dealership in world for about six months – when someone will build a better one.”

He said got the idea of pulling design elements from other Lexus dealerships following a dinner celebrating the opening of a wing at UMass Memorial Health Center in Worcester. He was impressed with the design and was told it incorporated elements from various other hospitals.

A week later, he was on the company plane with an architect, photographer and assistant visiting top Lexus dealerships in Atlanta, Las Vegas, South Carolina and Texas in one day. “We (started) from Boston early, early, early, and (arrived) back that night late, late, late,” he said. “I wanted the best of the best of the best.”

He joked that the dealership is so big, someone suggested he could build the cars as well as sell them. The showroom, which is capable of holding 40 cars, has 50-foot windows, including a $500,000 skylight. Behind are 50 service bays immaculately laid out in a light, spacious hall. “It’s the United Auto model on steroids,” he said. He expects to have a sales staff of about 50 with an additional 50 to 60 in the service department. “There are four or five lunchrooms,” he said. Upstairs, the customer waiting area is equipped with a complimentary coffee and food bar, flat-screen TVs, a fireplace and children’s play area. The bathrooms look like they belong in a luxury hotel and even the staircase is extra wide.

“Space, space. Space is luxury,” he said passing through the half-finished rooms and pointing at this and that. He said his current Lexus dealership up the road – which he has sold – sells about 400 cars a month. “We’re going to have to sell 600 here on a pretty regular basis,” he said.

“See those doors,” he said, pointing enthusiastically at the service bay doors. “I wish you could see them work. They go up and down in seconds. I saw them in Germany.”

The casino-like entrance features a vast canopy leading out to a rounded space that is currently empty. “I want to put a waterfall in there,” Chambers said. “And keep it running through the winter by running antifreeze in it. My architect says I’m crazy.”

Returning to Providence in the helicopter, Chambers outlines his business philosophy. “No one wants to be taken advantage of,” he said. “But they do want to be taken care of, and that (service) costs money.”

But he said people are willing to pay for service so long as they feel it is not being sold to them.

“If someone asks you, ‘Where did you get that?’ ” he said, referring to a watch, “And you say, ‘Somebody sold it to me,’ it means you don’t like it, that maybe you were taken advantage of. But if you say, ‘Oh, I bought it over there,’ it means the opposite, you made the decision to buy it.”

“So, I don’t want my sales people to sell cars; I want them to help people buy cars.”