Houston's big wheel: B.E. 100s Auto Dealer of the Year.

After surviving an assortment of hard knocks, Carl Barnett Sr. and his family have Gulf Freeway Pontiac-GMC Truck on the expressway to expansion

AS CARL BARNETT SR. STROLLS THROUGH the expansive 2,500-sq.-ft. showroom of Houston's Gulf Freeway Pontiac-GMC Truck, he looks more like a well-dressed banker or high-powered lawyer than the owner of an automobile dealership.

On this day the 48-year-old native of Altheimer, Ark., has on a greenish brown, three button Giorgio Armani suit, a light pink, French cuffed monogrammed shirt with an Armani tie, and he's sporting a pair of tan, alligator skin loafers. Not bad for a man who toiled in the fields picking cotton until he was 17 years old.

As he meets and greets customers and interacts with his employees, he shows a sense of satisfaction that he's come so far. Barnett took over an abandoned car dealership and opened it as Gulf Freeway Pontiac-GMC Truck in May 1991. The previous dealership, which was losing money, went under after being in business only six months at that location.

From the moment Barnett took over, Gulf Freeway has been thriving. In 1994 Gulf Freeway had sales of more than $32 million and last year the dealership approached $39 million in sales, more than a 20% increase. And, unlike many dealerships that boost their gross revenues by going after high-volume, but low-margin fleet sales, only about 5% of Barnett's 1995 sales came from fleet business. More than 77% of his sales were retail, which is more lucrative. "He's done great in just four years," says General Motors Minority Dealer Representative Lee McDaniels. "He's the top retailer in the region, not in fleet sales but in retail sales, which is unique when compared to other minority dealers."

What else is unique is that the hard-working Barnett is now set to expand by building a Buick dealership next door to Gulf Freeway. He is also planning to purchase a dealership in Fredericksburg, Va., now managed by his 26-year-old son, Carl Jr.

Even in a booming auto-buying market, few dealerships are moving as far or as fast as Barnett's. His dealership's growth is primarily due to his dedication to doing whatever it takes to win over customers. And that's why BLACK ENTERPRISE recognizes Gulf Freeway Pontiac-GMC Truck President Carl L. Barnett as the 1996 Auto Dealer of the Year.

SUCCESS AS AN AUTO DEALER

The 5-ft.-10-in. Barnett credits his success to several factors. He says location, great customer service, fair treatment of his employees and lots of hours on the job have combined to propel him to the top of the auto industry game.

The dealership is located along the Gulf Freeway, one of Houston's busiest freeway systems with more than 120,000 vehicles traveling along this route every day. Barnett explains that, "the location is great," because in addition to the highway traffic, it is "in a heavily populated area that is also home to 15 other dealerships within a six-mile radius."

But he is clear to point out that location is not the sole reason for his success. "Also important is building that customer base. We have to do more than just sell cars. We have to service that customer and make sure they come back," says Barnett. "Customer service is No. 1 for me.

To make sure customer service is the best it can be, Barnett doesn't rely on his managers to tell him what customers need. He finds out for himself. When the dealership opens its service doors at 7 a.m., Barnett is there every day to meet and greet the customers. (Latinos comprise GO% of his customers, whites 15%, and African Americans 15%.)

Barnett confides that he doesn't always let customers know he owns the dealership. "I won't necessarily tell them I'm the dealer. I'll go out on the service drive and write service orders or go and stand with the service advisor and listen to the conversations between my employee and the customer. There are times I'll go out and sit in the customer lounge and just ask questions of customers, like I'm a customer," he says. "I don't rely on my people to tell me what's really going on. The only way I will really know is to be involved. Firsthand experience. That's the best."

Finding out what customers are thinking firsthand has made Barnett one of GM's best deal makers in the region. "I've taken two dozen of my employees to him--some of them who have had some financial problems--and he has found ways to put them in cars," says Darryl King. owner of Quality Concession Food in Houston. King, who introduced Barnett to the city when he first arrived, adds, "He goes the extra mile.

Barnett, who works 12-to-14 hour days, six or seven days a week, says another reason for his success is that he is supported by self-starters who are dedicated to excellence. "He's a strong business man who surrounds himself with good people," says Howard Jefferson, president of the Houston NAACP and a close friend of Barnett. "Those who don't work out, he'll get rid of them. He rewards the people who work hard for the dealership."

His staff has grown from 24 employees when he first opened in 1991 to 79 today. "I don't ask my people to do anything that I wouldn't do," says the hard-driving Barnett. "I expect them to work as hard as I do. If I lower that expectation, they pick that up quickly and they know that I don't expect for them to perform," says Barnett, who takes pride in the fact that he knows the names of all of his 78 employees, from porters to the managers.

While Barnett expects a lot from his workers, he says they are well paid for the jobs they do. Five of his managers make $90,000 a year and two managers made in excess of $120,000 last year. These salaries are a testimony to the efficiency and profitability of the Gulf Freeway dealership. "Barrett runs his operation more like a bank in terms of service and professionalism versus a typical auto dealership," says GM representative McDaniels. The result is better than typical profits. Not only was Barnett able to purchase his dealership outright in four years, but he says his return on sales was more than 4.6% last year. The National Automobile Association says the average profit margin is about 1.75%.

But Barnett has not always had success with his employees. He says when he first started in 1991, he hired managers to run his business, which was not a good idea.

"When I first started here, I didn't have the confidence that I could walk out and run this dealership because of the magnitude of the business," he admits. But the hired managers didn't help. He realized that, "they'd bring in their own people and run off the employees who were loyal to me. When that happens your customers begin to feel lost because they come back to the store and see all the new faces." After two years of frustration, he fired the other managers and decided to run the business himself.

And that strategy has worked well for Barnett. Unlike most dealerships, he has no general sales manager and no general manager. It's just Barnett and his front line supervisors. That move has saved him about $300,000 a year in salaries. Barnett says the only boss at Gulf Freeway Pontiac GMC Truck is Carl Barnett, Sr., and that that's the way it should be.

"I make the final decisions. I delegate responsibility and I'm accessible to my employees and my customers, but I'm the boss, and that's known around here."

THE ROAD TO AUTO DEALER

Barnett and his eight brothers and sisters grew up in the segregated town of Altheimer, Ark. His parents were sharecroppers and Carl picked cotton from the time he was eight until he was 17. During harvest season, he and his siblings missed one day of school to pick cotton, for which they were paid $3 a day. His father died while Barnett was still a young child, and his mother struggled to raise her nine children.

After graduating from high school in 1966, Barnett was given a baseball scholarship and for one semester he attended Arkansas AM&N. After dropping out, he moved to Flint, Mich., where he went to work at the GM plant as an hourly worker pouring molten steel. A few years later, Barnett moved to Detroit and worked for GM for 19 years. Over the years, he climbed the ladder from a worker pouring molten steel to a general supervisor of skilled tradesmen. At 30, he had 11 supervisors and 167 skilled tradesmen reporting to him. In 1983, while still working as a supervisor at GM, Barnett also opened a successful nightclub, the Fantasee Lounge. He ran the club until 1989.

In early 1986, Barnett, bored with his supervisory job at GM, started looking around for other opportunities. He came across a November 1986 issue of BLACK ENTERPRISE with Decatur, Gal, auto dealer Gregory Baranco on the cover. "After reading that article on Greg, l knew that was my next challenge," he remembers.

In May 1987, Barnett entered GM's year-long dealer program. He finished with flying colors in May 1988. A year later, in June 1989, Barnett took $200,000 in savings and bought a troubled dealership in Tulsa, Okla. The dealership had changed hands three times in two years and Barnett took on the challenge of reviving the place. He and GM decided to give it one year to see if the dealership could be salvaged. But despite his best efforts, a year later, in June 1990, Barnett closed the place. A poor location and lack of sales killed the dealership. GM allowed him to recoup his $200,000 investment. The automaker decided to move the dealership elsewhere and combine it with another one.

"That experience made me a better businessman," remembers Barnett. "I had a year of training, trying to make a store go that wouldn't go. It seemed the harder I worked, the worse it got. But it made me stronger. It made me want to work harder. It also taught me patience."

When the Houston dealership became available, Barnett jumped at the opportunity. He invested $300,000 of his own money to renovate the place which had been vacant and vandalized. And he hasn't looked back since.

A FAMILY AFFAIR

Instead of using outsiders, Barnett relies on something that worked for him early on--his family. Yvonne, his wife of 28 years, and Gulf Freeway customer service manager, puts things in perspective. "Our working for Carl gives him another set of eyes and ears. He can only do so much, so we make sure everything else is covered. With us, he is aware of everything that goes on in the business."

When Barnett took over the Tulsa dealership, his son, a teenager at the time, went to work for him washing cars. After nine months, Carl Jr. went to work in the service department. When he opened the Houston dealership, Carl Jr. was a car salesman for about two years and then became assistant manager for the used-car operation. In 1993, Carl Jr. entered the GM dealer program and finished a year later. He rejoined his father and went back to the used-car department, which was having some problems, and turned it around and made lots of money for the dealership.

In March 1996, Carl Jr., became manager of Regency Auto Center Buick/ Pontiac/GMC/Isuzu in Fredericksburg, Va. The month before he became manager, the dealership lost $100,000. His first month there, it made about $40,000. GM gave Carl Jr. 60 days to decide whether to buy the dealership or not. Carl Sr. says that once an audit of the place is finished, he plans to buy the dealership, which had sales last year of close to $40 million. "My father has groomed me well for this opportunity," says the second generation auto dealer. "He's pushed me to where I am today. I can handle the adversities and stresses of this business because he put me in key positions at the right time."

Barnett's 28-year-old daughter, Sonya, is the assistant manager of finance and insurance. A recent graduate of the University of Arkansas, 24-year-old Shawn Barnett, Barnett's cousin, also just went to work for Gulf Freeway. "He wants to learn the business from the ground up, so I started him off in the parts department," says Barnett Sr.

"Why do I have my family involved? It's simple. Minorities are still new at this game and we need all the support we can get. We need to watch out for each other, and who better to do it than family members? This is a tough, tough business."

OPEN FOR MORE CHALLENGES

Barnett is now concentrating on expanding in Houston and other major cities. He just bought five acres of land adjacent to Gulf Freeway for $600,000 to open the new Buick dealership. He also plans to break ground in a few months on a new showroom for his Pontiac-GMC Trucks. And the purchase of a Virginia dealership for his son as well as other dealership possibilities are being looked into.

"The next big challenge for me is running several dealerships and running them successfully. I now have all of the skills and people in place to do that."