Selling into the stratosphere: B.E. auto dealer of the year.

GROWING UP ON A FARM IN GREENVILLE, KENTUCKY, taught Cornelius Martin that hard work pays. When he was 14 years old, his father made a deal with him and one of his brothers: grow and sell the family's tobacco crop and they could use the money to buy a car. They did and later bought a 1957 Ford, which they tinkered with, drove for miles and finally wrecked a year later. But the beauty, speed and complexity of automobiles intrigued Martin for years to come. It became a fascination that would spawn an enterprise.

Today, Martin, who owns an Oldsmobile/Cadillac, Dodge/Jeep/Eagle, Chevrolet/Geo and four Saturn dealerships, has many more cars to chose from. Operating seven stores in four states requires quick and easy access, a difficult task with at least four-hour drives between each store. But the two pilots who command Martin's seven-seater Beechjet 400 can transport him between offices within an hour. From his two-story office complex and headquarters in Bowling Green, Kentucky, Martin has built an organization made of more than just cars. Nestled under the watchful eye of Martin Management Group are also lucrative insurance, real estate and aviation concerns.

By "taking care of the customer's needs," Martin has position himself as a major player in the automotive sales industry. His stellar performance has General Motors and Saturn tapping him for advice. "He is a good example of what automakers mean when they speak about partnerships with their retailers," says Greg Martin, Saturn spokesperson for sales, service and marketing. "As one of our top performers in sales and customer satisfaction, he works closely with us to identify the best practices."

It is this business acumen and foresight that has garnered Cornelius A. Martin, president and CEO of Martin Automotive Group, the distinction of being the Black Enterprise 1997 Auto Dealer of the Year.

THE CALL OF THE WILD

"I have always liked speed and fast toys," admits Martin, who twice a week, clad in a leather jacket and motorcycle boots, takes to his Harley-Davidson "Fat Boy" for casual 100-mile rides. But the 48-year-old is not all play; in fact, he'll be the first to tell you he is a risk-taker. "I like to try different things and enjoy pushing the envelope further," he says. Although he often throws caution to the wind after hours, seldom will he proceed without caution in business.

Since 1985, Martin has built a virtual federation of dealerships, which include Martin Oldsmobile/Cadillac (acquired in 1985) and Martin Dodge/Jeep/Eagle (1990) in Bowling Green; Saturn of Dayton North (1991) and Saturn of Dayton South (1996) in Ohio; Saturn of Charleston-Huntington (1994) in Hurricane, West Virginia; Saturn of Des Moines (1995) in Iowa; and Thoroughbred Chevrolet/Geo (1996) in Lexington, Kentucky.

Having sold some 8,000 cars and trucks last year (68% single car safes, 30% trucks and 2% fleet sales), Martin Automotive Group raked in $114 million in sales, with Saturns accounting for $65 million of that bankroll. This was nearly a 40% increase over 1995 revenues of $80 million--a boost mostly credited by the acquisition of the Saturn store in Des Moines and the Chevrolet/Geo dealership in Lexington. Since acquiring his first franchise in 1985, sales in every one of his dealerships have shown an average increase of 8%-10% per year. With that track record, and the potential for future acquisitions, Martin projects 1997 sales to top $150 million.

Contributing to this success is Martin's astute knowledge of the automobile business. Unlike many car dealers today, Martin doesn't just depend on showroom salesmanship. He's gotten oil under his fingernails. "When I was younger, I planned to own a garage or repair facility.

As a black person, I thought that I would never be able to own a dealership," he recalls. With that in mind, Martin attended West Kentucky State Vocational School in 1969, where he learned auto maintenance and management. A year later, he worked as an auto technician while majoring in business at Wright State University in Dayton. After a year in college, Martin left to work full-time.

Today, having done everything from wash to repair to sell cars, Martin applies the same diligence that built his career to fashion his business. He says many dealerships fail because their owners get "dealeritis," and venture head-on into a dealership with out doing their homework. With a combination of market research and forecasts, demographic studies and sheer instinct, Martin keenly assesses the viability of a dealership. His strategy has helped his dealerships stay afloat and alerts him when there is a lull in auto sales. While many minority dealers have difficulty establishing successful stores, Martin's system has worked well for him from the very beginning.

RISING THROUGH THE RANKS

In 1978, with his reputation as a technician known throughout Dayton, Martin was recruited by Bob Shannon, of the former Dayton Shannon Buick Co. Then 29, Martin agreed to come on board only if Shannon would help him acquire a dealership. "Back then, you just didn't go and set up your own franchise, especially as a minority. You needed someone who could take you under their wing and sponsor you." Under Shannon, Martin worked his way up from shop foreman to sales representative. Shannon, who is white, had been in business since 1949 and was well respected in the industry and the community. "He introduced me to the right people. If it was not for him, I would not have been where I am today," recalls Martin.

In 1982, Martin entered the grueling, two-year General Motors Minority Academy Dealer Program. He alternated months between GM's campus in Flint, Michigan, and Shannon's dealership, studying the machinations of the business. Despite Shannon's admiration of Martin, the eventual resentment from other sales reps who also wanted their own dealership became stifling. "There was a time when the animosity was so great that I had tears in my eyes. I almost felt as though they hated me," says Martin.

This was not the first time Shannon had shown an interest in helping African Americans. He also provided the mentoring nudge for former BE 100s Auto Dealer Robert Ross, president of Bob Ross Buick, Mercedes, GMC Inc. of Centerville, Ohio.

Instead of taking credit for Martin's start, Shannon, who retired in 1985, speaks highly of his work ethic instead. "Cornelius came with a plan. He wanted to work three years each as a foreman, a sales rep and then sales manager and then own his own dealership," he says. "He was an excellent employee, who was honest and never oversold the customer. I was really sorry to lose him."

A PROSPECTIVE BUYER

After graduation, Martin scoured the country for a store. He looked at dealerships in Poughkeepsie, New York, Philadelphia and St. Louis. Studying five-year growth trends of each city, Martin was impressed with Bowling Green, Kentucky. "It looked the best, its unemployment was low and it was one of the fastest growing areas in the state," says Martin who could have tried to enter a large metro market. "Most prospective dealers want to be in big markets, but the way I see it is that if you're not making any money, it doesn't matter where you are."

It also didn't hurt that the home of the Chevy Corvette was also the only "wet" city for miles, where alcohol can be bought legally. Over the weekends, Bowling Green/Warren County, which boasts a population of 100,000, becomes a haven for visitors from Louisville to Nashville, who frequent its restaurants, hotels, supermarkets and malls. It also meant a constant stream of potential customers.

In April 1985, Martin began structuring the purchase of a Bowling Green Oldsmobile/Cadillac dealership. The store had weak sales and Martin saw the potential to polish a diamond in the rough. With his life savings of $60,000 plus $650,000 in financing from General Motors and local banks, the doors to Martin Olds/Cadillac opened that September. His years in the business, particularly the seven he spent working at Dayton Shannon, taught him plenty. With renovations and an infusion of enthusiasm, Martin woke up the "sleepy" dealership. He extended business hours to 9 p.m. and began an aggressive marketing campaign, which included spending $15,000 a month in newspaper and television advertisements.

"It was a good year for me and my family," says Martin who, with his wife, Gail, has three children, Amber, 14, Chadwick, 12, and Coleman, 9. The car maker was selling a million cars a year and Martin's revenues topped $14 million with $350,000 in profits. Yet, the road was scattered with obstacles. "Many people had doubts as to whether an African American could make it this community with a black population of less than 10%." Even GM, backed by its own research, was doubtful of his prospects, especially with no other minority businesses catering to Bowling Green's most white community. "Many dealers said would fail, but knew the business better than many of them," adds Martin. Last year, Martin, who says he "has competitors, but no competition," secured 27% of total auto sales for all dealerships in the area, making him the market leader in Bowling Green for the eighth year in a row.

Prompted by the success of the Olds/Cadillac dealership, Martin looked to penetrate the import market. In 1987, he was awarded an Isuzu/Subaru dealership. But when the market for the cars dried up, he sold the franchises to a local Pontiac dealer for $250,000. But that didn't stop his desire to own more franchises. Martin was establishing himself as a "dealer's dealer." High customer service ratings were his trademark and he continued to draw national attention and respect among the nation's auto dealers.

But for a man who says he gets "bored easily," Martin was compelled to go to another level in order to create more business opportunities.

And 1990 proved to be a banner year. Martin acquired a Dodge Car, Truck and Van franchise. He soon formed the Martin Automotive Group, intending to expand his reach in the automotive business as well as stand as the parent of any other business ventures. Wasting no time, he bought a Jeep-Eagle dealership in form Martin Dodge Jeep Eagle.

Looking for a new challenge, Martin heard the rumble throughout the industry about Saturn, a car that would be born out of the rural hamlet of Spring Hill, Tennessee. This General Motors progeny, with its straightforward, no-hassle/no-haggle policy and customer service focus, was threatening to revolutionize the way cars would be sold and serviced. But the stakes were high and Saturn was very selective about who sold their cars. "They required retailers to have $8 million to start and multiple dealerships. I didn't have that kind of money, but I had my reputation. I thought, `If I could just get them to meet me, I could convince them that I could run a franchise.'"

Even dealers who could shell out the $8 million had to have high sales performance and the reputation to back it up. In 1991, Martin finally got his audience and they were impressed. Refusing to relegate himself to Bowling Green, he looked to return to the city where he first made his mark--Dayton. It was there in September of 1991, that Martin opened the doors to his first Saturn franchise.

With a quarter of a million dollars of his own money and another $3 million in private capital, Saturn Dayton North was launched. The franchise pulled in over $21 million in 1992, doing a 6% return on sales in an industry where the norm is 2%; within a year, Martin had paid off the loan. Located on 2.5 acres of land, the dealership is Martin's smallest in size, but its most profitable. By keeping his service department open until midnight, and plying the Saturn philosophy of "doing whatever the customer wants," business was brisk.

Last year, the store was ranked the sixth most profitable dealership in the nation--trailing behind much large retailers in Saturn's lucrative Florida and Nevada markets. It was also one of only 10 dealerships in the country to receive the Good Housekeeping and Automotive News Automotive Dealership Service Excellence Award.

"I think the thing that most impressed Saturn was the fact that I am open for change and always seek new and better ways of doing business," says Martin, whose business foresight has not gone unnoticed. Handling a diversity of dealerships has made him a person most automakers want to hear from. He is often tapped to sit on marketing committees and teams at Oldsmobile and Saturn, contributing to improvements in sales, customer delivery and other business practices.

For example, Oldsmobile dealers now have delivery stations where, like in the Saturn commercials, customers are formally delivered their cars. It was an idea that with a select group of dealers, Martin helped to develop. Operational changes such as these can cost millions, therefore car manufacturers want someone they can trust providing feedback. "We don't need yes people. We do a lot of research and Martin is a person we know will ask questions and push us beyond the logic of the research," says Chuck Golden, retails standards coordinator at Oldsmobile in Lansing, Michigan, who has worked with Martin for three years. "Also, when new ideas are developed, he is one of the first retailers to implement them."

Where other minority auto dealers may have had problems securing financing and lines of credit to buy their cars, Martin had bankers more than interested in doing business with him. With such backing, Martin began branching out. In 1994, he built Saturn of Charleston-Huntington, which is run by his nephew. Another nephew works at the Saturn of Des Moines, which has received just as high acclaim as his other stores. Last December, Martin sought to expand his reach in Dayton and opened Dayton Saturn North. A huge expanse on 4.5 acres of land, the parking lot, dotted with Saturns, resembles that of a small shopping mall.

Due to the generally small facilities of most dealerships, few Saturn retailers can provide body work and paint jobs directly and contract the work out to authorized third parties. Seeking a way to avoid the overhead associated with paying someone else, Martin opened the first and only stand-alone, state-of-the-art Saturn Body Repair and Paint Shop in the country, less than a mile from his Saturn Dayton North store.

The key to future growth, says Martin, is Saturn's continued appeal which will only be enhanced after the 1998 introduction of a new, larger vehicle to be built in Wilmington, Delaware. In addition, its trademark premium service and "relationship marketing" where customers are sent surveys and even birthday cards, will also help to keep them third on the J.D. Powers and Associates annual customer satisfaction survey. It only lagged behind Lexus and Infiniti.

Probably not so unique is that many heavy-hitting auto dealers cover the territory of their dealerships by plane. Any business venture Martin considers is not limited by its proximity. "So many people feel that they need to have their store in the city where they were born and raised. With today's technology, running a store in Des Moines or Texas is like running one next door," says Martin. Never allowing a distant location to limit him, in 1985, he purchased a Cessna 182 aircraft, which is now being used by Ron Tardiff, the vice president and CFO.

"It's hard for people to understand, but the airplane is not a luxury, but a tool, like a computer or calculator," notes Martin of his $6 million Beechjet 400. He sometimes hits two or three cities a day in a matter of hours. Having outgrown the range and seating capacity of his current plane, Martin has an option on a $8 million Learjet 45 that seats nine and can get him from Bowling Green to the West Coast without a fuel stop.

MARTIN MANAGEMENT GROUP

Martin's penchant for change and diversity is not only reflected in his choice of car franchises but also in the founding of Martin Management Group, the umbrella linking all his business concerns.

The $4 million management company includes: Martin Automotive Group; The Corporate Center at Hartland which leases office space to Trans Financial Bank and Fruit of the Loom; Co-Mar Inc. and Co-Mar Inc. of Dayton Inc., the aviation companies; Martin Land Development and Martin Automotive Group Insurance Agency Inc. The relationship of all these companies is synergistic, keeping money flowing back to its chief executive. The Martin Land Development develops the land that is leased to Martin Automotive Group for its dealerships. Martin Automotive Group Insurance Agency Inc. covers 80% of the dealerships' extended service warranties. The Corporate Center at Hartland is the headquarters for Martin Management Group, to which all five companies pay a management fee.

Martin, like most smart business people, surrounds himself with the right people. Many of his 266 employees have salaries that are 10%-20% above the norm, according to Martin. To manage the dealings of Martin's other business ventures, he recently hired Tommy Dennard as vice president of support operations. Dennard, who was a vice president and regional CFO at Sara Lee, brought the experience of managing multiple companies, skills Martin needed with the company's anticipated growth.

Also by his side is Bruce Browning, vice president of used vehicle operations. "Unlike other dealers, [Martin] will take his time, money and effort to develop his people rather than look elsewhere for someone already qualified," says Browning who has worked for Martin since Day 1 and climbed up through the ranks from a sales consultant. "He can sell people on his vision and get buy in. We have a very low turnover rate because of this and some employees, who have left for what they thought were better opportunities, have returned," he adds.

Currently, Martin is considering two new business ventures outside of the automobile industry that he plans to have in place by the end of the year.

For all his fortune, he is also willing to share the wealth. He contributes some $100,000 annually to institutions of higher education, such as Western Kentucky University where he serves on the Board of Regents, Wilberforce University, his wife's alma mater, the University of Dayton, Wright State University and others. Another $100,000 is donated to other nonprofit organizations and scholarship funds.

Looking back over the past 12 years, Martin recognizes that the relationships he's built, combined with his management skills and perseverance, have helped him avoid many of the potholes in the industry and build a thriving operation. Overflowing with the confidence of his success, he says, "It's been a great ride."