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A conversation with Tom Barros: it started with Toyota and the 'town' has kept growing from there.

Tom Barros has been able to expand his car dealership company and grow while many of his contemporaries in the industry are selling out.

Barros arrived in Wenatchee in 1980, working for Don Reichert at Reichert Nissan. A few years later, he' and Reichert bought the Toyota dealership from Max May. In 2002, Barros bought out Reichert and moved Town Toyota to East Wenatchee.

Now known as Town Auto Group, Barros has added five more car dealerships to his holdings including Scion, Ford, Chrysler Dodge, Lincoln Mercury and, most recently, Nissan.

He also purchased the naming rights to Wenatchee's new events arena, now known as Town Toyota Center.

His expansion plans have been noted by the community. Barros was named Business Person of the Year by the readers of the Wenatchee Business Journal in the 19th Annual Readers' Choice Awards. He tied for the honor with Linda Haglund, who, as it turns out, sold him the naming rights to the events center.

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When the Wenatchee Business Journal sat down with Barros, he said he attributes his success to the people who work with and for him. He also said it helps to know his limits.

We, of course, wanted to know more. Here is some of what he had to say:

WBJ: How did you get into the car business?

Tom Barros: When I graduated from college and even before that, at the time I was going to college, I got a part time job selling cars.

I'm going back to the early 1960s in New Jersey. Once I graduated, I moved to Los Angeles, for the weather. I started selling Fords as a salesman, then moved up as assistant sales manager, sales manager, general sales manager.

I got transferred to Tucson, Ariz., with the group I was with.

I was there three years as general manager with the son and nephew of the owner. We became partners in a Lincoln Mercury store in Spokane. That's what brought me to the state of Washington.

I was there six years and then the gas crunch of 1979-1980 hit. The sales of Lincolns and Mercurys disappeared, so I sold out to my partners and they sold out six or seven months later.

I came to Wenatchee as general manager of Don Reichert's Nissan store in 1980.

I was general manager for six or seven years, until the Toyota franchise was for sale. I negotiated with Max May and made arrangements to purchase the franchise. At that time, Don and myself became partners in Toyota.

We opened where Community Glass is right now. We moved it to 802 Wenatchee Ave. in March 1987.

When the lease was up in 2001, there was a choice to buy the property or look for another one. I negotiated for this section in East Wenatchee and bought out Don Riechert.

We opened up Jan. 1, 2002, here in East Wenatchee.

WBJ: Was it a good move?

Barros: Toyota is a fantastic franchise. We just about tripled business here.

Mind you, I can't do any of that alone. I have very loyal, very good people. That is my main concern, to take care of people. Our employees take very good care of the customer.

WBJ: How did you come to acquire the other dealerships?

Barros: In 2005, I got a call to see if I had any interest in the Lincoln Mercury store.

Having been an old Lincoln Mercury dealer I still had a place in my heart for it. So, we bought that franchise.

The location wasn't the greatest, but we did OK with the dealership.

In 2007, I got another phone call to see if I had any interest in the Ford franchise. I did, and we took it on. We did very well with it in the second part of 2007. That brings us to 2008.

2008 has been pretty busy. First thing we did was merge the Lincoln Mercury with the Ford store. Then I had some interest in buying the property next to Toyota that was owned by Lithia (Chrysler Dodge). They informed me that to buy the property, I had to buy the dealership, which I did.

I'm happy I did. Pretty nice people there.

I felt that the big increase in that

* dealership would be the service department. We had tried to get a truck worked on and I was told we would have to wait two weeks. So, I felt there was an opportunity*to be able to service customers better.

Well, we took on Chrysler Dodge in October. At the same time we were also negotiating the sale of the Nissan store. Well, that came to be final Dec. 16.

I was quite familiar with it from before being the executive manager there. And, my manger from the Ford store, Pat Armstrong, had worked there. He's right now running the two of them. He's a fantastic people person and a great trainer. That's where we are now.

WBJ: When you moved to East Wenatchee in 2002, did you have aspirations for more dealerships?

Barros: Not at all. In fact, my daughter had joined me as controller and my nephew as general manger, fantastic people.

I was thinking of retiring and letting them take over the operation, but somehow, that just didn't happen.

All these acquisitions, I see them as a chance to do better than the predecessor.

WBJ: In 2007, you said that it would be nice to group the dealerships, maybe move Ford across the street next to Costco. Is that still the plan?

Barros: In January 2007, I purchased the property next to Costco, with the thoughts of bringing Ford here. That property is a little over 3 acres.

When I look at the Ford service center I see a lot of big trucks, and that space turned out to not be sufficient for the dealership.

So, the purchase of the other property next to Toyota, the 4-and-a-half acres, is more appropriate for the Ford dealership. If things go as planned, it would be nice to move the Nissan store across the street to keep most of the operations right here.

WBJ: Did you buy the properties when you bought the dealerships?

Barros: Chrysler is a lease, Ford is a lease. I bought the property with Nissan and part of the property when I purchased the Lincoln Mercury dealership.

WBJ: Did you have all this in mind when you moved to Wenatchee?

Barros: I had known Don Riechert. He owned the Lincoln Mercury store here many years ago and I met him when I owned the dealership in Spokane. When I came to town, Don told me I could buy him out in five years.

When I saw that wasn't going to happen and the Toyota store became available, that was the reason I purchased Toyota.

WBJ: Several of the deals started with phone calls. With Nissan is that what happened also?

Barros: No, I felt it would be a good franchise to have and that we could do better and serve customers better. We did the purchase through an attorney and broker. It worked out well to do it that way.

We've made a complete change in the management team there. Lots of training, working toward a better attitude. It's too early to tell really, but I think we will do very well there.

WBJ: What's going on with the oil changes?

Barros: Boy that's a sore subject. I tried to take over all the customers with the lifetime oil changes. But somehow, we just couldn't agree on it. The offer I made was denied. We sent out a letter explaining to the customers what was happening and I think the response Reichert got from that is why we've now reopened negotiations.

I wish I could tell you at this point that we are going to take them over, but we are still trying to manage the change for that. All I can say is that we are working on it and we are negotiating again on that point.

WBJ: We've talked before about market saturation of cars. When you bought Ford in 2007, you said the number of Fords driven in the Valley was higher than the amount sold here. Has that changed?

Barros: Within the industry we call it pump-ins and pump-outs. Pump-ins are the ones local people are buying someplace else. Pumpouts are the ones we sell to Seattle people, for example. The situation has changed completely in the last year. We have very few pump ins now from local people buying outside. Our service department has doubled business from where it was. People make the difference.

WBJ: So what happens when you go into buying mode? What does it take to absorb and be successful in those mergers?

Barros: The key is to grow as you are able and have the right people. You have to have the right people to take over those places.

WBJ: How long does it take to get things straightened out and running smoothly?

Barros: Chrysler was very quick. It took us around 60 days. The negotiations went pretty quick, a couple weeks to agree on all the points. Then it's up to the manufacturer and that takes a little longer.

They check your background and make sure the financing is there and backing is there. Then you have to go through the department of licensing to make sure everything is copacetic.

Then you have computers, personnel and papers that go along with that all.

Chrysler Dodge and Ford are all working well and we are working on Nissan.

WBJ: What kind of lessons have you learned in the past seven years?

Barros: This may sound corny. The facility here is a great facility and we have excellent products, but the personnel really make this place tick. I don't want to downplay the other improvements, though.

In Wenatchee we had something like an acre and a quarter. Here we're on more than 6 and we are beside Costco.

Before our customers had to park anywhere they could find space. Here they are able to pull right up front. Space makes a big difference. We can carry a larger inventory and that in itself helps sell cars.

It all has to come together, though, the location, product, service and employees. If those parts don't work together, the business can have problems.

WBJ: How do you interact with the manufacturers?

Barros: With all the manufacturers you get to choose the stock you want. There is a travel rate charge.

How they do it is amazing. If you are selling 50 cars they are going to replace 50 cars. If you are selling 200 cars they are going to replace at that same rate.

Some manufacturers would like you to take more of a certain type of vehicle because they overproduced and they need to move it, but you still control the amount of cars you have on the ground.

WBJ: In 2005, the Big Three came out with employee pricing and expanded warranties to try and match the foreigns because they had a large stock to wade through. Has the pressure from manufacturers changed over the last three years?

Barros: In all the news you will see, there are many plant closures with the Big Three, mainly because they were overproducing and not selling. Now what has happened is that they are closing plants and selling on the line what is being produced. Our inventories are proper.

WBJ: With Ford, for example, you saw prices of around $40,000 for a midline truck. Now, for that same style truck it's around $23,000. Does that pricing come from that manufacturer?

Barros: I believe a lot of that product was overpriced to begin with. You hoped to get that, but then when you're not getting that, you have to adjust your prices and find a new balance.

Now, this is the best time to buy an auto. Prices are comparatively the lowest they've ever been. Financing is there, cars are there. But, people's confidence is not what it was.

WBJ: How does the market in Wenatchee compare to the national market these days?

Barros: We are insulated compared to the Californias and Floridas. We are feeling it, though. It took some time.

Seattle started feeling it a year ago. Now we are feeling it. We are off a good 15 to 20 percent from a year ago. Our sales are down, but our penetration of the market is higher. How long this will take? I wish we had a crystal ball. But I do think that by the end of 2009, we should start to see a swing back toward growth.

WBJ: What are your plans for the future?

Barros: Ideally, I'd like to have the Nissan store across the street and Ford next door. In fact, yesterday I met with three architects and today I'm meeting with a builder to see if we can see how to proceed.

We are gathering all the information and costs to make a sound decision to lay out a timeline whether that should happen right away or a year to two years from now.

I've got young management. They will be taking over. Retirement was planned a year ago. I will always be involved, though. I hope to be able to back off here in a year or so.

WBJ: How did timing impact your decisions to buy the other dealerships?

Barros: The perception and reality of a slowing economy gave us these opportunities. We felt that the prices for the dealerships were right and all of that. And that we could do better. It was the right time to do it.

As far as building next door, we are trying to see if this is the right time to do it and not rush into anything.

WBJ: What would happen to the properties in Wenatchee if and when you move?

Barros: One thing I will tell you is the Ford property will remain there. At this point I don't know which brand will be there, but that facility will remain.

As far as building, starting today it would be 18 months for the Ford store to be complete. As for Nissan if everything goes to plan, it would be two to three years. It's future planning. It won't happen overnight.

WBJ: What's the price tag for the last seven years?

Barros: Boy, several million.

WBJ: Besides buying up a couple auto dealerships you also secured the naming rights to the Town Toyota Center. Why? Besides the VIP box, of course.

Barros: I didn't pay much attention to the VIP box actually. But, right now employees and customers are taking advantage of it.

I was approached about the naming rights by Mayor Dennis Johnson and Linda Haglund. They came over and I felt it was a privilege to have the naming rights. I think I decided in something like 15 minutes. I agreed to it and that is where we are.

I hope the community will back that facility,. I think it's a fantastic place.

WBJ: Was there a specific reason to name it Town Toyota Center, instead of the Town Auto Group Center?

Barros: The company's legal name is Town Auto Group. A few years back, for whatever reason, Toyota wanted Toyota removed from the legal names of the company. Now with the other dealerships, I'm thinking of changing the legal name for all the companies to something like Town's Motor Inc., or something. That way whatever we promote, we can do it together.

All the dealerships are separate operations. They are controlled from here, but they are all individual corporations.

WBJ: Town Toyota is the flagship. Is that why the name went on the center?

Barros: Yes.

WBJ: Do you see many similarities to the gas crunch in the late 1970s to what happened this last summer?

Barros: No, I don't see it. At one time we couldn't get the gas. This time we had to pay a lot more, but we had it. Really, though, it's low priced gas compared to the rest of the world. At least we have the gas.

WBJ: When you started out did you ever envision selling foreign cars or that they would become so popular?

Barros: At that time I made a decision to go to the foreign because the quality was there and the operations were profitable. Now, we are seeing a change where the domestics are on par with the foreigns. It's a different ball game again.

Ford, GM and Chrysler have gotten better. It had to get better. Hopefully, it's not too late.

WBJ: Anything else to add?

Barros: My parting words will be that we have no intention of taking on any other dealerships in the area. We really have our hands full right now. I don't have any more people to place anywhere.

WBJ: It's not a money issue?

Barros: It's a people issue.

WBJ: So, even if you got another phone call?

Barros: No. I don't know where I would get the people from.

THE PROFILE

Tom Barros

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Age: 61

Hometown: Lima, Peru

First car sold: Lincoln Mercury

Education: Bachelor's degree in business, a master's degree in business management.

Number of car dealerships currently owned: 6--Toyota, Scion, Ford, Chrysler-Dodge, Lincoln Mercury, Nissan.
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Author:Bentley, Ryan
Publication:Wenatchee Business Journal
Article Type:Interview
Date:Feb 1, 2009
Words:2898
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