“We were young people from working class families in Detroit,” Halle says. “Neither one of us had any money. When I got out of the Marine Corps, we had between $700 and $800. That’s what we had. Two years later, in the fall, I put $5,000 down and bought a house in Belleville, Michigan. So, we bought a new house after two years and we’re still in college.” Still, Halle wasn’t satisfied with selling cars. The pay was good, even great, but he didn’t see a lifetime career for himself as a car salesman. When he graduated in the spring of 1956, Halle sought a career path more fitting for a man of his new stature. One night, at a drive-in movie theater with Gerry and Bruce Jr., Halle went to the snack bar at intermission and ran into an old college friend.
Halle had met Earl Burt when he enrolled at Michigan Normal the first time around. Burt was several years his senior and a very successful person—one of the polished, elegant people who held a mystique for the working-class Halle. Burt was building a career as a life insurance salesman for Connecticut General Life Insurance Company, and Connecticut General was looking for bright young men like Halle. Burt encouraged him to sign up for the management-training program, and Halle thought he had found his path to success.
Connecticut General—which later morphed into CIGNA—provided a starting salary of $7,000, which was roughly 60 percent of the income Halle was bringing home from car sales, but much more than the $3,000 to $5,000 salaries offered elsewhere to new business grads. Halle learned the ropes and returned to Michigan so confident of success that he and Gerry sold their first home and bought a new place in Dearborn Heights.
“I thought that the education that I got at Connecticut General was probably more effective—a better, more direct education—than what I received in college,” Halle says. “It was practical, business oriented, down to earth. It was wonderful. I’ve been grateful to Connecticut General for years for that.”
The beauty of insurance sales, of course, is the stream of annual commissions that come from renewals. Over time, a successful agent can earn a substantial income simply by keeping clients happy. As he returned home and tried to create that stream for himself, though, Halle discovered a major difference between selling cars—or tires—and selling insurance.
“In the tire business, I’m in a store and they come in the store. Why? Because they want tires. I’m not going to their house and trying to sell tires. Why am I at their house? I’m trying to tell them they need life insurance, which they probably don’t. Or they don’t want to buy or they don’t want to allocate the funds,” he says.
Halle followed the usual pattern for new life insurance salesmen, calling on friends, relatives and anyone else he met over the ensuing two years. As his family started to grow—Susan was born on Halle’s twenty-seventh birthday, May 27, 1957, and Lisa would follow on November 29, 1958—the insurance business and Bruce Halle proved to be a mismatch.
Halle began preparing income tax returns as a sideline to his insurance business, which kept him in contact with many of his old friends and colleagues. One such contact was Harry Regetz, who had offered Bruce his first job as a car salesman. Another was Bill DiDonato, whose wedding was the locale for Bruce’s prediction that he would marry Geraldine Konfara.
Bill DiDonato graduated two years before Bruce and the two had not seen each other since DiDonato’s wedding. When they reconnected, Halle’s old friend was the proud new owner of Automotive Supply Company, which sold tires and various car parts to gas stations and car dealers. Bill was struggling and Bruce, a business genius and insurance dud, thought he had the smarts to turn Bill’s business around.
Halle and DiDonato agreed that Halle would join Automotive Supply, but not as an employee. Halle wanted to be an owner in the worst way—which turned out to be exactly how he did it.
The two agreed that Halle would buy 25 percent of Automotive Supply for $5,000, and the two would run the company together. Of course, Halle had put all his savings into a home two years earlier and had barely covered his expenses during his failed insurance career. He and Gerry had no money to invest, so Halle paid a visit to Harry Regetz, who agreed to lend him the $5,000 to buy into DiDonato’s business. Again, Halle had found someone willing to place a bet on his ability and determination to perform.
Bruce had the determination, but the challenges of the business were more than he and Bill could manage. Bill had bought Automotive Supply Company from Gallup-Silkworth Company, an oil and gasoline distributor. Because auto parts were just a sideline, Gallup-Silkworth could make a profit from the business. As an independent company, however, Automotive Supply was not sustainable.
“The biggest problem we had was accounts receivable,” Halle remembers. “Bill was a sweetheart guy. He trusted everybody. He trusted your worst enemy and gave them credit. He was just that way, and when I joined him, one of my first goals was to collect all the accounts receivable that Bill had that were past due and not being paid. So, I worked hard, and we got that to where we had at least enough cash to stay alive.”
Harry Regetz pitched in to help, teaching Bruce some lessons along the way. Harry was an old German man, very conservative with his cash. He had lent Bruce $5,000 on Bruce’s promise to repay $100 a month until the debt was covered. When Harry lent Bruce his stake in the company, Harry was retired and a bit bored. He asked if he could help out with sales.
“In Manchester, Michigan, about twenty or thirty miles away, there was a large German Mason community and I used to go up there and call on the car dealers and gas stations and practically sell them nothing,” Halle remembers. “Harry was German and he was a Mason and had a Mason ring. He’d go out there and he’d come back with $2,000 worth of sales every time.”
Regetz’s support was not sufficient to keep the wholesale business afloat, so Halle and DiDonato decided to open a retail store as a way to build sales and, potentially, margins. Halle rented an old gas station in Ypsilanti and opened his first retailing venture. Automotive Supply was a Firestone dealer, so the retail store was also expected to offer Firestone tires exclusively.
“In those days, before the laws were changed, you had to be pure,” Halle explains. “You sold Firestone and nothing else. You couldn’t have another tire in your building. Well, I wasn’t that pure, so when I opened the store and started to get going, I bought some other tires from another distributor, the Isaacson Brothers out of Toledo, Ohio.”
The Isaacsons, who owned World Tire, would later become a driving force in Bruce Halle’s success, but the decision to augment his Firestone offerings with Uniroyal tires from the Isaacsons spelled disaster for Bruce and Bill. When Firestone learned that Halle was selling another company’s tires, they pulled their franchise, product and even the sign on the store.
As 1959 drew to a close, Bruce and Bill decided to call it quits. They divided up their resources and debts and closed the business, but remained friends. In the three years since Bruce Halle had graduated from Michigan Normal, his fortunes had moved strongly in reverse. In 1956, he earned $11,600 and was living in his own house. In 1959, he had no job, no prospects and approximately $17,000 in debts—excluding his mortgage of roughly $15,000.
With a wife and three children to support, Halle began casting about for ideas. Bob McShane, an upperclassman when Halle enrolled at Holy Redeemer and now a commercial insurance salesman, had reconnected with Halle and DiDonato during the previous year. McShane began insuring Automotive Supply and often ate lunch with its owners as they sought to build and, later, close the company.
Bruce came up with three ideas in the fall of 1959, McShane remembers: selling factory-second shoes, hawking day-old bread and opening a retail tire store. McShane couldn’t see any of those options as a path to success, but he was particularly doubtful about Halle continuing in the same business that he’d just closed.
“I said, ‘Everybody sells tires. I don’t think that’s a good idea, Bruce,’” McShane remembers. As it turns out, he was wrong.
SIX TIRES, NO PLAN
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sp; Christmas 1959 was not the most joyous holiday that Bruce and Gerry Halle would share. For Bruce Jr., age seven, Susan, age two, and Lisa, just one year old, the decorations on the tree and the treats that Gerry baked would make for a festive season. However, just as Bruce had no sense of his parents’ financial challenges in Berlin, the children would not realize that their own world had crumbled.
Bruce and Gerry had ridden a roller coaster during the eight years of their marriage—from separation during the Korean War to the scrimping during Bruce’s college years; from the successful salesmanship skills that provided a down payment on a new home to his failed career moves into insurance and auto parts. Now, as the year came to a close, Bruce was planning yet another venture: a tire store.
As Bill DiDonato and Bruce Halle split up their business, each took on his share of debts and assets. Bill kept the store in Ypsilanti, which he later renamed Spartan Tire, while Bruce held onto two new tires, six recaps (retreads) and a wooden box filled with assorted gas caps, filters and other detritus of a failed distribution business.
Despite the odds, Bruce thought he might have a few advantages as a tire retailer. The retail store he operated while in partnership with DiDonato had been profitable, unlike the distribution business itself. While he wasn’t all that good at selling insurance, Halle had proved to be quite capable of selling physical goods, including both cars and tires. After working his way through school, he’d learned how to put in the hours needed to make a retail store successful.
Halle had one more thing going for him as he considered his future. He had no choice. “Tires were the first adventure when I was stuck,” he admits. “I had to open the tire store to work my way out of that mess.”
Uniroyal gave Halle a year to pay the $12,000 he owed the company. Ten years later, Halle would ask the credit manager, Andrew Stone, why Uniroyal was willing to believe in him and give him more time to pay. “Bruce,” Stone answered, “you didn’t have anything we could take, anyway.”
Halle rented an old plumbing supply building at 2266 West Stadium Boulevard in Ann Arbor, in the shadow of a Goodyear tire store. He cleaned out the building, built countertops, painted a sign, put his six tires proudly on display and opened in January, 1960. It took three days before his first customer came in, and it was another four days before he sold his first tire.
Halle chose the name Discount Tire to tell customers they could get a good deal at his store. Fair-trade laws allowed manufacturers to lock in the retail price of their products, but off-brand discounters were emerging as an increasingly common source of goods.
Years later, business school students and Discount Tire employees would ask Halle about the insightful strategy and brilliant business plan he had developed as he prepared to open his first store. His answer is always the same: there was no plan.
“I was married. We had three children then. I didn’t have a job and I had to make a living, pay the rent, buy the bread and milk and the groceries and maybe a pair of shoes,” he says. “That was the business plan: go into the store and sell as many tires as I can each day and hopefully be able to pay for those things.”
Rent at the first store was $400 per month and electric costs were low, especially since Bruce had no compressor or other machinery. He had an air tank that would hold up to sixty pounds of air, but the pressure in the tank and the tire was equalized after he filled a single tire to thirty pounds per square inch. Each tire would require a separate trip across the street to the Zephyr gas station, where Halle could fill his air tank at no cost.
If Bruce could sell seven or eight tires per day, he could cover the rent, pay the mortgage, buy groceries for the family and stay afloat. At the time, a tire might sell for $7 to $9, with a profit of just $1 to $2, but most replacement tires required tubes, and the tubes had a much higher markup. An average inner tube cost about a dollar but sold for roughly three times that much.
Chastened by his failures of the prior three years, Bruce asked Gerry to start up a fund and build a cushion of $1,500 to carry them over when—not if—the business failed. After the $1,500 was saved, Gerry could use any excess money for drapes or clothing or whatever the growing family might need.
Halle benefited from an asset that Thomas Stanley and William Danko would write about years later in The Millionaire Next Door: a wife who was great on defense. “Gerry was very conservative with money. It wasn’t like I was married to a wife that wanted this and wanted that and so on and so forth and could get us into financial disaster. We didn’t have that,” Halle says with a sense of gratitude that continues to this day.
“During the early days in the company, we weren’t going out much at night,” Halle says. “Once in a while, like maybe on a Saturday night or Sunday night, Gerry and I might go out for a little dinner. Our social life was pretty minimal. Just our friends, a few neighbors and her mother and father, who were alive then, and my mom and dad were, too.”
Clipping coupons and relishing the opportunity to get a bargain became a lifelong pattern for Gerry, even as the company’s fortunes eliminated any requirements for that kind of thrift. Saving a few dollars would continue to give her a sense of pride even when it would be far from necessary. In the early 1980s, coming home on the company plane, Gerry would regale Diane Fournier, wife of now-COO Steve Fournier, with stories of coupons she had found and money she had saved. She would see no contradiction between saving on groceries and flying on a private jet.
Reflecting his religious tradition, Bruce decided to close his store on Sunday and from noon until 3:00 p.m. on Good Friday—both policies that remain in full effect today. Although retailers were increasingly adopting Sunday hours as suburbia spread and shopping centers multiplied, Halle made the personal decision to be with his family one day each week. After he stopped working in the stores, he would maintain that policy for all the employees who followed.
Just as Bruce’s father had spent much of his time away from family, working multiple jobs, Bruce was matching that pattern at his infant company. The fledgling entrepreneur was out the door early each morning to clean and open the store and wait for customers to arrive. In the evening, he’d drive to other tire dealers and wholesalers to replenish his supply of whatever tires or tubes he’d happened to sell that day.
Most days were slow, however, and Bruce spent a good deal of his time playing euchre with seventy-year-old Fred Lirette, a polished and elegant former Ford executive who had worked with Halle and DiDonato. “I got him in the divorce,” Halle would joke, but Lirette was a valuable asset. Sociable and smart, he could answer the phone or entertain customers while Bruce was out in the cold, changing tires. A customer might appreciate the deal he got on a set of tires, but customers didn’t know one tire from another. What they did recognize was courtesy, friendliness and a clean store, all of which would become touchstones of the company.
The sign on the building said Discount Tire and Halle was a discounter from day one. His product line consisted almost entirely of off-brand tires, generally made by subsidiaries of brand-name manufacturers like Goodyear, Uniroyal and BF Goodrich. Often, Halle’s tires would have the same tread signature as the name brands and he would promote them as made by the same manufacturer.
His location next to a Goodyear store proved to be an advantage as customers noticed his sign and ventured over to check him out. Many of the major-brand retailers would sneer when a customer asked about Discount Tire, which had the unintended effect of making them more curious about the store.
Still, Halle needed a good gimmick to build his customer counts. As spring arrived, he offered to change snow tires at no cost. Snow tires were very common in northern states like Michigan, where motorists went through two cycles—one on and one off—each year. Drivers who came in to change their tires for free might be enticed to return when they needed new tires later.
The tire-changing service proved to be a winner for Discount Tire, with customers lining up around the block at times to take advantage of
the deal. Customers who received the free service would send their friends, and many would come back for new tires. The word-of-mouth benefits proved substantial. The Stadium Boulevard store was profitable in its first year, and Gerry had saved up her $1,500 emergency fund. At that point, Halle and Lirette were the only employees, and the retired Ford manager was more interested in having something to do than in earning a paycheck.
As 1960 progressed, Halle began to see the patterns of the business. The streets would be empty when the University of Michigan was playing in a football game, which gave him plenty of time to play euchre with Lirette. Customers usually knew little about tires and tended to feel most comfortable with the same brand that had come with their cars. In Halle’s case, that often created the need to explain that his tires were made by the same manufacturer that made the tires on their car, but he was offering them at a better price.
As customer counts increased and the company became more profitable, Halle bought a used air compressor, which freed him from his ordeal of one trip to the gas station for each tire he sold. The compressor increased his productivity dramatically—Halle was doing all the manual labor while Fred served primarily as euchre tutor and kibitzer-in-chief.
Halle benefited from both his physical stamina and his refusal to be defeated a third time. Each evening, after closing the store, Halle would drive to various suppliers for tires, tubes and other supplies before heading home with his bag of cash, checks and paperwork from the day just ended. The accounting office was at the kitchen table, where he tallied the day’s receipts and prepared his deposit slip for the next morning’s visit to his bank.
Halle, his clothes, even the money carried the smells of the tire store into the home, and Halle’s daughters began to associate that aroma with success—much the same way the residents of Berlin had taken a perverse pride in the scent of the paper mills. Years later, when Susan, Lisa and Gerry would pass through the tire section in their local Costco, they’d laugh and say it “smells like money.”
6 Tires, No Plan : The Impossible Journey of the Most Inspirational Leader That (Almost) Nobody Knows (9781608322589) Page 7
