“We were doing better and so our cost of living was going up a little bit too,” Halle remembers. “When I came out here in 1969, I sold the house I had in Ann Arbor to the president of the Ann Arbor Bank for $85,000, and I bought a house out here for $150,000, which was the biggest transaction that the real estate company here had ever had. It was a nice house, two and a half acres in Paradise Alley. It had four bedrooms: two bedrooms upstairs and two down.”
The house also had a barn, which enabled Halle to board the girls’ horses at home. At the time, families would keep horses at home and ride directly into the desert from their back yards. Often, the girls would ride their horses to a local hamburger stand for lunch. Susan’s first horse, Highpockets, remained in Michigan, a gift from Halle to Al and Judy Olsen.
“The girls started showing in little classes around the neighborhood and then they started showing on a bigger level,” Halle says. “That really occupied my weekends. I was not working Saturdays anymore, so I’d take the girls, put their horses in the horse trailer and drive to Yuma or Flagstaff or Prescott or Tucson for shows and spend the whole weekend. We’d come back Sunday night late and go to work Monday morning.”
While Bruce Jr. focused on football, motorcycles and less-expensive hobbies, horses ratcheted up the family’s budget.
“Suddenly, we have horses at the house. Now I’ve got veterinarians and horseshoers. And we had to go to the shows, so now I’ve got a trailer and trainers showing the girls how to do the things they did. That started to get expensive, and as I tell people over the years, ‘Have boys. They’re a lot cheaper. They play football and baseball. It doesn’t cost much money.’ Horses eat all day long just like you and they get shoes more often than your wife does,” Halle laughs.
The girls began to notice that their family’s way of life was somewhat more upscale than that of their classmates as Bruce and Gerry took advantage of the opportunity to spoil them. At one point, Gerry suggested to Susan that a debutante ball would be the perfect social soiree for her teenage daughter. Although Susan declined the opportunity, she realized that the family’s standing in the community had changed since the move. “Even to this day,” Susan says, “I remember my friends saying, ‘Can your parents adopt me?’”
While Bruce and Gerry took up tennis and entered a new social circle, Bruce continued to focus almost all his time at work. “Tennis doesn’t take much time,” he notes, “but golf would have taken the whole weekend and I couldn’t do that. My business was taking that time.”
Halle never took up golf and declined opportunities to join various business associations or political organizations. Early in his career, he made a commitment to being one of two places: at work or with his family. There were not enough hours in a lifetime to do more, he thought.
As the Halles settled into a new lifestyle in Arizona, the company continued to be primarily an off-brand dealer, and most manufacturers would not deal directly with the still-emerging retailer. Discount Tire relied on the Isaacson brothers’ World Tire to supply many of the brand-name products in Michigan and the Isaacsons sought to follow Halle to Arizona, hooking up his business with other distributors they knew.
By that time, however, Halle had his sights on more direct relationships with manufacturers. While he would remain loyal to the Isaacsons long after he was buying almost all his tires directly from manufacturers—reserving a sliver of business for the men who trusted him first—Halle was ready to move up the food chain as a buyer.
He also searched for a new promotional gimmick to surprise customers. He could continue offering free snow tire changes, as he had in Michigan, but he wasn’t likely to get many takers in the desert. Halle opted to repair flat tires at no cost, reasoning that this type of pleasant surprise would endear Discount Tire to any customers who happened to walk in with a flat. As in Michigan, the free service was popular with customers but seldom copied by competitors.
Halle continued to feel at home in the stores and would help out by changing tires or unloading inventory when he conducted store visits. His circle of friends, however, began to skew more into the business elite of Arizona. Halle continued to enjoy the rewards of his newfound wealth, investing in a 4,500-acre cattle ranch in Mayer, Arizona. During the same decade, he bought a condominium in a La Jolla, California, development where Motorola chief Robert Galvin, media magnate Karl Eller and real estate investor Russ Lyon also owned apartments. The boy who lived under another family’s roof for most of his childhood was now a man of means.
As Halle opened new stores in Arizona and Von Voigtlander spearheaded expansion in Michigan, the company began to develop a farm system for future managers. In 1974, Halle promoted former high-school principal Dave Fairbanks to assistant vice president, with a mandate to oversee Michigan stores and train the next generation of managers.
Halle continued to look eastward to seek talent for his growing base in Arizona, recruiting a second cousin, Steve Fournier, to help build the franchise. Fournier’s mother, Charlotte, was Molly Halle’s niece and one of the cousins Bruce and his siblings shared holiday dinners with in Berlin. When Charlotte and Roland Fournier took a vacation from Massachusetts to Arizona in 1972, Bruce convinced Charlotte to have Steve interview for a job.
Later that year, Steve Fournier visited Bruce and Gerry in Arizona. Just as he had done with Al Olsen a few years earlier, Halle sat with Fournier at the kitchen table to describe his dreams for the company. Fournier was sold immediately. “If he had sold pogo sticks at the time, I would have gone to work for him,” Fournier recalls. Halle was paying $10,000 per year to full-time people, just as he had planned to do shortly after opening his first store ten years earlier. “You go figure, ‘I can do that,’” Fournier says.
Fournier interviewed in November, but he wasn’t hired to work under Van Brunt in the Glendale store until 1973. Within two years, Van Brunt and Fournier built the Glendale store to the top-grossing outlet in the company. Glendale was the first store to reach $10,000 per day, $100,000 per month and $1,000,000 per year in revenue. Van Brunt would become Discount Tire CEO in 1999 and Fournier would be named chief operating officer the following year.
The next generation of employees also included a second generation of the Halle family, as Bruce Jr. joined Discount Tire as a tire jockey in 1973. Bruce Jr. had started out in the first store at the age of eight, helping with chores as his grandfather had done in the butcher shop in Berlin. He also had resisted joining the family business as a young adult, much as his grandfather had done.
Bruce Jr. worked on the Halle Ranch in Arizona after college, but he was lured back to join his father and cousins at Discount Tire. Like his father, Bruce Jr. started out by busting tires. In 1976, he had earned a position as manager of the company’s ninth Arizona store.
As the 1970s progressed, Halle and Von Voigtlander began operating more independently of each other. The partnership remained and Halle continued to own 51 percent of the company, but Von Voigtlander managed Michigan on a day-to-day basis while Halle expanded in Arizona. Increasingly, Halle began moving overall management functions to the Grand Canyon State. In 1974, he moved Bob Holman out from Michigan to manage the financial needs of the company.
“When I moved to Arizona in 1974, Harold Kruder was the accountant in Arizona, and we switched jobs because his parents needed help,” Holman remembers. “Harold had just gotten a new house and he asked me to buy his house, but I looked at it and said I couldn’t afford it. Then Bruce looked at me and said I could, but I insisted that it was too much money. Then Bruce said, ‘I’m the one who’s going to pay you. I know you can afford it.’ So that was it. I bought the house and, once again, he’s going to take care of it.”
The corporate presence in Arizona included development of a new advertising strategy. While the company relied on free snow tire changing in Michigan and free flat repairs in Arizona—the free flat service wouldn’t expand nationally until 1994—Halle and Von Voigtlander continued to look for ads that
would draw floor traffic. In 1975, the company hired Robert Natkin Advertising in Scottsdale to come up with its first television commercial, and Natkin delivered what would become the longest-running commercial in the history of the medium.
The ten-second advertisement shows an old woman heaving a tire through a Discount Tire store window. The voiceover announcer intones, “If ever you’re not satisfied with one of our tires, please feel free to bring it back. Thank you, Discount Tire Company.”
The ad has run hundreds of thousands of times in the more than thirty-five years since it first aired, and it was recognized by the Guinness Book of World Records in 2005 as the longest continuously running ad in television history. Only one customer in that time has taken the invitation literally, tossing a tire through the window of a store in Wyoming, Michigan, a suburb of Grand Rapids.
The brief and direct advertisement distilled the company’s message effectively, according to Halle. Every transaction at every store involves tires or wheels, but what the company is selling is customer service. If customers aren’t happy, they won’t come back.
Although Halle was enjoying the sunshine in Arizona, he continued to make his presence known as the majority shareholder in Michigan and flew back frequently to check out the stores in the company’s larger region. Halle was a management-by-exception type of leader, relying on his people to do the job they were hired to do and stepping in only when something was askew.
Management by exception creates both risks and rewards. The right person will strive to justify the trust placed in him, while the wrong person will simply take more time to be discovered. Soon after setting up shop in Arizona, Halle learned that one of his long-tenured managers was stealing from the company, bringing inventory home and selling it on the side. Halle confronted the betrayer and the situation turned violent. Halle hadn’t been in a physical altercation since mustering out of the service, but he lost his temper and thrashed his now-fired manager, earning a lawsuit for his troubles. It was an embarrassment to the now-established business leader, who suddenly had much to lose, but it might also have put the final nail in the coffin for Halle’s temper. Although he would certainly have moments of anger in the future, he became increasingly adept at keeping his temper under control.
Today, it is rare to find anyone below the senior management ranks who has seen Halle in a state of pique. While he will express his dissatisfaction openly to his senior managers, he keeps the tone low-key enough to reach only its intended target, ensuring that no innocent bystanders get caught in the crossfire.
Notably, the betrayal by his store manager didn’t change Halle’s willingness to manage by exception. Although he would be betrayed by a handful of people over time, he focused on the betrayals as the exception and loyalty as the norm. As a result, he continued to trust the next person he hired, expecting and usually receiving the best from that person.
Halle held himself to the same standards he required of others. When he and Gerry put their first Arizona home on the market, he agreed to one offer before receiving a second offer for $50,000 more. While the first offer was still oral, Halle bypassed the opportunity to sell at a higher price.
“I figured, if I would go back on my word for $50,000 today, then maybe I’d do the same thing for $50 later on,” he remembers. “It just wasn’t worth it.”
As the company and its stores began to post more substantial earnings, Halle also began to reward his managers more generously, initiating quarterly bonuses for store managers in the mid-1970s. While he would no longer cede ownership in the company, he was increasingly willing to distribute cash to the people who were making his business a success.
As the company grew, travel between the Arizona and Michigan regions began to wear on Halle. Although he had begun traveling first class on commercial flights, constant travel was fatiguing at best. He found his solution while waiting for a tennis court at the La Jolla Shores condominium development in 1977. Halle’s tennis partners—Eller, Galvin and Lyon—were waiting for a court and discussing the value of corporate jets. Halle had been considering a new investment in apartment buildings in the Phoenix area, but the talk intrigued him.
Since his first flight from home in Michigan to Camp Pendleton in California, Halle had loved air travel. Although Gerry squeezed his hand to the breaking point on their first descent into the mountainside airport at Aspen, the couple had begun taking flights like other people took taxis. After listening to the stories from his more-established peers, Halle decided to skip the investment in Phoenix apartment buildings and buy his first jet—a Cessna Citation.
“That changed my life,” Halle says. “Airplanes have allowed me to do all of this travel efficiently and quickly all over the country. And the staff on the plane has nowhere to go, so we can focus. We couldn’t have grown this way taking commercial flights.”
Besides, having a corporate plane would be very, very cool.
Halle was quick to share his enjoyment of private jet travel with his employees. As Gary Van Brunt and Steve Fournier built revenues in Arizona, Halle decided it would be fun to reward them with an airborne outing. In 1979, he sent Van Brunt, Fournier and Holman from Phoenix to Orange County, California—for dinner. The next morning, he arrived at work early and called his friends in as soon as they got to the office, giddier than they were about their experience, according to Holman.
Eventually, the flight on a company jet would be a standing commitment for Halle. When any store reaches $200,000 in monthly sales, Halle sends a company plane to take the full-time employees and their significant others on an outing. The flight might take them from Detroit to Mackinac Island or from Salt Lake City to Los Angeles. For most employees, it would be the first time on a corporate jet.
“These are young people in the stores and to get a day of jetting with their wives or their friends, that’s exciting,” Halle says, visibly excited by the idea. “On a private jet! Most people never get on one.”
Since the first incentive flight in 1983, Discount Tire has flown more than four thousand employees on these trips. Halle has resisted suggestions that he raise the threshold level for a corporate flight to reflect the impact of inflation. The flight is both a reward and an incentive, in his mind, and the sooner he incentivizes the people in his stores, the better.
“Someone will tell me we should increase the incentive sales level because tires cost more now,” Halle notes, “but my response is always the same: ‘Why didn’t you mention that idea when it was your turn to take the flight?’”
Successful expansion in Michigan and Arizona continued to build both cash flow and earnings for the teenaged company, enabling Halle and Von Voigtlander to grow to thirty-one stores—twenty in Michigan and eleven in Arizona—by the end of 1978. Revenue that year surged 47 percent to $27 million, and the regional upstart was getting recognition as a company to watch. On a per-store basis, overhead remained low and volumes were high, enabling new stores to achieve profitability quickly in most cases.
There was no question that the company was succeeding and both Halle and Von Voigtlander were becoming increasingly wealthy. Now, nearly twenty years after Bruce Halle had decided to sell tires instead of day-old bread or factory-second shoes, he and his partner were ready to double down on their expansion program.
GOING FOR BROKE
As the company built its momentum and track record, Halle and Von Voigtlander decided to accelerate their pace of growth. Although Discount Tire was not yet a household name, its combination of low prices and surprisingly good customer service was proving to be sustainable. Bob Holman was lining up larger lines of credit, and vendors were more aggressive when courting their business.
In 1979, Halle was optimistic enough to buy a second jet, an eight-seat Lear 35, and repositioned the six-passenger Citation in Michigan for use by Von Voigtlander. Although the distances between stores were generally small in each of the two regions, having two jets made a statement to both employees and competitors: Discount
Tire had arrived. Halle and Von Voigtlander decided to bring that message home to the entire industry when the National Tire Dealers and Retreaders Association held its 1979 annual meeting in Discount Tire’s home area—Detroit.
Halle and Von Voigtlander brought a slew of managers to the conference as a way of demonstrating the size of their organization. Dave Fairbanks and Al Olsen researched wardrobe options and outfitted each manager in a navy blue Discount Tire blazer, white shirt and tan Sansabelt slacks. Discount Tire’s team presented a sharp contrast to the more casual appearance of most tire retailers—small or large—at Detroit’s then-new Renaissance Center.
Maury and Jay Isaacson feted the Discount Tire team in a reception at the top of the hotel, where Gerry Halle made a sport of transferring fuzz from her sweater to the navy blue jackets of her spiffy companions. While the Isaacsons’ soiree was important recognition for Discount Tire, other, more exclusive parties beckoned.
Gary Van Brunt, Jack Chambers, Dave Fairbanks, Al Olsen and John Arthurs crashed the Michelin tire party, only to be undone by their upscale attire. A Michelin executive noticed the word discount on the jackets, sniffed that Michelin never discounted its product and had them ejected from the party. Within the next decade, Discount Tire would become one of Michelin’s most important customers in the United States.
Undaunted, the merry band set its sights on Goodyear’s hospitality suite, where the company hosted an event that would never include an off-brand retailer like Discount Tire. Even though the company was a substantial customer of Lee Tire, a Goodyear subsidiary, Discount Tire was not in Goodyear’s league.
6 Tires, No Plan : The Impossible Journey of the Most Inspirational Leader That (Almost) Nobody Knows (9781608322589) Page 10
