Halle agrees that the smell of the store would “clear your nostrils out” each morning. Bringing home the bag of cash at night was one of the highlights of his first years in business.
“I’d come home and I’d be very excited, you know? I had a great day and I’d dump it on the table and Gerry and I would count it out. It was amazing. ‘Look what I did today! Look at all this money!’ It was fun and it was kind of a cool thing,” Halle remembers.
Halle’s daughters remember that their father’s hands were continuously bandaged from the cuts and scrapes that came with changing tires. “He’d do the dishes at night because that was the only way his hands would always get cleaned,” remembers daughter Susan Lyle.
Deeply in debt, Halle’s financial position was precarious at best during the company’s first years. While the business became profitable very quickly on an operating basis, Halle was continually strapped for cash to buy more inventory and pay down his debts to Uniroyal and Harry Regetz. Discount Tire was at risk of collapse from almost any type of effective competition during its earliest stages. The nearby Goodyear store, gas stations and other competitors had deeper pockets or additional product lines to protect them if they decided to match or undercut Halle’s prices. None considered the tiny store on Stadium Boulevard to be a threat, however—certainly not enough of a threat for them to cut their own prices in response. Protected by competitors’ inertia, Halle had the opportunity to grow.
By 1961, just a year after opening, Discount Tire was on a roll. Word of mouth was drawing an increasing number of customers, and revenue grew rapidly. Growth presented cash flow issues, however, as Halle still lacked the capital to buy tires in volume or the credit lines to buy now and pay later. His credit problems were resolved, however, by two brothers from Toledo, Ohio—Maury and Jay Isaacson.
The Isaacson brothers owned a tire distribution business called World Tire, and they had sold tires to Halle when he was running the retail store he owned with Bill DiDonato. Looking to expand, they decided to reconnect with Halle and drove up to Ann Arbor, just forty miles away. The Isaacsons told Halle he could order up to forty tires at a time, on credit, with sixty days to pay. There would be no contract—the Isaacsons would trust Halle to do the right thing and pay his bills. As Sister Marie Ellen, Ray Walk and Harry Regetz had done before them, the Isaacsons saw something in Bruce that they liked and trusted. He was determined to earn that trust.
The boost from the Isaacsons helped Halle keep more tires in stock and reduced the amount of time he spent each day picking up tires from various suppliers. While the relationship with Halle proved highly profitable for World Tire, Halle’s relationship with the Isaacsons became a catalyst for Discount Tire’s growth. The store posted revenues of $110,000 in 1962—the equivalent of selling full sets of tires and tubes for roughly six cars per day—and Halle’s gross profit was 23 percent.
Halle changed the tires, kept the books and cleaned the toilets on Stadium Boulevard. Even though sales were growing, Halle was hesitant about adding full-time employees to the start-up business. He had returned to the income levels of his car-selling days, but he was more cautious than he might have been in earlier years. As sales grew in 1962, though, he was confident enough to begin hiring part-time workers during heavy periods.
As winter came to Michigan that year, Halle recruited Gerry’s first cousin, a fifteen-year-old high school student named Gary Van Brunt, as one of his first part-time workers. Van Brunt’s father, John, had obtained the funding for the Halle’s wedding from his boss, Raymond Walk. John Van Brunt died a few years later, when Gary was nine years old, and Bruce and Gerry became an increasingly close part of his extended family. At thirty-two years old, Bruce was a role model for the fatherless teen.
“One day, Bruce called the house and said, ‘What are you doing Saturday?’” Van Brunt relates. “I said, ‘I’m waiting for it to snow so I can shovel some sidewalks and make a few bucks.’ He said, ‘Yeah, me too, I’m waiting for it to snow. I’ve got lots of snow tires and I need some help at the store. You’re kind of mechanical and you’ve worked on cars, so how would you like to come to work on Saturday?’ I’d never changed a tire out of a wheel, but he said, ‘We’ll show you how to do that.’ So, he picked me up and we stopped at a couple places to pick up some tires that people had ordered and we got to the store and there were two college kids there, Jack Bailey and Freddy Sanchez. They showed me how to jack up a car and take the assembly off. I’d take it inside, they would change the tire and balance it and I’d take it out and put it back on.”
Halle paid Van Brunt $10 per day for ten hours of work. After a month, he offered the teen a regular part-time job, with a warning. Van Brunt recalls, “He said, ‘There’s something that we have to get straight. The two worst people in the world to hire are friends and relatives. First off, if you hire a friend and he doesn’t work out and you have to fire him, then you’ve not only lost an employee, but you’ve lost a friend. The second is a relative. If you hire a relative and he doesn’t work out and I have to fire you, then the whole family is impacted, but you’re still a relative. That’s not good either. So here’s how it’s going to be. From 8:30 ’til 6:00, you’re an employee. The rest of the time you’re a relative. If we have a problem during the day or something and you’re supposed to be at my house for dinner that night, you better be smiling, because then you’re a relative.’ And that’s how we kept it all these years.”
Van Brunt had been working part-time jobs since his father died, babysitting for the Halle daughters, shoveling snow and cutting grass. As he earned more money at the store, he bought a car that he used to make pickups before he went to work. The system was simple—he would call the store collect and, if they needed something, Halle would accept the charges. If not, no expenses were incurred. Van Brunt saved costs further by reclaiming broken pieces of chalk—which he used to mark tire inventory—from tire suppliers who were rich enough to toss out a piece of chalk that was only half used.
As the Stadium store became well established, Halle began to consider how he could grow his business further. Goodyear had multiple stores. Firestone had multiple stores. Sears had multiple stores. There was even a tiny hamburger chain, McDonald’s, that was opening multiple stores. Why not Discount Tire?
It was something of a leap for a store owner to consider additional outlets while he was still paying off his creditors. Halle was relatively fearless, however, and a bit headstrong. Discount Tire’s model was very simple: offer low-priced products, convince customers they were getting a deal, give them surprising benefits like free snow tire mounting or clean bathrooms and try to build positive word of mouth. As that model proved profitable, all Halle needed were the people and money to multiply the footprint.
Halle had been favorably impressed by a tire salesman at a nearby General Tire store, Ted Von Voigtlander, and began talking with him about coming to work with Discount Tire. Halle offered Von Voigtlander the same opportunity DiDonato had given Halle. With an investment of a few thousand dollars to help finance a second store, Von Voigtlander would be a 49 percent partner in the company. In 1963, Bruce Halle and his new partner prepared to open their second store.
’TIL DEATH DO US PART
To a large extent, the still-fledgling Discount Tire Company was already driven by personality as much as product. Halle was selling off-brand tires and giving away free services, which limited margins. The only way to make much profit was by pumping up sales volume and that, in turn, required word of mouth from happy customers. The person selling and installing the tires—usually Halle himself—would have to use his customer contact time to build rapport and entice follow-up sales.
When Von Voigtlander joined the company, he mirrored Halle’s willingness to work hard and smile while doing it. He encouraged customers to remember the company, to appreciate the deal they were getting and to recommend Discount Tire to their friends. As a team, the two partners began to work as one.
Hall
e and Von Voigtlander rented an old gas station building in Ypsilanti, across town from the tire shop Bill DiDonato was operating, and opened their second store in 1964. Michigan offered a tax exemption for the first $25,000 of income per corporation during this time, so the partners took advantage of the break by incorporating the facility separately as Tire Wonderland. Von Voigtlander brought in a friend, Mickey Smith, to manage the store as he and Halle continued working at the Stadium Boulevard store and considered further growth opportunities.
In the 1960s, summer weekends with family were almost as hectic as working. Bruce would close the store on Saturday afternoon, pick up Gerry and the children and get on the road for a five-hour drive to a campground on Lake Michigan. Much as his own family had ventured to Dolly Copp from Berlin, the Halles would spend Saturday night and Sunday camping before driving home late in the day on packed two-lane roads. On Monday mornings, Bruce would leave home at 6:30, picking up tires along the way to his store in Ann Arbor.
Even in the busiest times, the Halle children saw their lives as normal, much as Bruce viewed his own childhood in Berlin. Bruce helped his children with homework, Gerry kept the house running, and the couple caught up on the details of the day when Bruce came home at night. Halle’s children remember the pair as particularly affectionate, holding hands and calling each other pet names on a daily basis.
With a partner and a second store, Halle became increasingly optimistic and, to a great degree, fearless about money. In 1964, the same year he and Von Voigtlander opened the second store, Bruce and Gerry traded up to a newer, more expensive home in Ann Arbor, closer to the Stadium Boulevard store. Halle persuaded the developer to sell him the property and build the house with almost no down payment—and then scavenged rocks and rubble from a nearby highway construction site to build a wall along the driveway with Bruce Jr. The house had an outdoor swimming pool, which immediately raised the social status of the Halle children.
While Bruce Jr. carried on the tradition of his father and grandfather by joining the football team at St. Thomas High School, Susan and Lisa began riding horses at a nearby stable. Halle bought Susan her first horse, a seventeen-hand thoroughbred named Highpockets.
In 1965, Bruce bought a working farm at Boyne Mountain that became the family’s weekend retreat. In the summer, the family would spend time outdoors at the Boyne Mountain farmhouse and, in the winter, they’d go skiing in the same area. By the end of the decade, they would up their game by venturing out to Aspen, Colorado, for their first ski trip out west. In the same period, Bruce would buy Gerry her first mink stole, making her the first woman on her block with a fashionable fur.
Bruce and Gerry spent their free time together or with a small group of close friends and family. Increasingly, that group included the employees who were pinning their career hopes on the budding entrepreneur. On Sundays, when the stores were closed, the Halles would often host barbecues or other gatherings for employees and their families, creating connections that tied employees more closely to each other, to the company and to Halle. Gerry relished the role of Discount Tire Mom and worked to make sure both husbands and wives felt like part of the family.
From the start, Halle wanted his employees to be very happy. While he cannot recall a time when he analyzed the connection between happy employees and good customer service, Halle recognized the strong link between the two. Customers who are treated rudely don’t return. Employees who are miserable at work are less likely to treat their customers well. Therefore, he couldn’t keep customers happy unless he made his employees happy first.
When the stores were busy, Halle expected full commitment from his workers to get customers serviced quickly and with a smile. During slower times, the men at the Stadium Boulevard store would play touch football with Jack Carpenter’s employees at Perfect Fit Seat Covers, which shared a parking lot with the store.
“Jack Carpenter made seat covers and convertible tops, primarily for boats,” Gary Van Brunt recalls. “We shared a common driveway, and when it snowed, Jack would be out there in the morning plowing. In the wintertime, his business would fall off and our business would increase, so he was there to help us if a car got stuck, to push cars in. When the air hoses would freeze up, we’d take them over to Jack’s place and he would shoot steam through them to thaw them and then blow air through the hoses to dry them out. When there was a football game going on, business would go to nothing, so we’d play football in the parking lot with his team and our team. When we’d rip our pants squatting down and so forth, we’d take them over there and they had sewing machines and he’d sew up our pants. We had a lot of fun with Jack.”
In turn, Jack Carpenter had his fun with the men of Discount Tire. When his neighbors brought pants in for repair, the results were often unexpected. At times, he would sew the pant legs shut or stitch the employee’s wallet into the back pocket. “You’d go for lunch and reach for your wallet and you couldn’t get it out,” Van Brunt remembers.
Fun was a critical ingredient for Halle from day one with Fred Lirette. If the workplace was fun, people would feel more like teammates, and teammates worked harder to make the entire team successful. The fun quotient increased in the mid-1960s when Fred Halle retired from Ford Motor Company and began helping out at the Stadium Boulevard store. Still vital and a hard worker—he would live to be ninety-two years old—Fred Halle was back on stage, even if the audience consisted of a bunch of tire changers and the crew at Perfect Fit Seat Covers. The first store also became a magnet for Bruce Halle Jr., now a teen doing odd jobs around the store in much the same way that Gary Van Brunt had done a few years earlier.
Halle and Von Voigtlander had depended on word of mouth and some traditional print advertising to build brand awareness for the first two stores, but they upped the ante in 1966 with eye-catchingly weird ads in a start-up paper called the Huron Valley Ad-Visor.
“Wayne Alber was the guy who was starting it up, and Wayne was a creative guy,” Halle remembers. Ted and Bruce dressed up as Batman and Robin, as aliens in a flying saucer, as the Cartwrights from the television show Bonanza—pretty much anything to get a laugh or a second look. “People would see these ads and wonder, ‘Who are these crazy guys? Let’s go see them!’ We gave away geraniums, watermelons—anything for some goodwill. In town, there was a Goodyear and a Firestone tire store and a General Tire store. They were just staid old places and they didn’t do anything. We’re doing this off-the-wall stuff.”
Halle and Von Voigtlander opened their third store, in Flint, Michigan, in 1966 and followed quickly with a fourth store, the second in Ann Arbor, in 1967 and one in Kalamazoo in 1968. They built their team by reconnecting with friends and relatives, former classmates and business contacts.
Dave Fairbanks, who had met Bruce as a freshman at Michigan State Normal College and helped him move his massive inventory of six tires into the first store, joined Halle in 1966 after working his way up to principal at Willow Run High School in Ypsilanti. Fairbanks had watched his friend building a business and thought the growing company—and its founder—offered more career potential than the school.
“When I was a principal, I had to hire teachers at $5,500 per year, and here Bruce was, hiring people to come in and change tires for $7,700 per year,” Fairbanks remembers. New stores would need new managers, and Fairbanks, whose grandparents owned a grocery store when he was young, thought it would be great to manage his own store. While he was earning much more as a high school principal than he would as a tire changer, he saw more upside over the long term from building a business. Beyond the opportunity for higher income as a store manager, Fairbanks liked the idea of working with his old friend.
As Halle considered further expansion of the company, however, he began to realize that he had put himself into a box. He could not add more partners and still be the majority owner of the company.
When the entire staff consisted of a few part-timers and one Marine sergeant, Discount Tire operated on the “cigar
box” accounting system. Whatever money was left in the cigar box at the end of the day was Halle’s to keep. Not much of that accounting system changed when Ted Von Voigtlander came on as his partner.
What had changed was Halle’s willingness to give up ownership in the company. He hadn’t thought much about a third or fourth or fifth store when he courted Von Voigtlander to help him finance store number two. He acted rashly, though, in giving up 49 percent ownership in return for the single infusion of cash for the second store. Once his share had dropped to 51 percent, Halle had no more equity to cede. If he wanted to attract the right people to run future stores, he would need some other approach to compensation.
When Fairbanks joined the company, he wanted to come in as a part-owner, as Von Voigtlander had done. Halle didn’t want to drop his ownership level below the 51 percent he’d agreed to with Von Voigtlander, so he made a deal with the two men. Fairbanks would invest $10,000 to own 30 percent of the company’s fourth store—which opened in 1967 in an old Lincoln-Mercury dealership in Ann Arbor—and Bruce would adjust his compensation to give Ted a bigger cut of the rest of the profits. Nearly forty-five years later, Fairbanks still owns 30 percent of that store, making him the only person other than Bruce Halle to have any equity investment in a Discount Tire store.
Fairbanks’s store opened as Huron Valley Tire and marked the first—and only—time the company would offer general repairs, alignment and other services in a Discount Tire store. Many major tire dealers and most gas stations offered mechanical work, so the added source of revenue seemed like a natural fit.
It wasn’t. Changing tires was a high-volume, quick-turnover business. Margins were lower than for general car maintenance, but the store could make up the difference in volume. Better yet, tire changers earned far less per hour than mechanics. As Fairbanks, Halle and Von Voigtlander learned to their dismay, mechanics looked down on the grunt work performed by tire jockeys, so they would resist helping when they were idle and the tire changers were overworked.
6 Tires, No Plan : The Impossible Journey of the Most Inspirational Leader That (Almost) Nobody Knows (9781608322589) Page 8