“Uniroyal gave us projections about how much service work could be done in a store that also sold tires,” Fairbanks remembers. “Over a period of time, we found that the newer cars did not need the alignments, brakes and mufflers replaced as often as the old cars used to. We also found that the alignments they projected could never be done in the time they said they should be done.”
Meanwhile, Uniroyal’s reputation as a tire brand was not particularly strong, and it became harder to sell tires as a Uniroyal dealer. Halle and Fairbanks met with a rep from the tire company, and Halle asked Fairbanks if he wanted to continue as a Uniroyal dealer. Fairbanks said “no” and Halle dropped Uniroyal on the spot, winning added loyalty from his former classmate and moving the product/service mix into sync with the company’s three other stores.
Two years after Dave Fairbanks cast his lot with Halle, Al Olsen, a deputy sheriff in Washtenaw County, was looking for a new line of work. Olsen and Fairbanks would soon be instrumental in building the company, but in the mid-1960s, they were merely two young guys looking for an opportunity to grow.
Olsen had worked in retail at a Food Fair grocery store when he was in high school, and he liked the environment. Better yet, his boss liked him and gave him added responsibility. When Olsen graduated from high school, he went to work full time at the store and became an assistant manager.
In 1959, Olsen joined the Army and became a military police officer. When he left in 1962, he drifted into civilian police work and was earning about $15,000 a year, plus benefits, as a sheriff’s deputy in 1967. As civil unrest increased during the Vietnam War and the Civil Rights Movement, police work in a college campus community lost much of its charm.
Olsen was a friend of Mickey Smith, who managed the Ypsilanti store, and Olsen had been one of Smith’s first customers. “Mickey always told me, ‘Someday you’re going to get tired of police work. You should talk to Bruce when you’re ready,’” Olsen remembers.
In April 1968, Olsen pulled up in his squad car for a twenty-minute interview with Ted and Bruce in Ann Arbor. At the end of the interview, Ted said Olsen would hear from them in a week, but by the time Olsen reached home, Ted had already called. Olsen gave his notice and began working at the Stadium store two weeks later. He loved the company immediately.
“The culture of the company is very, very simple,” remarked Olsen. “Bruce said, ‘Respect your fellow employees. Look after each other. Take your customers in as family.’ How are you going to treat your customers if you, in your mind, say, ‘That’s my dad coming in?’ That was laid out to me in the first three days, and it’s comforting.”
After just three days at the Stadium store, Ted announced that he and Bruce had taught Al everything they could about the company and sent him to work under Smith at the Ypsilanti store. Within three years, he was a store manager making as much as he had made as a deputy sheriff and he exceeded that level substantially in subsequent years.
Al and his wife, Judy, had done a bit of soul-searching before Olsen took the job at half the salary and with none of the benefits he had been accustomed to as a deputy sheriff. Judy agreed to go to work as a way of reducing their economic burden—a significant step in the mid-1960s. After his family and other contacts learned he was going to work in a tire store, he began receiving competing job offers—including one from his father.
Olsen called Halle for a follow-up discussion, and Halle invited the Olsens to his home the following Sunday. After dinner, Gerry and Judy developed their own friendship while Al and Bruce discussed plans for the company. Halle said he hoped to have twelve stores within three years, and that Olsen would be one of the managers.
“I told Bruce that night, ‘’til death do us part. I will not be lured away.’ I just needed the comfort and understanding that he intended to grow and I was going to be part of it,” Olsen said.
As Halle and Von Voigtlander opened new stores and recruited the men to manage them, employee motivation and rewards became a relevant topic. After taking Von Voigtlander in as a partner and then making a special deal with Fairbanks, Halle had given up all the equity he was willing to cede. He would have to find another way to attract and retain good people.
Halle didn’t want his people working on commission. He knew from his own experience that commissions created the temptation for extra upselling. Upselling had worked for him as a car salesman, when he convinced buyers they could afford an extra payment of $3 or $7 or $10 per month. At Discount Tire, however, the most powerful calling card was savings. If customers had the sense they were being lured in by cheap prices, only to be pressured by commission salesmen, the company would suffer. Bait-and-switch marketing would not drive referrals or repeat business.
As with most decisions, Halle was more intuitive than analytical. He wanted to attract good people with good personalities, integrity and a solid work ethic. And he would have to pay them well enough to retain them.
“I wanted all my full-time people to make $10,000 a year,” Halle says, recalling a nice, round number that he had pulled out of the ether. “I just picked $10,000. That was big money. People who graduated college didn’t make that much money. And, we’re a little tire store and you can make $10,000. That’s kind of cool! It was cool, and it helped me get good people and keep good people.”
Halle began implementing his grand strategy as the company started to expand in the mid-1960s. Although he didn’t have the cash flow to bring people in at the $10,000 level, he sought to bring people up to that level as they proved themselves in the stores.
As the advertising and word of mouth spread and stores multiplied, revenues multiplied as well. By 1969, sales reached $1.7 million. Tubeless tires had become the norm for new cars late in the 1950s and the replacement market followed several years later, making tubes a much smaller component of the total than they had been when Halle opened the first store in 1960. In the meantime, the company more than compensated with higher customer counts.
Upheaval in the tire industry provided significant benefits for Discount Tire. Overall, quality control was poor and the original equipment tires on American cars were often undersized—possibly to save money—relative to the weight they were carrying.
Discount Tire continued to sell off brands, usually made by the bigname manufacturers. Peerless tires came from Uniroyal, Lee was part of Goodyear, Carnegie was made for the Isaacson brothers by Firestone. The Isaacson brothers at World Tire continued to be Discount Tire’s biggest suppliers, but Halle, Von Voigtlander and Van Brunt started looking for additional sources for product. Even with multiple stores in the late 1960s, the company was far too small to deal directly with most manufacturers. For customers, though, the off brands were usually a better deal.
“The only difference might be in the tread design,” says Dave Fairbanks. “When you had the tire with all the plies in there, you could basically have the same tire.” Often, tire companies would manage their inventory by unloading blemished tires on second-tier dealers like Discount Tire. “You could have some kind of blemish on the whitewalls, but it was the same tire,” Fairbanks recalls. In fact, he adds, the tire companies would sometimes mark tires as “blems” simply to reduce inventories, even if the tires had no blemishes or other flaws.
During this period, it was relatively simple to show that an off-brand replacement tire was superior to the name-brand tire that came with the car. “The original equipment tire by Firestone and Goodyear, in those days, was a two-ply tire. It had a soft sidewall, not like the tires you have on your car today. We had four-ply tires. They were a lot firmer,” Halle remembers. “I’d show people the soft little two-ply tire and here’s a four-ply tire that is much stronger and safer, and I’d sell them private-brand tires—made by Goodyear, made by Firestone and made by Uniroyal.”
As 1969 began, Bruce and Ted were mini-moguls atop a five-store empire that qualified them as very successful businessmen. As they considered their options, they began to look at markets outside of Michigan.
Population growth was stronger in the South than in the Rust Belt states, and many of their larger competitors had stores across the nation. It was time to expand their horizons.
ARIZONA INVASION
Halle’s early decision to change snow tires as a freebie was a hit in Michigan, but it also highlighted one of the challenges of life in the Snowbelt: snow. Halle and Von Voigtlander were still changing tires occasionally at the Stadium Boulevard store—though other workers handled most of the load—as the winter of 1968-69 ripped across the Wolverine State.
Busting tires is a difficult job in any environment, but handling lug nuts and prying frozen tires off cold metal wheels can be particularly challenging in winter. Tire workers, including Halle, suffered cracked and bleeding skin on their hands during the winter months—an occupational hazard for outdoor jobs.
Discount Tire’s sixth store, in Flint, Michigan, was the first built to the company’s own design—and even that store had bays exposed to the elements. The store, which opened in the fall of 1968, was five thousand square feet, with inside workspace for mounting, repairing and balancing tires and a showroom with products on display. Its four bays, however, were outside under a canopy. In the winter, tire changers would risk frostbite as they set cars on racks, loosened lug nuts and hoisted wheels from axles. Often, blowing snow would cover the ground under the canopies, forcing workers to shovel their bays before serving the next customer.
As the company began to grow, Halle and Von Voigtlander worked less in the tire shop and spent more time managing the business. Halle was fulfilling a promise he’d made to Dave Fairbanks, Al Olsen and others by creating the opportunity for advancement. Each new store became a reward for the new manager and an enticement for the next man in line: One day, we’ll build a store for you, as well.
The big question, though, was where to build the next store. Michigan was a big state, and a company with five stores could grow for many years there without saturating its market or cannibalizing its own shops. At the same time, the Sunbelt states offered substantial promise. Rising populations meant more than simply increased demand for replacement tires. New residents to any state might have no particular loyalty to more-established retailers, which could create an opening for an upstart like Discount Tire.
Halle and Von Voigtlander debated the relative merits of Florida, Arizona, Texas and California, ultimately deciding to conduct some field research in Arizona. Halle had been to the state once before—a refueling stop in Prescott on his flight to Camp Pendleton in 1952—but neither partner had any real insight into the area.
What they did have was an appreciation for sunlight. When they got off the plane in April of 1969, the contrast between the climate they’d left and the one they were experiencing was nearly shocking. Both Halle and Von Voigtlander began to reconsider the character-building advantages of winter in Michigan, and each expressed a willingness to make the painful sacrifice of establishing a beachhead in a state without snow.
Halle, with 51 percent of the company, opted to make the move, assuming Gerry was willing. If she wouldn’t move to Arizona, Von Voigtlander could do it. Bruce and Gerry flew out in June and made the decision to resettle—they bought their first home during their brief visit and moved to Paradise Valley a few months later.
“You do get a little lucky sometimes,” Halle says today. “When I moved to Arizona and started opening stores, as opposed to Michigan, the seasons were an asset to me. When the storms and snow came to the Midwest and it was boomtown out there, it was big-time stuff. And in the spring when they’d take the snow tires off, it was boomtown. In Arizona, it was just more steady, although summers get a little better here. So the mix of climates was a plus. I wasn’t smart enough to figure it out at that time, but it was happening and I could see it.”
The decades-long population shift into the Sunbelt states has been a major boon for Discount Tire. Today, well over half of the company’s stores are south of the Mason-Dixon Line.
“It’s not because we were brilliant or smart,” Halle says. “We were just lucky. And it’s sometimes better to be lucky than smart, because you’re never that smart.”
Halle scouted sites for the first Arizona store as Von Voigtlander prepared to open the company’s sixth and seventh stores in Michigan. Halle’s market research involved driving along busy streets and counting both cars and tire stores. The first Arizona store opened on East Thomas Road in January 1970—exactly ten years after Halle had opened his first store in Michigan—and Halle recruited Gerry’s cousin, Gary Van Brunt, to move from Ann Arbor to work with him. Van Brunt, now twenty-three, was back only a few days from his honeymoon when Halle asked him to make the move.
“I said, ‘Yeah, but now I’ve got a wife, so I’ve got to talk to her,’” Van Brunt remembers. “He said, ‘Okay, my plane leaves in two hours. Give me a call.’ I went home, talked to my wife and called Bruce to say we’d move to Arizona. He said, ‘Get some money from Ted and I’ll see you next week.’ I told him it might take a little longer than that and he said, ‘Okay. Two weeks.’”
Van Brunt moved in with the Halles for a month while his wife prepared to transplant their newly formed household from Michigan. Van Brunt worked with Halle at the East Thomas store before they opened Discount Tire’s second Arizona store a few months later in Glendale. Just as Halle had done on Stadium Boulevard, Van Brunt built the counters, installed air lines and painted the walls as he prepared to open the Glendale store.
Store growth was organic at Discount Tire. Halle and Von Voigtlander had no master plan for expansion, but looked for new opportunities as cash allowed. Although the stores were performing well, cash remained scarce, due to the cost of equipment and inventory to equip each location.
“Uniroyal was one of our biggest suppliers, and they were actually in Michigan, so the day that their bill was due, I drove down and got to their front door at 5:00 p.m. Friday so that we had the weekend for some more sales to get cash to cover that,” recalls Bob Holman, who joined the company as an accountant in 1969. “That was a regular occurrence, my drive down. Other than that, Bruce was out in Arizona, so I had Arizona checks and Michigan checks and I just used both of them. At that time, there were three or four banks where we could float. That really kept us going for a great deal of time.”
Holman, like many others, had joined Discount Tire by chance. Coming home from a job interview, he stopped in at the store on Washtenaw Boulevard to tell his friend, Bob Flavin, that he had been offered a job. The job Holman had been offered wasn’t in accounting, but Flavin told him Discount Tire was looking for a new accountant at the time. After a fifteen-minute interview with Von Voigtlander, Holman was starting a thirty-eight-year career with Discount Tire.
“My first office was in the first store and they cleaned out a little wheel room that had used wheels and stuff in it,” Holman says. “They took it and painted it and threw a desk in there. That was my first office. Then I started meeting the guys. It was just a fun group of people. I think back then, that was the best part about Discount Tire. Everybody was friends. We did dinner and stuck together for about thirty to forty years after that.”
Halle had already moved to Arizona when Holman joined the company, but it was clear from the beginning that he was the senior of the partners.
“Bruce came into town, and he asked what I was getting paid and he said, ‘I don’t think that’s enough.’ So, he gave me a raise and, two days later, he left to go back and said, ‘I’ve been thinking about it. That wasn’t enough either, so he gave me another raise.’ I thought, two raises in two weeks, that’s pretty great. I don’t think I got another raise for three years, though,” Holman recalls.
Holman had doubts about the long-term prospects for the small and undercapitalized company, but his confidence grew as he got to know Halle better.
“I first thought it was a short-term deal, but after meeting and getting to know him, you just knew he was going to succeed,” Holman says. “It was the
way he treated people. Even back then with the Isaacsons and everything else, everything was a handshake. Those people trusted him, too. There were not a lot of contracts back in those days. So, there’s a guy you could shake hands with and it’s going to happen. He was really consistent in what he said and it all came true. There were no glitches.”
Bruce and Gerry continued the close partnership of their earlier years as they established new patterns in Arizona. One of the girls would fix a scotch and water for Bruce when he came home at night and he and Gerry would discuss the day’s events. Daughter Susan recalls the couple blocking out a half hour or an hour to spend time together each night.
Bruce wasn’t bringing home a bag of cash from his store each night as had been the case in the early 1960s, but he did bring stories about the challenges and victories of an aspiring tire magnate. Gerry adopted antique shopping as a hobby, scrounging around in little shops to find tire-themed knickknacks to bring home for Bruce. She loved discovering old pieces of Victorian furniture that she could sand, stain and restore.
While Gerry made friends easily in Arizona, she and Bruce were determined to spend their free time with each other. Bruce was either at work or at home and, when he was at home, he was focused on Gerry and the kids.
“The move was great for Mom,” says Bruce Halle Jr. “We got landlocked up there in the winter in Michigan, but you can do things here year round. They traveled, they played tennis. It was really good for her.”
Although Halle had become more aggressive in his spending while in Michigan—buying a working farm and taking the family on weekend ski trips—the move to Arizona led to greater largesse on many levels. Susan and Lisa had taken up horseback riding in Michigan, and Halle bought horses for both his daughters when they moved to Paradise Valley. Halle bought Bruce Jr. his first motorcycle. Gerry and Bruce bought motorbikes to ride in the desert and joined the Foothills Tennis Club to play tennis with friends.
6 Tires, No Plan : The Impossible Journey of the Most Inspirational Leader That (Almost) Nobody Knows (9781608322589) Page 9