“It was my lucky break: ass, not class!”
Having sold my car dealership business, I am currently semi-retired, working on various property development projects.
From early childhood, I developed a drive to earn money. My dad and I lived in a one bedroom apartment, and instead of a car, he had a motorbike with a sidecar. We’d go camping, with our little old tent wedged between the bike and the sidecar, and I noticed other families arriving with cars and trailers, and bigger tents. We’d go walking and I’d note the lavish holiday homes we encountered.
All these things triggered something in me, and I became very materialistic from a young age, a trait that guided much of life – perhaps not for the best.
I chose to study metallurgy at RMIT after school because of some articles I read about people studying metallurgy and “going west, young man” – and making a fortune.
But after my degree, I didn’t end up going west.
In the sixties, Australia was screaming for qualified people in science and engineering. As a result of this, with my fresh qualifications, I got a job as a Chief Metallurgist at the Monsanto Chemicals company in Sunshine.
My job was to minimize the corrosiveness of the fractionating high temperature towers of the factory and to extend the life of expensive equipment. To do this, we measured the wear of the plant every day. We did this using gamma rays and x-rays.
In those days, not nearly enough attention was paid to worker protection, OH&S.
I was exposed to gamma rays every day of the week for years. I still believe that this was why, when I tried to have children naturally some years later, I couldn’t.
After 5 years, I was headhunted by APC, a Mobil Exxon company, to do a similar job, but on a larger scale, at their Altona plant. I did that for another 5 years.
After ten years as a metallurgist, I realized that I was on a dead-end path.
I saw talented engineers around me making impressive careers to run large divisions, companies even, and I knew in my heart that I did not have what it took to get to that level. I simply didn’t have the qualifications, nor the networking and ladder-climbing skills necessary.
I became unhappy as I pictured my future stuck in the little metallurgy lab, working diligently and productively, giving my all, and getting approximately nowhere.
I decided to go into business myself.
My friend John Ayre had created a small Land Rover business, having purchased some old stock from the Australia Army. The Army was selling off its stock in New Guinea, several thousand tonnes of ex-army Land Rovers. John put in a bid on a whim, based on the scrap price of aluminium – and to his surprise, he won the contract. He had to bring the stock over to Australia and sell it.
At that point, he ran out of money. He offered me an opportunity to join, so I recklessly mortgaged my house to the hilt to get the necessary funds, and together we started running a business called Used Land Rovers – ULR.
Once the initial stock got low, we started to attend army auctions all over Australia to buy the Land Rovers the Army was selling off, to keep the business running. We did really well from this, and the business became established.
We created a business that attracted 4×4 freaks who wanted to explore the outback, where road signs literally said ‘Land Rovers Track’.
That was the generic word for what today is known as SUV. And we were in the thick of it from the start.
As we grew, we started importing new parts from England, and with time, we partnered up with the factories to sell new model Land Rovers.
Initially, we operated from a tiny showroom and workshop. But as we grew, the showroom proved to be unacceptable to the factory that was supplying us. With one Mini-Moke on one side and a Lada Niva on the other, there was only just enough space left for a two-door Land Rover.
As for the workshop, upon inspection by the council, they were going to condemn it, as it had no natural light and shocking ventilation: we basically laid some air pipes through the walls. It wasn’t sustainable.
So with pressure from the factory and the council, we were driven to purchase 7000sqm meters of premium land in Malvern.
At the time, the banks thought us crazy, over our heads. But we knew we were on the right track.
Right through the 80’s and the early 90’s, Land Rover was seen as a niche brand, solely for obsessed off-road freaks and such. But very slowly, that image transformed. By mid-90’s the brand came into its own and became popular with the general public. By then, ULR was the biggest Land Rover dealership in the country.
The business grew so quickly, the factory demanded we open a satellite dealership to keep up with production and demand. So in 1996 bought the 4 acres in Docklands. This time not just the bank, even the factory said: Have you gone completely bonkers?
Everyone thought I went overboard.
In fact, the bank then forced me to sell some of the land off. (Two years later I bought it back at double the price, but it was worth it.)
The thing is, for me, property has always been an obsession, and intrinsically tied to business success. And as it turned out, the only automotive businesses who have survived in Australia over those years were the ones who invested in property.
By 1998 ULR was up and running in Docklands.
But the factory was right about one thing: there was too much land and not enough stock. This lead to the next phase in our development.
At the time, a Sydney-based luxury dealership Trivett, who sold Jaguars and Volvos, decided to exit the Melbourne market. They named an exorbitant price for the business, but we decided to pay it. I had to fill my dealership, and I believed I could make this work – even though I was moving the business from an opulent showrooms in City Road, to the industrial area of Docklands.
We built the two new showrooms, and in 2001 ULR was selling Jaguars and Volvos alongside Land Rovers.
From the start, John and I worked to our strengths.
John was a civil engineer, he understood far more than me about the capability of the Rovers. He focused on sourcing the parts, understanding the product. He was very good at operational side of things. We were one of the first automotive businesses in Melbourne to migrate from Kardex system to a computer system, and John managed that project brilliantly.
I was always more involved with retail: selling more each day, each week, each month.
I believed that ULR’s success was dependent on an absolute focus on customer service and sales. I learnt how to make people feel they were walking in on a red carpet.
Even before it became the norm, my best sales people were women.
I headhunted extremely capable, driven women from a variety of backgrounds: we had bankers, teachers, PHD students.
They killed the competition, the geriatric men I inherited from the previous dealerships, who’d sit there in a suit and tie, who thought they knew everything and everyone, who did things ‘the old way’. Those guys didn’t last at ULR.
My motto was, and still is: “Don’t ever employ someone for the experience, or the lack of experience in the job you want them to do. Employ them for the energy and drive they have for the job.” That has been a key factor in our success, always.
As I mentioned before, property was an obsession, and a very strong focus for me.
Throughout my life, I bought property, as much as I could afford – and sometimes more than! I’d buy without any concrete plan, just on a gut feeling.
When I was buying Docklands, people thought I was crazy. Now they come up to me and say, ‘Gary, you had fantastic vision.’ What vision? I had no idea that land there would get rezoned residential 20 years later.
What I did know was that you could stand there and nearly throw a stone into the city.
Yet, the prices in the city were ten times what they were asking in Docklands. I thought, ‘That’s odd: a kilometer from the CBD, actually a Melbourne council ratepayer, and yet such a disparity in price’.
I also knew city dealerships did the best, but I couldn’t afford the same land in Elizabeth St, or Latrobe St, even.
So I bought Docklands, and it was my lucky break: ass, not class!
The same for buildings I bought in North Melbourne: at the time, it was the arse of Melbourne, now it’s a hip residential area. Suddenly everyone wants to be there.
I know my love of property comes from that old insecurity complex, the materialistic drive from early childhood. So it’s almost a compulsion, more than strategic planning. But lucky for me, the thing with property is that it doesn’t take a lot of intellect – patience and persistence are more important. Hanging in there by the skin of your teeth, sometimes.
There were times when that persistence was the only thing to get us through.
In 1989, we had a deep, deep recession – you know, that one we had to have. Sales plummeted. Businesses were closing down all around us. Half of Australia went broke. Our Malvern property values dropped to less than the loans we had on them.
John wanted to give up. There was no way we could top up our LVR. ANZ were going to foreclose, they circled us like hawks.
I went to see a commercial QC. He asked, ‘Can you keep up with the interest payments, not missing a single day? – If you can, we have a chance in court if they try to take your business.’
I had no idea how I was going to make it.
I was extremely stressed: that was the hardest time of my career. Before recession, we were selling 30 cars a month. In October 1989 we sold one. But we had our servicing business, were still selling parts. I took out personal loans, got the money together.
We never missed a payment to ANZ.
By late 90’s we were out of the woods, the prices crept back up and the interest rates down. That’s when we went through the big growth phase, started Docklands. The early 2000’s were golden years.
Then in 2008 GFC hit.
We were already having some issues with the business, it grew fast and we lost track of our margins a bit. On top of that, my wife had just passed away, and I was left with two young sons. It felt like the nightmare of 1989 returned.
ULR came under terrible pressure, though this time it wasn’t the bank, but our financier.
All dealerships must work with finance companies. The factories will not invoice a business or an individual, they can only invoice a finance company. The financier pays for the cars, the dealership sells them and repays the financier with interest. That’s standard practice.
Our financier was BMW’s Alphera. They were hit as hard as anyone in 2008. They needed to tighten up. They said to us, ‘Sorry, we’re cutting your floorplans, we cutting the amount of money we want on the books.’
So basically, to keep trading, we had to come up with five million in cash by a certain date.
Of course I didn’t have that money. I went to the bank, but they were nervous: they smelt a rat. It was a terrible time for me.
In the end, thanks to the relationships I had at the bank, I talked them around. I made them some promises I knew I couldn’t keep at the time, but I was desperate! They came through for me literally the day of the Alphera deadline. We made it through again.
In 2012, our fortunes took a dramatic turn. Our land in Docklands was rezoned as Capital City Zone. Basically, it went from industrial to prime residential area, ripe for high-rise apartment development.
The land prices soared accordingly: we found we were sitting on a goldmine.
I was in my mid 70’s. 40 years prior to that, I painfully made peace with not being able to have children. Now I had two precious boys in their teens. They have been the unwavering bright part of my life for the last decade, yet I barely saw them while I ran and grew the business.
I didn’t want to miss any more time with them: I realized it was time to sell.
After the re-zone, offers started coming in. We spent a year with an overseas company on a deal that fell through. Then another year later, we tried again with a local company which also didn’t eventuate. But there was always interest, and in the end, a well-known Australian businessman bought ULR in 2016.
I can say the last 7-8 months have been the best period of my life. I am involved with boys, I have time to myself, there’s not weekly pressure of targets, payments, deals.
But it’s in my nature to work. I continue with my property obsession. I have an office close to home, I go there to work on development projects. Last year, I refurbished a two story building I had in South Melbourne. This year, I have a similar project in the works, plus I just got a permit for a thirty-six level apartment building.
It’s not as stressful as running ULR, but it keeps me active. I’d rather drop dead doing things, than sitting in an aged-care home!
I’ve made plenty of mistakes in my career. I used to hide from them, but now I don’t. I regret some decisions: I think if I had been more hard-nosed, more ruthless, I could’ve gone further, made more money.
These days the automotive retail industry is not the same.
I think it’s too late to get into the car business. The industry is owned by huge corporations and a handful of billionaires. You can muck around the edges, sure, but to get in and build something from scratch, I’d say is next to impossible.
I don’t see my boys following in my footsteps and going into automotive sales.
My relationship with my own father was difficult, not always good. But I know he did his best. When I first started making money from the business, I sent him on a trip around the world. It was the first time he got to travel first class.
When he returned home, I picked him up in a brand new Bordeaux Red XJ6 Jaguar. His dream car.
He asked me, “what’s this?” I told him I was considering becoming a Jaguar dealer, was trying it out. That was a lie, Jaguar wasn’t even on my radar at the time!
When we got to mine, I feigned tiredness, and asked him to do me a favour and drive himself home in the Jag. I said someone will pick it up in the morning.
When he arrived home, he found the card I left for him on the table. It said: Dear Dad, hope you enjoy this car. Thank you for everything you have done for me. He called me at 3 am that night. He said, “I can’t sleep, I’ve been the reading and re-reading the handbook!”
People scolded me for giving an old man a fast sports car, but I didn’t care. He was thrilled beyond measure. He drove that thing to Surface Paradise, criss-crossed the country in it. He died 2 years later. That was the best thing I ever did.