Dick Sweebe of Diamond Companies is the 2009 Truck Dealer of the Year
From a career at International Harvester to the purchase of two factory-owned locations through International’s Dealcor program, to today’s 11 full-service sales and parts facilities, Dick Sweebe, president and CEO of Diamond Companies, exemplifies how much you can achieve if you work hard and take advantage of opportunities.
“I often look back on these last 26 years and wonder how a farm boy from Ohio, who started with nothing and knew nothing, could have had this good fortune. I am living the American dream,” says Dick Sweebe, president and CEO, Diamond Companies and the 2009 American Truck Dealers Truck Dealer of the Year.
Successful Dealer recently spoke with Sweebe about a wide range of subjects. Here are excerpts from our exclusive interview with him.
SD: What has business been like this year for Diamond Companies?
Sweebe: Our year starts in November and as a company we are ahead of where we were last year, but it doesn’t feel like it in terms of sales and profit. The reason for the improvement is because profit improved on our leasing results. We had struggled with leasing in the past. So we have a head start, but I am not sure we will keep that going. I think we are going to start falling a little further behind. Used truck sales are really slow. Service has slowed down. We had a week or better backlog at this time last year, we now are down to two or three days in some shops. With parts we are where we were last year and International has taken some action by introducing its PartsSmart program.
SD: What are you doing to stay afloat during these tough times?
Sweebe: We have done a number different things in reaction to the market conditions. We have a hiring freeze and we are not giving any salary increases. In addition, we have made some personnel reductions as well as reduced the number of hours worked by some employees. We have looked at all aspects of the business to see where we can make cuts. We, the industry, and certainly our company have had a pretty good run going back to 2001, which was the last time we had bad conditions and you get a little bit bloated in good times. You don’t try as hard to control expenses when times are good. We also are increasing the frequency that we talk with our managers, but we are doing that more via conference calls and Web conferences rather than face to face.
SD: What are your short-term and long-term concerns?
Sweebe: Short term we are concerned about making sure we keep our cash position good and stay on top of receivables. Also we are trying to keep our people focused on continuing to call on customers and service them. My concern long term is the vertical integration going on within our industry. All manufacturers and all dealers are faced with that happening to them. We never have had that to this extent at International before and you get concerned about how that is going to affect me long term. On the heavy-duty side, we have not had it where the only engine we have is our own engine. And although I think we are going down the right road, I did a tremendous amount of work, and still do with Cummins Engine Co. It concerns me about what happens when I no longer offer that product and no longer have that line of engine. And quite honestly the road we are going on, which is EGR as opposed to SCR, I think is right, but what if it isn’t? What if it doesn’t work out the way they say it will?
SD: What was the toughest business decision you have had to make?
Sweebe: I suppose when I really started to expand, when I first made that decision to grow the business. At the time I had been a dealer for about 13 years. I had reduced a lot of my debt, the business was going pretty good. I won’t say I was sitting in a rocking chair, but things were going along pretty well. I had a handle on what was happening, and I wasn’t involved in doing a lot of traveling because of my business. Then when I decided to start expanding, my world basically turned upside down. Now I had taken on a lot of debt, new markets that I didn’t have the knowledge of, that we weren’t doing very well in, that had facility issues, that were in towns I could not get to and back in a day. And you have to say to yourself, “Why are you doing this?” You do it because you think you want to acquire more. My wife says, “How much can a hog eat?” I want to offer more opportunities and you kind of think you have to keep up with the Joneses, but at the same time you ask yourself, “Do I really need to do that? Is that really necessary?” I was doing pretty good and thought if I just sat here and behaved myself, I would make a nice living and have a good lifestyle and everything would be fine. When I made the decision to jump off into the deep water, there wasn’t any turning back. Then it just kept mushrooming.
SD: What was your best business decision?
Sweebe: Probably that. Clearly the enterprise has grown to be very large. My primary location, I started in Memphis, which is where I am now, and the Memphis market has changed a lot since 1995. A lot of the major players that were here in 1995 are not here anymore. My market has changed and it is not near the market that it once was. Had I not expanded, I do not know that I would have had quite as good a lifestyle or as easy a time of it. I may not have survived if I had stayed as a single- location dealer. And when I look around at the people I am competing with, everybody in town except one is a multiple location dealer and that guy happens to have other businesses to support what he is doing. So I don’t know that I could have survived without expanding
SD: What was your worst business decision?
Sweebe: Listening to some lawyers. The first acquisition I was in the process of trying to make, which was before the one I actually did make, the lawyers screwed it up for me. And had I done what my gut told me to do I would have gone ahead and done the deal and there wouldn’t have been any problem at all. They convinced me that I needed to do some things in terms of due diligence that caused the seller to get cold feet and back out of the deal. Another guy came in and bought the dealership. It still is a nice market. It has been a good performing market throughout everything that goes on and I still regret it. It cost me a market and sales and the profits that went with it. At the end of the day you can have all the attorneys and consultants and everybody else telling you what you ought to do, but you have got to make your decision yourself. And if you aren’t savvy enough—and I wasn’t at the time—and you rely too heavily on those people—and they don’t know your business and don’t know you—you probably are not going to make the — right decision a lot of the time.
SD: What gives your dealership its competitive edge?
Sweebe: The competitive edge is the people you surround yourself with. I know you hear that from everybody, but I think I have a good management team particularly where I started in Memphis. Many of the people who are here have been with me more than 20 years. I am a pretty loyal guy. I tell everybody I am kind of like a goose, I am pretty well mated for life with whoever I am with as long as they do right by me. I think most of these people have. I feel like I work hard. I think I use good common sense. My parents instilled in me a good set of values and all of those things are what I fall back on each day as I go through my work life. I am not an over the top religious guy, but I am religious and I do believe in the golden rule. I think all of those things are rolled up together. If you treat people fairly, they are going to do it back to you. You try to be the same guy all the time and take care of people the way you would like to be taken care of. That has worked pretty well. And I have tried to have a long-term goal in terms of I want to do this for a long time. I have never been one of these guys who says, “I don’t want to work until I am beyond the age of 55.” Or “I am going to quit when I am 60.” I am going to work as long as I feel like I am productive and as long as I feel like I am contributing and I enjoy what I am doing.
SD: What do dealers need to do to continue to be successful in the future?
Sweebe: Dealers are going to have to depend on their own actions more than on the actions of their manufacturers. They are going to have to fend for themselves. There was a day when the manufacturers did everything for you. They’d send you an open house in a box, complete with the invitations and everything else. You know what? Those days are gone. They can’t afford to do that. They can’t afford to support you in that manner and we can’t afford to have them do that either. We are businessmen. We have to hold them accountable and they have to hold us accountable for performance and results. That is the way it should be and if we don’t perform, then they need to tell us about it and take whatever actions they need to so we do. And that works in reverse as well. If they do not perform and provide us the goods, services and products we need, then we have to do what we need to do to take care of our customers. It doesn’t mean that we don’t want to have a good relationship. There still needs to be a lot of loyalty between the two of us, but we have to act more like businessmen in the future, independent businessmen.
SD: What do you know now that you wish you knew when you were first starting out as a dealer?
Sweebe: I guess the bigger question is what do I need to know today that I don’t already now. There is nothing that beats experience. I became a dealer when I was 32 years old and I was convinced I knew pretty much everything that I needed to know. It did not take me a real long time to find out I didn’t know squat. And I have relied on and depended on dealers who were older than me to guide me. They were mentors of mine. I recognized that those guys knew what the heck was going on and so I depended on them a lot. I wish I had had the experience then that I have today, but you just can’t. I wish I had recognized that I didn’t know as much. I wish I had been a little more patient. But I don’t really have a lot of regrets on what has happened to me. There are some things I wish I had done a little bit different and there are deals I wish I had gotten, but in the big scheme of things I really don’t have a lot of regrets. I wish I had gone about some things differently but my life turned out pretty good for me and I am happy with the way that it has.
I am just fortunate. Who would ever have thought that Dick Sweebe coming from where I came from with no more than what I started with, with no more experience or backing or anything else would have had the opportunities that I have had. I am thankful that I have had the opportunity that I have had and I try to make the most of it and I will continue to try and do that. Hopefully I can give somebody else the opportunity, whether it is my son or daughter, or somebody else’s child. The way you give something back is to do for somebody else what someone did for you. I may not be the sharpest knife in the drawer, but by golly nobody was going to get there earlier or stay there later if that is what it took and so that’s part of it too. I am happy with the way things worked out. If I had it to do all over again, I would do pretty much the same things.