Jim Fitzpatrick: 0:04

This is Driving Solutions exclusively on CBTNewscom. Hey everyone, Jim Fitzpatrick, Thanks so much for joining me this morning. You're watching another edition of Driving Solutions right here at CBTNewscom. Today we're discussing how OEMs, dealers and fleets can collaborate to build a stronger future. Commercial vehicles are more important than ever before in both sales and service. So if you're not involved with these work trucks and vans why not? You're missing out on a lot. And even if you are already in the commercial department division, I should say then you should still listen to today's conversation. I think you're going to be glad you did.

Jim Fitzpatrick: 0:41

So we're joined now by Kathryn Schifferle. You've seen her here before on CBT News. She's the Founder and Chief Vision Officer at Work Truck Solutions. She's joined by Jim Press, who you've also seen here on CBT as well. He's the former President of Toyota North America and President Vice Chairman of Chrysler and Senior Advisor for Work Truck Solutions. Both Kathryn and Jim bring a wealth of experience and insights to the automotive industry. So thank you, folks, very much for taking the time out of your busy schedules to join me here at CBT News. I very much appreciate it. So, Jim, let me jump right in here. We're seeing an increased OEM support in the commercial vehicle space. What's driving this momentum and why should dealers, especially those from the retail side, be paying attention to this taking place right now?

Jim Press: 1:31

That's a good question. I appreciate the opportunity, Jim, thank you very much, and it was nice for you to name your network for our program, the Commercial Big Trucks.

Jim Fitzpatrick: 1:44

CVT, that's right.

Jim Press: 1:45

CVT, and that's really what it's about. You know, over the last decade or so especially the Detroit 3, have eliminated product lines that weren't as profitable and sort of left the car business to those that have other very good vehicles and production sources, and so they've begun relying more and more on trucks, suvs, for their income. And as you go forward now, with the more competitive retail world and the fact that affordability is the issue we're all facing in the industry and a limit to the number of pickups that are going to be sold at retail, the commercial business is really the best avenue for them to add additional production, and commercial trucks for the OEMs are very profitable and it's a market that's driven by business, not retail. And so you've got a different clientele that has repeat business fleets of trucks and a very different environment. But also to become familiar with business to business and to open up commercial sales to the dealers that aren't in it now to expand their profit opportunities, that's right. So I think a number of things have come together at the same time.

Jim Fitzpatrick: 3:14

Yeah, for sure, Catherine. I see you shaking your head there. Did you want to add to that?

Kathryn Schifferle: 3:19

Well, I love B2B Jim, as you know, love b2b jim, as you know, and thanks again for having us, because, um, it is a way for um, a I would call it a logical relationship. Businesses are always looking at um some vendor or partner, right yeah, who will be there for them and that will help them get up every day and do their job, and dealers are in the perfect place for that. If they, if they just do a little bit more in that relationship. And I don't know, nobody's really talked a lot about loyalty lately. I think on the retail side loyalty has become less of a conversation, but in commercial, it's huge, it's a huge opportunity.

Jim Fitzpatrick: 4:08

No question, We've had that conversation a number of times and there's no question about it. Behind every truck owner or company that needs trucks, there's a family that needs vehicles that's going to be purchased from that same dealership as well, as well as service and tires and everything else. But how does collaboration drive success? And I'll start with you, Jim.

Jim Press: 4:29

Well, collaboration is essential in this segment, more so than even retail, because you've got a produced vehicle that has to match the specific needs and application of the business yeah, brains or dump trucks or cement trucks or whatever they are and so the relationship to the dealer and the upfitter has to be a chain of production coordination, and that's the most important. And then the second piece of it, I think, is that the knowledge the OEMs have and the systems and tools they have to help dealers transition from a retail focus on a transaction to the commercial that's focused on relationships, and that process is taking place. You put the two together and I think that's feeding a lot of programs that all the OEMs have. Catherine has been excellent working with all three of the Detroit OEMs and some others in allowing us to be sort of a part of the toolkit that they have to put those programs to work in the dealerships.

Jim Fitzpatrick: 5:40

Yeah for sure. Do you want to add to that, catherine?

Kathryn Schifferle: 5:43

I don't think a lot of people don't realize that these businesses, if their vehicle is down, they're losing $2,000 to $5,000 a day just for a local business. If it gets into bigger companies, it's even more than that, and so that's what drives their loyalty and their needs.

Jim Fitzpatrick: 6:03

Sure, sure, Kathryn. What are some of the workaround, creative workarounds and solutions that you've seen from dealers as they navigate the challenges that we see in today's market?

Kathryn Schifferle: 6:15

I think that one of the things that I've recently become very aware of and it's not like I didn't understand it before, but it's as you start diving deeper, you start realizing that the end customer can be categorized in three big buckets, big fleet, which of course the process for serving big fleet is different. Dealers can be involved in that, but it of course, is more directed by the OEM and sometimes the large upfitters right, but there's.

Kathryn Schifferle: 6:51

We're seeing some dealers that have become experts at that. On the other side there's government and government fleet and that's different, but we are seeing dealers that have become experts at how to navigate those types of relationships and generate. All of these, by the way, are very profitable. And then, of course, the third, which is that local small to medium business that gets up every day and, you know, does things in your community. I think all three of them. I've been watching dealers who have been kind of, you know, kludging together ways to make it happen, but we're looking at ways to make it efficient and to make it more process-driven.

Jim Fitzpatrick: 7:40

Did you want to add to that, Jim?

Kathryn Schifferle: 7:42

Yeah, maybe a couple of things. One of them is different ways of financing Businesses, in particular commercial vehicles. It doesn't go through the normal retail filter for financing, and so the dealers that have found those solutions have been able to accelerate, and also with the OEMs, working with them to get the right inventory, the right ordering systems. And especially with the new transition to electric vehicles, this is even more important and it's making the distribution channel more efficient for the dealers and the OEMs so that vehicles can be sold before they're actually built. And then another part of it is education, and that's where a lot of that is work. Truck solutions and Catherine's comes together, where we have a toolbox for dealers to use to transition from retail to commercial. That, more than that, we can help educate their folks to become powerful in this segment.

Jim Fitzpatrick: 8:43

Yeah, that's been the key, I think.

Kathryn Schifferle: 8:46

Yeah, and I wanted to jump in there because, although we're a software company, we are half software and half customer facing. We know that this isn't the dealer's area of expertise, so they require more than just we plop some technology in their lap. This is about understanding business to business. This is about helping them groom their team to become partners and consultants.

Kathryn Schifferle: 9:20

That's right, and so you know, as Jim pointed out, that's a really important part of what we're doing. We're doing webinars for a lot of the OEMs and you know we're doing special projects with some of the bigger dealer groups and, I would say, any dealer out there that is interested in understanding kind of the broad look at the business. We've got a playbook, we've got webinars that they could watch if they want to see how dealers have solved a particular problem. We're definitely there for anybody that wants to lean into it, there's no question.

Jim Fitzpatrick: 9:57

In fact, I had the pleasure of speaking to one of your clients at NADA this past year and he shared that same sentiment with me about work truck solutions, in the sense that it's not just a software but you're down in the foxhole with the dealers showing them exactly how this is to be executed and how it runs successfully, which I think in a lot of cases, as an ex-dealer principal myself, that is a big thing to take on. So they have to have that lifeline that they can hold on to until their team feels comfortable enough to go. Ok, Kathryn, Jim, we got it and you're just there for support as we need it. But that to me would be a very, very valuable asset. You know from your company.

Kathryn Schifferle: 10:40

Well, and then we look at we learn so much from our dealers. Like I mean, every dealer is kind of unique and we want to make sure that they can do things the way that that's important to them.

Jim Fitzpatrick: 10:53

Sure.

Kathryn Schifferle: 10:53

And so that's part of that relationship we have.

Jim Fitzpatrick: 10:57

Speaking of collaborating and working together. Both of you hosted different sessions at Work Truck Solutions' recent Spring Commercial Vehicle Business Summit. What were some of the key takeaways for the audience?

Jim Press: 11:10

I'll throw it. I'll start a little bit there. I've got a belief, after watching the evolution of the retail market and the opportunities that I've learned with Catherine, that the commercial business segment is going to be an important profit center to dealers in 10 or 15 years, sort of the way F&I grew into that situation. You know, 10 years ago it was somebody from the bank was helping them write deals and now it's an integral part of every dealer's operation and a private contributor. So I think that's probably one of the things that we talked about, and the other one really is the need for dealers to commit and focus. It isn't just to say I want to go after those customers, but they have to get the people, the systems and make a commitment for the inventory to be able to really get into that business, because the customers, the business users, they know who the pretenders are and who the real operators are.

Jim Fitzpatrick: 12:08

That's right.

Jim Press: 12:09

You've got to really separate yourself in that regard.

Jim Fitzpatrick: 12:12

Yeah, for sure, Kathryn. Did you want to add to that?

Kathryn Schifferle: 12:15

Well, I have to say Jim's sessions are the most popular, so he does a great job. We call them his fireside chats and they're really phenomenal. I get the fun thing of you know the first day talking kind of about where the industry is and the second day kind of going crazy. I would like to say that all of the sessions are up on YouTube on our YouTube channel and.

Kathryn Schifferle: 12:41

I recommend that people take a look at that and, you know, kind of look through and see what it is that they might like to learn. We are our October one is already scheduled. Our fall one yeah, it's the concept that this is a whole, entire ecosystem. It's a business where that collaboration from each of the different stakeholders is really important. So we should talk about it twice a year?

Jim Fitzpatrick: 13:07

Yeah for sure. No question, Jim, you know. Of course, a subject is still in the minds of everyone, and that's the continuous shifts and changes Tariffs. 2025 has been a little bit of an up and down year so far, but what do you say when somebody asks you about the tariff situation?

Jim Press: 13:30

Well, my first advice is real simple, and that is avoid the news, not your news, not CBT news, but that other media. But you know, don't watch all the news channels, watch sports on TV or something else that's of interest. The reality is, nobody knows. The forecasts that come out are normally sort of worst case, because they're trying to lobby against something and it doesn't really matter at the dealer level because the dealers are going to have the same strengths from the OEMs.

Jim Fitzpatrick: 14:03

The.

Jim Press: 14:03

OEMs are the ones that see tariffs as a cost, and it doesn't mean it's a price increase. It's a cost in the transfer price between the import production cost and the US tariff cost, and that's something the IRS coordinates with every OEM all the time. Anyway, it's a much smaller base, and so what I see is that the dealers that are overreacting and trying to read into all that are going to fall into a rabbit hole. The thing you need to do when challenges like this occur and you've got to remember this affordability issue, the interest rates, there are a lot of dynamics in the market and some consumer uncertainty is keep focusing on the basics of your business that made you successful.

Jim Press: 14:52

Don't let it pull you off.

Jim Press: 14:54

Worry about taking care of your customers and your people, educating them. That's right.

Jim Press: 14:59

And nobody can be, as dealers are at finding creative solutions around things, and we're seeing that. We saw that during COVID, I know, and we're going to see it now. There are going to be inventory shortages, some vehicles that are not profitable are going to go away. There are going to be some increases in price. So you've got to look at creative ways of bringing in customers. Putting together finance programs, putting together comp programs, selling what you have all of the stuff you do best and forget about all this other stuff. It's going to take care of itself. You'll determine how you do versus your competitors.

Jim Fitzpatrick: 15:37

That's right. That's right, Kathryn. We interviewed Senator Bernie Moreno, who, as you probably know, was a car dealer for 20 years of his life before he got into politics, and he said that the topic of tariffs is a blip on the radar and we won't even be talking about it this time next year. You think he's right about that.

Kathryn Schifferle: 15:57

My favorite quote that I've seen recently is the elephant keeps walking while the dogs are barking.

Jim Fitzpatrick: 16:07

I hear you, I hear. Let me ask you this, though, Kathryn this is interesting because if I were a dealer today and I was thinking about getting into the fleet business, I would think to myself you know, consumers might be swayed one way or the other on the increase of vehicles right, if there is a tariff situation, or what have you. However, if I've got, you know, 25 plumbing trucks out there and they need to hit the road and those things are aging quickly and getting up there in mileage, I don't have the luxury of waiting. I've got to get those vehicles on the road and keep them running. This almost seems to be somewhat of a safeguard against any kind of an increase like this, because that business owner doesn't say, well, there's tariffs, I'm going to sit on my hands and not buy. No, they don't have the luxury to do.

Kathryn Schifferle: 16:54

That owner doesn't say, well, there's tariffs, I'm gonna sit on my hands and not buy no they don't have the luxury to do that they can't right, and during covid we had to hustle and try and find used vehicles that businesses would have never purchased before. I don't think it's going to get that crazy, but I do think that, um, you know the other part of what's happening now, and I have another quote, if you don't mind, which is you can't fish in clear water. I mean all the stuff that's going on right now that everybody's crazy about somebody's figuring out how to utilize that.

Jim Fitzpatrick: 17:27

That's right.

Kathryn Schifferle: 17:28

We're happy to help dealers say now is the time. Now is the time for you to lean into it and figure out in your market who you need to be positioning with and kind of get that process going and understand so that as things shift you're out front, you're being seen as the one providing those solutions. By the way, every time a business is shopping, they may be shopping for five trucks.

Jim Fitzpatrick: 17:56

That's right.

Kathryn Schifferle: 17:56

So it's very much. It's different. It's like flipping the retail where you've got, you know, you have to have a hundred leads to get, you know, a couple whatever's. And then here it's like, well, you got five leads, well, they're going to turn into 25 vehicles or something like that.

Jim Fitzpatrick: 18:11

You know one way or another. Yeah, no, no question, no question about it. So, listen, before we wrap up, I want to get some final thoughts for the dealers that are watching today and the managers that are watching today, and I'll start with you, Jim, what are some of your final thoughts? And then maybe, at the end of that, give us the next five years and your prediction for commercial vehicle sales, your prediction for commercial vehicle sales.

Jim Press: 18:33

Well my final thoughts are that business as usual, the retail business is going to continue to become more competitive and dealers have to move beyond just being a seller into mobility, and the commercial business is the doorway for many dealers to move into mobility and recognize the value of lifetime customers real income they can depend on through loyalty and in their fixed operations, as well as doing business with creative ways of sharing assets. And so I think that this is the beginning of a transition that a lot of dealers who are adapting to commercial are finding. It's also a pathway to the future for the whole operation.

Jim Fitzpatrick: 19:20

Yeah.

Jim Press: 19:22

And the other element is that mobility means not how many cars you sold, but how many cents per mile driven by your customer base did you keep, that's right.

Jim Press: 19:36

And that's a different way of looking at the business, and so in my mind, in terms of five years from now, that, as that occurs, our dealers are going to become bigger operators, more involved, with different sources of profit, maybe even letting customers that need to have flying vehicles, like Joby the employer dealers may be having an opportunity to take your share of those. That's right. It's the most exciting time I've ever seen in the business, as well as with all this technology and AI that's going to revolutionize the efficiency and how we do business. So that's right. I envy you, young folks, in being able to usher this in, and Catherine being able to do that.

Jim Fitzpatrick: 20:28

Who's he talking? We've got to leave the flying car to our friend Tim Jackson, though he's going to go out and set up a network of dealers for sure of flying cars. But so, Kathryn, how about you Final thoughts and maybe your predictions for commercial sales in the next five years?

Kathryn Schifferle: 20:44

Well, I love that Jim has so much deep understanding of the auto industry. I look at some other models. I look at you. Remember copy machines when you used to buy your copy machine and then what it turned into. Like Jim said it turned into, you paid so much per copy because somebody was taking care of it for you and I think that that really has a lot of potential because life is getting more and more complicated and you know, dealers have an opportunity to put more out there to their customers that help them deal with all stakeholders that are in the supply chain and the customers, all you know, dependent on the improvement of technology. I love technology for what it can do for people, not just for, you know, it being there, and so that's what we're here for. We're here to help. If anybody in that whole ecosystem ever has ideas or pain points or whatever, we're here to talk about that they should reach out to me, no question about it, and dealers that are watching.

Jim Fitzpatrick: 21:58

You've heard me say this maybe a few times before on CBT News, but I mean it this time. So listen to me. You have to check this out. This is a no brainer. There are a few times that I say that in my 12 years with CBT News, but this really is one of them.

Jim Fitzpatrick: 22:15

The time has come. Step up, do the right thing, make the phone call Kathryn and and Jim and learn more about this. You owe it to your team, you owe it to your family, you owe it to your bottom line. So this is, without a doubt, the future of the business that you need to be a part of. So Kathryn Schifferle, founder and chief vision officer at Work Truck Solutions, and, of course, Jim Press, senior advisor to Work Truck Solutions, thank you so much for joining me on the show Once again. We're going to get the word out there again to these dealers. I'm going to wake them up. Anybody who wants to give me a call directly. I'll give you my personal take on this, but I'm telling you owe it to yourself. So thank you so much, folks, for joining me on the show. Really appreciate it.

Jim Fitzpatrick: 22:54

Thank you. It's great to know you Thanks for watching Driving Solutions exclusively on cbtnews. com.