Mackie Hughes is the recently appointed president of MagniShield Protective Coatings, an advanced line of professionally installed, premium automotive appearance protection products. Hughes met with P&A to share the road he took towards a rewarding career in automotive and what it’s like staying ahead of the game in 2020.
Where am I reaching you today?
I am working out of my home office in Lexington, Kentucky, which is where I’ve been most of my life. I grew up here, born first in line of five brothers and sisters here, played some high school sports here, and then I got lucky enough to end up at the University of Kentucky where I studied business administration. Looking back on my time here, one of my biggest regrets is that I never actually graduated from the University of Kentucky.
Was it automotive that pulled you away from finishing school?
Not just yet. In my sophomore year of college I started a clothing business at the university, called Just Sweats. This was back in the early 80s. At the time my sister was a professional model out of New York, and together we started a small clothing store. We did our thing for a couple of years and the next thing I know, we had 23 stores throughout campuses in Kentucky, Ohio, Indiana, and Tennessee.
That venture was incredibly eye-opening. I think I learned more in the first month of running a business than I did studying during my first two years of college. Now don’t get me wrong, it was well worth it to have the college base, but the act of negotiating leases for properties, working with clothing manufacturers — all those kinds of things that go along with running a business — it was rewarding to say the least.
Eventually, we sold those off, and I remained in the clothing business until my mid-to-late 20s, until the day I met a car dealer.
As a guy in the clothing business, how did you cross paths with a dealer?
I was very fortunate that one of my younger brothers was a GM for a Jeep store here in Lexington. The owner of the dealership, Paul Cleaver, took an interest in me — said he liked the way I did business. One thing led to another, and he basically created a position for me at his Chrysler store, with CustomerOne. Some people might remember, that at the time, Chrysler had a program called CustomerOne. Essentially, they were trying to enhance their CSI scores, so they were actually paying dealers bonus money based on CSI scores. Paul Cleaver saw that as an opportunity and wanted me to run the program like I ran my clothing stores, with the goal of increasing their CSI scores.
Four months later, I was doing F&I, and after about a year, I was one of the lead finance guys, and I ended up at Paul Miller Ford in Lexington, where I was the top F&I manager there for a couple of years. Following that, I was a GM of the Ford Mazda dealership with Paul Miller Ford. I was fortunate that that location was a Pat Ryan store, and so a Pat Ryan exec, Dan Moet (who I would now consider one of my mentors), approached me about repping for Resource Automotive Group in the Kentucky/Indiana/Ohio market. I ended up moving into that space, and the rest is history I guess.
When you took that first job at Chrysler, did you ever imagine it would become the foundation for a lifetime in automotive?
You know, to be honest with you, I did not. I knew the car business was fast moving and that they paid aggressively. I think a lot of people get in the car business as a salesperson thinking that it’s just a job, not a career, but they get hooked on it because the pay can be somewhat lucrative if you shine. Following my stint with Resource Automotive, I went to work for two guys named Don Jacobs and Joe Minor, who ran something called the MILES Program, which stood for Military Installment Loan and Educational Services. I joined their team as a national sales manager and we provided automotive loans for military service members all across the nation. So I was the car guy, and they were the end roads to the military and to the bases, and we took off from there. I had 23 regional managers I was responsible for, mostly all retired military personnel. That eventually led to me meeting Mark Trahan at Simoniz, and I ended up going to work for Mark and Bill Gorra, where I stayed for 16-plus years.
While you were at Simoniz, you worked your way through a multitude of positions. Did you depart from the company with new skills or an altered outlook in regard to your career?
I think the biggest thing I learned was consistency and being true to your word. When you go out and you meet someone, you have to make them believe in the product you’re selling — that you’re going to back that product up and help them in the event there is a claim or an issue with whatever it happens to be, and that you are going to be there to support that endeavor. Time management is another big one. I work from home, like most people do today, but you still need to get up and you have to go to work. You’re responsible for your successes in life, and you need to be consistent — go out, knock on doors, make phone calls, follow up, follow up, and follow up. In this business, it can take you four or five years to finally score, because some of these TPAs, agents, or large dealers already have relationships, and you just need to be there when the ball gets dropped. So stay consistent with your message. If I could share one thing, it would be to not get discouraged when a prospect says no. You still need to turn around and ask that next question, which should always be, well do you mind if I follow up with you in three months and then six months, and just consistently do that, so when an issue arises, they know you’re there to step in and take over.
You mentioned staying true to your word as one of the pillars of success. The automotive industry has historically been stereotyped as being dishonest. Do you think that stigma still remains true today?
I think consumers have always been leery of the automotive environment, and one of the reasons for that, and something I’ve always laughed about, is the thought process that car dealers make so much money on the sale of the car. If you think about it like I did in my clothing days, I would buy a shirt for $25 and I would put it on the shelf for $59, so there was a high markup. To a dealer, a car may be $20,000 with only a small margin of markup so there’s not a whole lot of money to be made. It’s obviously not the same, where you’re making $1,000 on a car deal and $25 on a shirt, but the difference in percentage is what scares people away. I do think that car dealers have gotten much more customer friendly with digital retailing and the ability to utilize different services where you can reach out as a consumer prior to walking into a dealership and have some knowledge of what the car costs and knowing what may be thrown your way during the transaction. So it makes it easier, and good dealers are reaching out and being able to provide good service and good products, and standing behind what they represent.
We’ve all heard the horror stories, but I just don’t think that happens anymore in the car business, especially in new car franchises. I don’t think the big players put up with that anymore, especially from a CSI standpoint. It’s becoming much easier, with Carvana, Vroom, and all those other companies out there, that consumers can now use to educate themselves and feel more empowered, and walk in and be more knowledgeable about what they want to happen with that particular purchase. [In terms of digital retailing] I think there is room for improvement from a dealer-standpoint, and for TPAs and providers and vendors like myself, to provide a more open claims process, an easier claims process. There are some really interesting things out there in the marketplace today that are being driven by some of these companies that are streamlining that process.
You recently became president of MagniShield Protective Coatings. Congratulations! How is that going so far?
Making a career move at this level and in these times was a very serious decision. And then there’s the learning curve —different people, products, culture, and more. But I feel very fortunate and am humbled to be a part of the team. MagniShield is a division of the OmniShield group of companies. Our ownership and management team have literally hundreds of years of combined retail automotive experience and success. Probably the greatest change for me is the company’s willingness to change. For example — and I found this incredibly refreshing — their philosophy is to provide dealers exactly what they want, as opposed to what we already have. In other words, if a dealer wants a term or a particular type of coverage that none of our existing contracts offer, we’ll write that dealer a new, customized contract to their exact specifications, and generally have it ready to present in one business day. Now that is different.
What was it like starting with a new company in the midst of the pandemic?
Well MagniShield isn’t a new company, it’s just new to me. But yes, the pandemic has led to challenges for us all. The automotive industry, specifically from an F&I standpoint, was already pretty chaotic in my opinion, but not in a bad way. There is so much consolidation with smaller F&I companies that are selling out to the big players. I think there is room to step in, help those organizations, and provide them with new cutting-edge products. Product warranties are not going to go away because they do satisfy various otherwise unmet needs and create chargeback-free income streams. In an ancillary environment, the ability to sell a bundled program or the ability to sell a paint and fab program without the fear of what a chargeback may be six months, a year, or three years down the line, is very inviting and enticing to a dealer.
In addition to new products and programs, there are opportunities in reinsurance, opportunities in retro programs, and opportunities in many other facets of our business. Like I said, I am very excited about where we are and where we’re heading. It seems that most TPAs are trying to be one-stop shops for everybody. It used to be they were service contract providers, then they put GAP into their lineups, then they put in Etch, and then came tire and wheel. Now it seems like they are reachingout to chemical providers and trying to present their own private label type programs. One of the key factors that got me so excited about MagniShield is they know exactly who they are. They aren’t trying to be, nor do they want to be, everything to everybody. We want to be the very best at one thing: appearance protection. And I think we are well on our way.
Switching gears to another hot topic of 2020. We are getting closer to the presidential election, how do you think this may impact business.
Well I think we want to be very pro-business. I see things on LinkedIn and I shake my head that people voice big opinions about certain things on a platform like that. In a business environment, that’s a very dangerous situation. I think a lot of dealers are pro-business, obviously, but I just wish there was more of a bipartisan atmosphere of working together. If we can find that solution where everyone crosses the line and shakes hands, it’s going to be better for our economy, better for our people, and better for the United States to grow and to prosper and be considered a power. Not that we are not a power now, but I do think there is room for improvement when it comes to how we do business, whether it be domestic or overseas. It really is a melting pot now no matter how you look at it. It’s pro-American, build American, sell American. I’m a firm believer in that, but even with foreign manufacturers, a lot of those vehicles are made here in the U.S. They may be foreign companies, but they provide jobs, incomes, and tax revenue for those particular markets. I sit here in Kentucky right next to one of the largest plants in the country, which is the Toyota Georgetown location. That plant supplies 10,000 to 15,000 jobs in this market, which is massive amounts of money, and then it gets spent in this market. We need to make sure we stay very proactive in keeping America on the path to being self-sufficient and supporting our local businesses.