Driving Change

Tedros Mengiste, MBA ’08, is the former brand manager for the Ford Escape. Now he’s steering a new course as head of L.A.-based Galpin Auto Sports.

Tedros Mengiste, MBA ’08, has a lot of experience helping fix things that have gone awry. He spent more than 13 years at Ford Motor Co., enjoying the profitable years when the business expanded at a rapid rate, weathering the tough times surrounding the crash of the American auto industry, and helping propel the company’s recent resurgence. In July he left Ford but stayed in the family when he became head of Galpin Auto Sports, a division of Galpin Motors. The suburban L.A.-based Galpin has been the top-selling Ford dealership by volume in the world for the past 20 years and now is enjoying the opportunity to leverage its brand and grow its business due, in part, to a streamlined dealership network.

Mengiste’s new role may be in a different operation, but he says it gives him the opportunity to apply the lessons learned at Ford — namely the need for tight focus. When Mengiste came to Ford, the company was riding high on its success in the sport utility and truck markets. Although the firm’s overall market share was declining, Ford was “selling everything we could build,” which made managers from the top down confident that such products as the F-150 truck, the Expedition, and the Explorer would keep the company profitable. The company rode its success to acquire such brands as Volvo and Land Rover — moves Mengiste says were nearly fatal because those acquisitions diverted focus and investment from the Ford brand. “Land Rover was like a cool, shiny toy that you decide you want but that ends up derailing you from your core business. It becomes a hindrance or distraction to your greater goal if you don’t have a solid, strategic, well-thought-out plan for why you should have it.”

Bottoming Out

Then the bottom dropped out of the American auto industry, fueled by the economic meltdown as well as plummeting consumer demand for expensive, large vehicles like trucks and SUVs. “That was a very loud wakeup call,” Mengiste says. “We were way too dependent on a couple of key vehicles to sustain the whole company. We might as well have been Ford Truck Co. at that point.” Mengiste, who had been involved in aspects of marketing for both the F-150 and the Explorer, became attached full time to the Escape, a move that mirrored the company’s shifting priorities. “The work that management did back then to start diversifying Ford’s portfolio by investing heavily in the product pipeline is showing results now,” he says. Mengiste assumed responsibility for both consumer and product marketing for the Escape, making him one of few people within the organization to serve both functions for a nameplate product. Each month, the Escape is ranked at or near the top of its segment, making it “a fantastic current product to work on while also developing its next generation.”

But success didn’t come easy. Mengiste endured “really, really tough times” at Ford that included massive layoffs and budget cuts. Despite the negative press that Ford — and the Big Three in general — were getting, Mengiste says that at that critical juncture, Ford’s management began doing a lot of things right. “We were reinvesting in products and becoming laser-focused on what it would take to lead in those segments we chose to compete in. I learned that you need to have a solid, well-thought-out plan, stay focused, and work the heck out of it, regardless of what others think. You must be confident you’re doing the right thing, even if you’re not going to see it pay off today, tomorrow, or next month.”

Full Speed Ahead

For Ford, the payoff is now, bolstered by the company’s refusal to accept the government bailout of the auto industry. “It was a great marketing platform for the company,” Mengiste says. “People everywhere were struggling, and no one was giving them a bailout. So for Ford — which has always been seen as a family company — to say it was going to fix itself the old-fashioned American way, by pulling itself up by the boot straps and working hard, really resonated with families who were having to do the same thing.” Mengiste acknowledges he sat in plenty of meetings where nervous managers thought the payoff was too slow in coming and they should revert back to previous practices. “I give a lot of credit to the team at Ford: They stayed true to the plan and made it happen,” he says.

In his new role, Mengiste has been tasked with providing that same laser-focus to GAS, which does vehicle customization for clients who want to put a personal stamp on their automobiles. GAS is the perfect place for Mengiste to get his feet wet as a member of the Galpin leadership team, while meeting an immediate need for the organization. The division was created in response to MTV’s desire to base its show “Pimp My Ride” — highlighting the custom car industry — at Galpin. Although Galpin had been doing such work for more than 50 years, much of it was done at the Ford dealership. The opportunity to host the show led to the creation of a stand-alone customization shop, Galpin Auto Sports.

“The awareness provided by ‘Pimp My Ride’ has been a great springboard to launch GAS into the next phase of its growth,” says Mengiste. “It’s a tremendous opportunity to be leading the team that will make it happen.” Like his tenure at Ford Motor Co., however, the opportunity also presents inherent challenges, especially in marketing and strategic growth. “Operating GAS during the life of the show was different in some respects from what needs to be done now. In many ways it’s no different from the challenging business cases I studied and proposed recommendations for at Ross, but now it’s real life and real dollars,” Mengiste says.

Customizing Operations

The role has Mengiste deep-diving into all aspects of GAS — including scrutinizing financials, revamping the brand strategy, and analyzing customer and industry trends. He also is spearheading the development of a detailed business plan. “I’m having all members of my management team propose strategies for their departments, and we all review their financials, forecasts, and performance as a team,” he says. The group meetings are a key to keeping his team focused. “We agree on department deliverables as a team. My parts manager has to support my service manager, who’s got to support my marketing department. And when we walk out of those meetings, we are one team with one objective. We are accountable to each other and driven to deliver.”

The position provides Mengiste with the perfect vehicle for testing the business acumen gained through the Ross Executive MBA Program. “I had experience with marketing, financials, and leadership, but I wanted my MBA to be an umbrella that showed me how it all tied together,” he says. “I couldn’t have prepared myself for this role any better.” And although Mengiste has a talent for fixing what’s broken in business, unfortunately the same doesn’t apply to cars. Which is one reason his current job is so compelling. “I’m a car nut,” he says. “I can’t fix them, but I love driving them. I work in the world’s best car toy shop. It’s truly fun to come here every day.”