Auto Remarketing Profile Series: Mike Hockett

December 01, 2003

AR: Tell us a little about your life growing up.
Hockett: I was born in Indianapolis and my father was a car man....

AR: An independent dealer?
Hockett: Yes, but he started in the gas station business and built that up to where he had a couple of stations. Probably my earliest memories are when I was about 10 years old and he had a gas station/restaurant; Dad worked in the gas station and Mom in the restaurant. We lived in an apartment above the gas station. There were two or three apartments above the station, and all shared one bathroom. Later, when our family moved, I thought having a bathroom all to ourselves was quite a treat! (laughter) Dad then started buying a car or two and setting them out at the gas station on the corner for retail. I call him one of the original curbstoners! And that is how he got into the car business.

AR: What years were these?
Hockett: Um, probably in the late 40's, early '50s. My dad was the kind of car man that gave dealers in the '50s such a bad reputation...he loved the action. He loved women...drinking...gambling...he lived hard. He was right in the middle of it. (laughter) So, the home life was not much of a home life.

AR: Many of those dealers would have money one day and not the next. Was it like that for your dad?
Hockett: Absolutely. He would be sitting up on a cherry tree one minute and digging a ditch the next. He went from being a used car dealer to being a new car dealer, having a small Chrysler/Plymouth store in another Indiana town. That store burned down, and we moved back to Indianapolis. Dad then had a Kaiser/Frasier/Willy's distributorship, which lasted about two years. He then got a Ford dealership in 1955, and that lasted about six years before he went belly-up in 1961. So, it was an up-and-down cycle that we went through. Dad was a great advertiser, great on promotions, but he wasn't very good on the business side. He liked the action too much.

AR: He could build name recognition for his dealership then.
Hockett: (Laughter) He did an awful lot of advertising. He used to have an elephant walk up and down the sidewalk in front of his dealership. Then, he might have a man dressed as Davy Crockett chasing a man dressed as a bear. He would have a lot of those stunts done as commercials, and people would think you had a lot of money even though you didn't.

AR: It is interesting you say that because what you have and what others think you have are often two very different things.
Hockett: (Laughter) That's right. I asked my mom one time why were we so poor when people thought we were so rich. She said that you are either rich in a big way or you are poor in a big way. It is interesting, when I was a freshman and sophomore in high school, I was rather small and students thought I was a little rich kid. Needless to say, I was picked on a lot and fighting was pretty common. My best friend was a black athlete named Darlan Billips. That was a little unusual especially in the 50s. One day Darlan said "Hockett, you know why I like you -- you know what it feels like to be black." Those experiences I have never forgotten.

AR: Your dad wasn't around very much was he?
Hockett: He was either working, chasing or drinking. He was always right in the middle of it.

AR: How about your mother?
Hockett: She spent most of her time trying to keep track of Dad. One thing my mom did do was that she got me involved in music. I took piano lessons, and then I learned to play a bass fiddle. I enjoyed doing that, at least until I found out what a football was. Then, when I got involved in football and wrestling, I forgot all about music. I got very heavily involved in athletics. It was sort of my saving grace at that time.

AR: Did you see yourself getting involved in the car business when you were young?
Hockett: Absolutely not. No. I saw what it did to families. I used to spend a good bit of time helping out in the new car stores...doing things like sweeping the floors...and in doing that you got to know some of the salesmen. At that time, salesmen were characters...and I didn't want to be a part of that environment.

AR: What did you think you wanted to do?
Hockett: I wanted to be a schoolteacher and a coach. I've got to tell you this story (laughter). I think I was a junior in high school, and I went home from school one afternoon. Dad was home early for some reason. I told him I thought I wanted to be a social worker, and he came off that couch like he had been shot! He said, "You want to do what? You can't help anybody by talking to them!"

AR: Who influenced you to want to become a coach/teacher?
Hockett: Dick Guyer, my high school coach and teacher. He was just a good man, and he had a positive impact on my life, and I wanted to have that same impact on others. I thought that the lifestyle of a football coach and teacher was certainly a lot better than the lifestyle of a car man. So, I went to college to do that.

AR: Where did you go to school?
Hockett: I went to Butler University on a scholarship to play football. Actually, I had my first auction experience while I was a freshman. There was a small auto auction, Midwest Auto Auction, that had an opening for someone to be a clerk one day a week. So, I was an auction clerk when I was a freshman in college. I had the experience of working with two of the greatest auctioneers in the business, Jack Davis and Ray Reams. I used to clerk for those guys. It was an exciting environment and I really enjoyed it.

AR: What happened next in your college life?
Hockett: Well, when I was a sophomore, I found out I was going to be a father, and that sure changed things. Having to support a family forced me to get involved in the car business.

AR: Did you leave school?
Hockett: No. I worked 40 to 50 hours a week and still went to school. See, by 1961 my father went bust in the new car store, so he had started a buy-here, pay-here operation. It was very small, maybe with 15 cars or something like that. I was working full time, going to school full time and trying to support a family. And I was still playing football, because they were paying my way. Then it wasn't uncommon to have 24-hour work and study days. I had two children by the time I was a junior. By the time I was a senior, two things happened (that dramatically changed my life). First, my father had a heart attack and he had to quit work for a time. I had to run the used car store. Second, I realized that a teacher made $4,600 a year...I couldn't make $4,600 a year! I had a family to support. I couldn't be a teacher!

AR: Is that when you changed your mind about a career?
Hockett: I just couldn't afford to teach...not on $4,600 a year with two children. And then my father needed me after his heart attack. So, I found myself right in the middle of doing something I didn't ever want to do. And there was something else that happened (pause) the marriage was falling apart. A lot of things happened my senior year in college. It was tough; so I threw myself into my work.

AR: You were still married then?
Hockett: Yes. We lived 15 years together, but there were trust issues. However, I loved my five boys. But I also became a lot like my dad, spending an awful lot of time working and gambling...drinking...the whole mess.

AR: In a lot of ways, you were building the same reputation your dad had.
Hockett: I think so. You became part of the environment. And I did. And I did a good job of it (laughter). There is one thing that was special about that time...something I wouldn't trade for anything in the world. I didn't have a lot of respect for my father when I was growing up. But when he went through difficult times, I saw him buckle up, pay everyone he owed and not take bankruptcy. He paid his debts. He went back into the buy-here, pay-here business and paid everyone he owed. And that is one thing I truly admired about him. His pride was hurt, but he paid is debts. I saw a quality and character in him that I had not seen before. I learned to love and respect him, and he learned to love and respect me. It is a relationship that I cherish to this day. It was a turning point in our relationship.

AR: You learned a lot during those tough times.
Hockett: That's right, I did. Another thing I learned that when Dad was on top of his game, he had a lot of friends. But when he went upside down, and he went to an auction, they avoided him like the plague. You see how people get treated when they are on top and how they are treated when they are on the bottom. The lesson for me was to treat everyone like they should be on the top.

AR: Did it make you angry the way they treated your dad when he was in trouble?
Hockett: It did. It did. Probably one of the things I did wrong was that I lived my life for my father.

AR: What do you mean?
Hockett: I wanted him to have success...again.

AR: Success or respect? Or both.
Hockett: Probably both. I made that a priority for me. When we were in the buy-here-pay-here business, I also started to wholesale cars. I became pretty good as a wholesaler. About that time, in around 1964, Dad had the opportunity to buy into an auto auction - Indianapolis Auto Auction. So, when Dad got involved in that, I also got into the auction business.

AR: Before we go so far in that direction, let's pause for a moment. Here is a person who was adamant about not wanting to be in the car business, who went to school to become a teacher, but then found himself back in the same business his dad was in. When did you decide that you liked doing that?
Hockett: First, I needed work and my dad needed me. I became like my father, and I enjoyed the people in the business. I love the action and love car people. They are a spectacular breed, if you will. When I got involved with the people and the process...that is when I decided that I really loved this business. Keep in mind the car business is a lot different today than it was 30-40 years ago. You know, when Dad got involved in the auction business, I remember him saying that this was the only business that DEMANDS integrity. If you are an arbiter between a buyer and a seller, you have to tell the truth. This was unique for him as well. So, there was some good in that environment. So, you enjoy the person, and you want to do right by the person.

AR: What happened next?
Hockett: Well, we grew and built another facility. In 1967, Dad retired because my mom got real sick. So, as a young pup, he made me the manager of it. Then, in 1969 we sold to Cox Broadcasting...we were the fifth auction that was purchased by Manheim. I had to sign a five-year working, three-year non-participation employment contract. That was both a good time and a bad time. I hated the thought of having to work for someone for eight years, but I learned a lot about organization from people at Manheim. I learned a lot from Warren Young...he really knew the business. He was a great mentor, and that was a good time for me. I didn't like working for someone else at the time, but it was good for me.

AR: Let's go back a moment to when you were younger, helping with the buy-here, pay-here dealership. You had said earlier that one of the things you missed a lot was having your dad around home. Were you home a lot?
Hockett: No, I was gone a lot. I was a good weekend father; I never drank on the weekends. But through the week, I worked late and played hard. During football season, I did coach Little League football. But in reality, I was probably gone two or three nights a week. I thought I was being a good father because when I was home I would hug my boys, tuck them in at night and say a prayer with them. They knew that I loved them. When I was growing up, that didn't happen in my family. I wanted to make sure that whatever age my kids got, they knew that they had a father that loved them. So, I thought I was a good father...based on the example that I had.

AR: Can we pick up the auction story again?
Hockett: I stayed with Manheim for eight years. Then in 1979, a partner and I started another auction in Indianapolis. My partner was Chet Goins, who still has ADE (Auto Dealers Exchange). We had success very quickly because we built a new facility, and we treated dealers well. We were one of the guys. We started with a six-lane facility and grew to 10 lanes pretty quickly.

AR: How did you feel about getting back into an ownership role?
Hockett: It is interesting. I felt that I had had ownership back in '66 and '67 when we were trucking pretty well in that auction with my father. When Dad sold the auction to Manheim, I had mixed feelings. I understood the part about having ownership and control, but the other end of it was that I wanted to see my father do well. My desire to see my father do well was greater than my desire to have ownership of it. When I began to work for someone else, I found out that I missed that pride of ownership. That was a big letdown for me. I thought that if I ever had the opportunity to own another auction, I would have accomplished all that I wanted to accomplish.

AR: Tell us about the auction you and Goins built together.
Hockett: It was my first experience with building a greenfield site. Chester and I were two peas in a pod. We bought a 30-acre tract together. Neither one of us had any real money, but Chester had something even more valuable - credit. (laughter) So we partnered up and we had a great partnership. We really cared for each other. We trusted each other.

AR: That is interesting. A lot of dealers, even though they might have money troubles from time to time, also build a bond of trust with other dealers. Does that typify the relationship between the two of you?
Hockett: I think there is truth to that. One of the amazing things to me about this industry, especially when I became a manager at the age of 24 and was responsible for credit, was learning about the trust factor. A dealer might only have $500 in the bank, but he was buying $10,000 worth of cars. What you learned is that there is a great deal of trust among dealers. There is more integrity with used car dealers, I think, than in most businesses. If you told that to a banker or to Wall Street, they just don't believe you, but it is the absolute truth. I would rather do business any day with a used car dealer than anybody else in any other business.

AR: That is what your dad did, isn't it? Paid his debts?
Hockett: That's right. There are billions of dollars in transactions done per year, and there are some losses that the industry takes. But in comparison, it is small.

AR: Let's return to the auction you and Goins started. It was ADE (Auto Dealers Exchange) in Indianapolis, wasn't it?
Hockett: That's right. In 1982, we had become the largest auction in the Midwest and I was overwhelmed.

AR: What then happened?
Hockett: We had a very successful auction in '82, I thought that this was great, but is this all that there is? I was thinking that what I had was supposed to be success, but there was still an emptiness and a void inside myself. I am still drinking, but my personal life had changed somewhat. You see, my marriage had finally broken up in the late '70s, but at that time I had five sons at home. And, I loved my sons. I moved into an apartment with no one there; I felt like I was in prison...I felt like I was in a nut-house. I thought someone should put a number on me because I'm insane. (laughter) I really went goofy. I mean I really tore up the streets then. Anyway, in 1981 I met my wife Judy and never looked back.

AR: Sounds like she was just what you needed.
Hockett: She was and is. We were both searching for something in our lives, and then in 1982 we started going to this Baptist church and hearing the Word of God. Now, I am still drinking at that time....

AR: Before we get into that side of your life, because it is so interesting, let's get back to the business side for a moment. You had said that there was an emptiness as far as business....
Hockett: No, it was not just business.

AR: When did you begin to look beyond just ADE and think in terms of ADESA?
Hockett: When I received Christ. (laughter)

AR: So, the two really are tied together.
Hockett: They really are. In business, we were accomplishing what I thought you were supposed to do - we were having fun and making money. But I thought there had to be more to life. So, Judy and I went to this church and began hearing the Word of God.

AR: How did you end up going to this church?
Hockett: Judy had a friend who was going, but I thought the friend was weird, to be honest. I thought they were going to a cult. Judy wanted to go, however, so I went with her. They preached the Word of God, and boy I tell you what, line-by-line I recognized I didn't really love God...that I was God's enemy. God says that if you love me, you'll keep my Commandments...and I didn't know of a single one I had kept.

AR: All of this happened that first visit?
Hockett: No, it was a process. That first day I realized that when they were preaching there was something different. I had been to other churches, but this was different. Other churches I had attended just editorialized, but this church spoke directly from the Bible. I was invited to attend a businessmen's Bible study fellowship, and they were going to spend 32 weeks looking at the book of Genesis. I thought, how are you going to spend that much time on one book...you can read it in an hour. Then, I recognized that only God could have written the Word of God because there is too much in each paragraph, in each line...so I knew that there was something different. It finally dawned on me as well that God had a passion for his creation from the beginning and 80 percent of the original book was about God's relationship with man. We all know God is eternal, thus his love is eternal. If God is love then he needs an object of his love, and love is relational. When you begin to understand God's love, it demands a response. When I went to church, I was challenged. "Where are you, as it relates to God's word?" I knew where I was - nowhere.

AR: This was quite a revelation to you.
Hockett: I think everyone wants to be God's man. God puts that in you. You're his creation. You want to be special to God, to know him. There was certainly that tugging on me, especially recognizing that I was alienated from God. My god was money. My god was cars. My god was gambling. Everything that took all my time was my god, and it certainly wasn't the God of the Bible. The Bible says a double-minded man is unstable in all his ways. I could relate to that. Part of me wanted to live for God and the other part of me wanted to live like hell. I was certainly conflicted. My lifestyle had been such that I truly questioned how in truth, I could become a Christian. The Bible says there is none righteous, no not one. I felt good when I heard that because I was in the majority. I also learned that a righteous God could not have the character of righteousness with out punishing the unrighteous. So in his love for us, he took the punishment for us on the cross. He shed his blood for payment for our unrighteousness. I knew I couldn't become righteous before God but I could accept his gift of righteousness. His shed blood was payment in full. When the truth of that hit home, it was like a heavy load had been lifted. Ask his forgiveness and receive his righteousness. My unrighteousness for his righteousness...that's what you call trading up.

AR: Where was your wife in this conversion experience?
Hockett: She was right with me. When we received Christ, we did it together. I had been toying with the idea, but procrastinating and saying that I couldn't be obedient to what God wanted me to be. So, I just stayed away from it. Knowing this truth is one thing but you have to accept it by faith and allow God to change you. June 22, 1983, an evangelist came to the church. He just nailed me. I told God, "If you want to take my money, my power and send me to Africa, then let's go." So, when I went forward, I went in a cold sweat. I was afraid. I wanted to be obedient and not another "also ran." What I discovered is that God changes your desires. You don't become physically dead but your desire to love God and please God is stronger than your desire to please the flesh, if you will. Three months later, my father and mother accepted Christ. A year later, my mom was diagnosed with Alzheimer's. My father took care of my mother for 15 years with the disease. They both died within a year of each other in 1997. My father became a faithful husband. He would not allow mom to be taken away. The man that never saw a dirty dish became a total homemaker. We would often laugh when he would say in jest...payback is a bear...what an example for the boys and me.

AR: How did it impact your professional life?
Hockett: It made a significant difference. If God owns your life, he owns your business as well. As you know, clocking was epidemic throughout the industry at that time, but now I was a Christian. I thought I could rationalize it by saying I didn't know which dealers were doing it and which were not. But I couldn't do that any longer. I felt like I was a white hat in a bad environment, because if someone had an odometer problem I would make sure that that consignor paid him for that problem. Then the law changed and they had to put odometer readings on the titles. Now, when a dealer came in with several cars, all with new titles and low miles, you knew this guy was a clocker. They couldn't hide any longer.

AR: With your new Christian values, this became a clear-cut issue for you.
Hockett: That's right.

AR: How did your partner react to your newfound values?
Hockett: For the first time in our relationship, we were not on the same page.

AR: Did that create tension between the two of you?
Hockett: Definitely. There was a lot of tension when I first became a Christian. Getting back to the odometer story...we self-insured against odometer fraud and formed a warranty company called POW - Protective Odometer Warranty. We advertised this warranty nationwide. But, we had to police it ourselves. We policed every cotton-picking title; we would not accept any titles that were fresh titles. Making this change really hit us hard. Our consignment business went from about 2,200 cars a week to 1,200 cars a week within a matter of weeks. And we were thinking, "holy smokes."

AR: How did Chet feel about this?
Hockett: Chet thought we were doing the right thing. I think he understood. When we did that, we had the other auctions, especially the chains, calling us asking, "What the heck are you guys doing?" Our answer, "The right thing -- period." Auctions can police the environment and should. The auction industry is doing a fantastic job of it today. There is no safer environment for business today than NAAA auctions.

AR: How did you grow from this point?
Hockett: In 1984, we bought a small auction called Stateline, which was right on the Illinois/Wisconsin state line. Chet went up there to pioneer the sale, and I stayed in Indianapolis. A few years later, however, we bought a sale in Boaz, Ala., and I made plans to go there to run the sale. I looked at doing this for Chet, because he had gone to Stateline and I thought it was my turn in the barrel. It was also during this time that I began to have questions as to whether or not God was going to call me to another line of work, away from the auction industry.

AR: What did you think you might be doing?
Hockett: I thought I might be called into the ministry. I was really struggling with that. Then, I'll never forget what happened. We had a missionary come to our church, and while he was there, he said he needed to buy a car. He asked if he could come to the auction, and I told him certainly. When he got to the auction, he saw that we had 800 to 1,000 dealers there, and I'll never forget what he said as long as I live: "My, what a mission field." It just opened my eyes. You come to your faith in the environment you're in to be a testimony to that environment. I recognized at that time that this is where God put me. If you have a faith or belief, if it is true faith, you become ministers of that faith because it should become a part of you. You can't put it on and take it off like a pair of socks. In other words you are in the ministry.

AR: How did you share your faith with others in the industry?
Hockett: We started to do Bible studies at the auction. I moved to Alabama to build the auction in Birmingham. I was hoping that my partner would see that I was not some kind of nutcase, but was a good partner. We were doing the Bible studies there. I saw more people coming to Christ in that environment than in church! Our partnership ended in 1988. That was a sad time, I feel, for both of us.

AR: You went from there to buying other auctions, isn't that correct?
Hockett: That's right. I first went with another partner to build an auction in Memphis, but then I later bought him out. After a few years, we began acquiring and building other auctions, but the reason for doing this was evangelism. The idea was to build the auctions to be a witness in that market and to make the money to enable the building of churches in other countries. That was my strategy. Wherever we went and bought an auction, we would encourage them to have Bible studies. I felt like this was great...this is what God had in mind for me. I saw myself as a missionary.

AR: Is this where ADESA began? And what does the name ADESA mean?
Hockett: It means Auto Dealers Exchange Services of America. In 1992, our company, which had 4 auctions, purchased an auction in Indianapolis from a venture capital company and concurrently took the auction company public. It was a NASDAQ company under the ticker SOLD. We were certainly evangelistic, and, in retrospect, I'm not really sure that was the wisest thing to do. You juggle with the question of whether you are doing it for God or for yourself...are you expanding the Kingdom of God in the proper way. Christ is not corporate. Christ is not a religion. Christ is personal. We began to build auctions throughout the country - Buffalo, Charlotte, Boston, Montreal....

AR: ADESA certainly began to grow, and then one day a company named Minnesota Power knocked on the door and wanted to buy you. How did that evolve?
Hockett: Well, (laughter) it is good that you can laugh about these sorts of things. They were looking for a growth company. I knew that there was a huge off-lease portfolio, primarily in the Northeast. As a small publicly traded company for ADESA to go to that next level, we had to be in that market and in a big way. It was going to take a great deal of money to get there. But, because we were doing so many greenfield sites, it was difficult to make our earnings. I knew that it was going to take time for a greenfield to gain critical mass, time to start showing the return. I thought that with Minnesota Power, we would have that time without being under the spotlight, hoping we could hide under a larger publicly traded company. When MPL was searching for a growth company, we were the lucky one because we were certainly growing. The chief executive officer of MPL called and I met with him. When I met with him and shared with him my values, the things I would not compromise and the fact that I was evangelistic in my operations. He said that he thought we were kindred spirits. So, I thought we could walk down that path together. They were to buy our company out of the public market and our team was to own 20 percent of ADESA under MPL. But, right before we were to sign the agreement, the CEO told me that he was going to retire and they were looking for his replacement.

AR: If you had known this previously, would you have sold?
Hockett: No. I was only looking to expand the operations. Before the ink was dry on the agreement, MPL had a new CEO and chief financial officer. A year later I was gone. I think I got exited (laughter). Apparently, the growth strategy we had was right. ADESA is now larger than the utility company. I am proud of them.

AR: You may have gotten out of the auction business then, but you still saw yourself as a minister of sorts, didn't you?
Hockett: Remember, you are a minister of sorts when you receive your faith. My goal, at that point, was to involve all my efforts towards evangelism. Through this I was trying to find out where God wanted me. A good friend of mine is Paul Eschleman who helped produce the Jesus Film along with Warner Brothers in the 1970's. Paul had a vision of expanding the Gospel through the Jesus Film. The film has been translated into over 800 languages. It is indeed one of the greatest tools for evangelism ever. I went to California to where the Jesus Film Project was headquartered. In one of my trips to India, I met Thomas Abraham who was from India but his responsibilities included 20 other countries. Having traveled overseas with the film project, I was somewhat familiar with the people and film distribution. I asked Thomas what I could do for him. He said, "Send money. Sometimes, Mike, the color of your skin works against you." He told me to use my talents to make money and give.

AR: What happened then?
Hockett: I went back to Indianapolis and bought some new car dealerships. But, I am not cut out for the retail business and wasn't very good at it. Then later, I talked with Carl Miskotten and Trent Knox about their auction in Grand Rapids. They had done an outstanding job there, and Carl came to me and proposed joining together and designating a percentage of the company for giving. So that is what we did. I wanted to do it that way so that anyone involved in our company knows why we are in business.

AR: Is that still a concept of Auction Broadcasting Company?
Hockett: Absolutely. I also believed that each of the local managers needed to have ownership in the auction. There is nothing like ownership, so each ABC is set up as an LLC so that each general manager has ownership in that particular auction. That way, they are very much concerned about the entire operation and each dealer. We are making great managers into great owners. Each owner is not only concerned about doing well in their particular market but is concerned about their partners in the other markets. It is incredible the camaraderie, fellowship and trust one for another. Each supports the other because each reflects the whole. It is almost like an extended family. I am very proud of my boys, and now I have others who are like family. I have seen them mature, fight the course and become what I call warriors. I couldn't be more proud of them. A greenfield strategy is very difficult. You certainly have your share of naysayers through the process.

AR: When you look ahead, what do you see over the next few years for yourself?
Hockett: I've looked through the Bible very hard and cannot find the word retirement. Work is not work if there is a cause. The cause gives you a sense of mission. Work becomes exhilarating because it fulfills a greater purpose. I'd like each one of the partners not only to have a continued passion for business but also a cause. To attack what they do with a sense of mission and certainly grow opportunities. I have been privileged to go all over the world -- to the Soviet Union several times, China, Vietnam, Cambodia, Mongolia and India and Africa many times. I have seen men when they proclaim Christ; they do it at risk of death in some parts of the world even today, or at least alienation. They do so much with so little that I stand amazed at their brilliance and bravery. These are the real warriors, and we have the privilege of working for them. One thing I have learned in business and in life is that it is really not about success - it is about faithfulness. The most important thing is to be faithful to what you think God has called you to. And I have peace with that. I have absolute peace with that. I enjoy living on the edge. If you're lying down, you are taking up too much space. They say you should never give second-class effort to a first-class cause, and I don't want to give second-class effort when I know I serve a first-class cause. I cannot hold a candle to some of the people I have met overseas. They make me look like a wimp, but that is fine...that is what drives the bus. I get to work for those warriors.