DON'T LOOK NOW! Here come...the REPO MAN!!
And he's comin' to a chihuahua parking lot near you!! Must read for the under the porch peanut gallery.(g)
"Car Repossessors Boom in Silicon Valley
As Tech Firms Struggle Amid Slowdown
By SUEIN HWANG, Staff Reporter of THE WALL STREET JOURNAL
SAN JOSE, Calif. -- At 4:40 a.m., James Kevern is on the hunt, charging down dark suburban streets in an unmarked white truck. "We've got to hurry," he says. "We got a tip he leaves the house at 5:30."
His quarry is a computer-company worker who recently lost his job. The man's loss is Mr. Kevern's gain. Mr. Kevern is a repo man, and the boom times are finally returning for his industry in Silicon Valley.
Mr. Kevern's truck cruises past a ranch-style home. The lights are on and the newspaper is still in the driveway. But his prey is missing. Eyes narrowing, Mr. Kevern slowly navigates through the subdivision. On a hunch, he turns right and shines his flashlight down a side street. "Bingo!" he cries.
Without leaving his cab, Mr. Kevern pushes a few buttons. The metal jaws of a contraption called the Dynamic 601-b self-loading boom emerge from the truck, pass under a new Mercury Cougar, and turn outward to lift its front wheels. Barely a minute later, Mr. Kevern's truck hurries from the scene, the Cougar in tow.
In repo-man lingo, Mr. Kevern has just "popped" the car, and there is a lot more popping to be done these days. The technology-stock bust is whipsawing through Silicon Valley, stranding numerous tech workers with the expensive mortgages and fancy cars of a lifestyle they can no longer afford. Mr. Kevern says automobile repossessions have tripled during the past year for his office, the San Jose branch of Daybreak Auto Recovery Inc. What's more, repo trucks here are more likely to be dragging along a 2000 Lexus than a 1987 Chevy.
"We're getting a lot of new loans that have gone bad very quickly," says Mr. Kevern's boss, Brent Doyle, president of Daybreak, based in Sebastopol, Calif. In the past year, he's seen a 50% jump in car loans where borrowers defaulted on their first payment.
Mr. Kevern agreed to let a reporter ride along one night under the condition that his targets not be identified. As he drives off with the Cougar, a newscaster on his truck radio reports that Cisco Systems Corp. will be eliminating thousands of jobs. He pauses for a moment to listen.
In Cisco's Lot
Mr. Kevern knows Cisco well, or at least its parking lots. In the past year, he figures he has lifted more than 50 cars from Cisco employees, some from just outside company offices. A recent hunt led him to a Cisco parking lot and a Lexus SUV that he couldn't move because of its four-wheel drive. He phoned the owner for the keys. "He hadn't made a payment in one year," Mr. Kevern says. "He refused to let go of the car and called security. He actually started crying." Deciding not to cause more of a scene, Mr. Kevern left without the vehicle.
Good times, bad times: Daybreak Auto Recovery demonstrates how the Dynamic 601 b self loading boom repossesses a Porsche, a frequently 'popped' make.
Did he feel bad about making a grown man cry? "Oh please," he says. "I've been in this business 15 years and I'll tell you what makes me feel bad -- the elderly, mothers with kids. These guys at computer companies and dot-coms, they live above their means. You should see the credit reports on them. It's incredible."
It's still dark when Mr. Kevern tows the Cougar into the chained-off lot alongside his office. There, it joins a dozen other autos, most of them nearly new. There's a Cadillac, a couple of Ford Mustangs and a red Mercedes coupe. Two cars are so new their license plates still have dealer tags. "Porsches are dime a dozen these days," Mr. Kevern says.
Where the Boom Was a Bust
Mr. Kevern's Silicon Valley boom was long in coming. Through most of the 1990s, much of the repo industry struggled because of tighter bank-lending practices and recession-stung consumers who were careful not to overextend themselves. Then, for a time, the massive wealth created during the Internet euphoria kept repossessions to a minimum as well. But now, as layoffs rise and companies fold, repo men -- and they are mostly men -- are bullish all around San Francisco Bay.
At the American Electronics Association Credit Union, a Sunnyvale, Calif., bank whose members work for technology companies, the list of cars "out for repo" in February topped 150, twice as many as the year before. "When we hear about layoffs," says Michael Roman, a manager at United Road Services Inc., which runs one of the largest national repo chains in the country, "we get all excited."
Automotive repossessors are paid per pop, with rates ranging anywhere from $300 for an easy job to $10,000 for a multiyear hunt for an antique roadster. (Mr. Kevern's firm got $300 for the Cougar.) Their clients are banks, credit unions, car dealerships or anyone else who has a security interest in a vehicle. The repossessed cars usually go to the auction block. But sometimes the owners pay up and get the car back. Daybreak, which pops around 300 cars a month, is one of the larger companies in an industry still dominated by mom-and-pop businesses. It was recently acquired by Advanced Wireless Systems Inc., a tiny high-speed Internet-service provider based in Alabama that has been struggling amid the telecom bust. The company saw Daybreak as a means to strengthen its bottom line and show a profit.
Veteran repo men typically earn between $30,000 and $60,000 a year. A 45-year-old father of three grown children, Mr. Kevern spent years working as a chef at bay-area restaurants before his passion for cars led him to become the manager of a Ferrari dealership in Los Gatos. Fifteen years ago, he helped another repossessor find a car and like many good repo men, found himself enjoying the excitement of the hunt. He's been in the business ever since.
His typical work day runs from 2:00 a.m. or 3:00 a.m. to 6:00 a.m. in the field searching for vehicles, followed by a couple of hours at the office. Off the job, he drives a rare 1971 AMC Javelin that he restored himself; like most other repo men, he owns his car outright.
At 5 a.m., Mr. Kevern is back in his truck. Driving north on Route 101 as the sun begins to rise, he explains the unique challenges of dealing with the technological elite. "The intelligent ones try every trick in the book," he says.
Explorer Expedition
His next target is one of them. He pulls up to a San Jose apartment complex near manicured lawns and tile-roofed homes. "This lady has worked for a few tech companies, and I've chased her everywhere," he says. "She has a million-dollar house but can't make payments on her Explorer." He gets out of his truck and walks into the gated parking lot, which is littered with Lexuses and BMWs. He returns after a few minutes. "Nope, not there," he shrugs. He has tried to snatch the Explorer more than five times.
Unlike the repossessors in the 1983 cult-classic movie "Repo Man," who lift cars with just a few hotwiring tools and skinny "slims" that lift locks, Silicon Valley repo men need considerably more elaborate instruments. Instead of the open carports and driveways of the middle-class, they must deal with the gated communities and sealed garages of the upper middle-class, not to mention the latest in European antitheft technology. Under California law, repossessors can go onto private property, including parking lots, to get a vehicle because they represent the legal owner. But they can't enter a property that's gated and locked.
To boost their odds of success, repossessors increasingly rely on high-tech, specially outfitted tow trucks with contraptions like Mr. Kevern's Dynamic 601-b. Another favorite piece of equipment, the "illusion truck," hides the towing apparatus entirely in its bed, so the vehicle looks like an ordinary pick-up until it does its deed.
None of these gadgets solve one of the biggest headaches of Silicon Valley repo men: what they describe as the lingering arrogance of suddenly impoverished Valleyites. "High-tech people suck to deal with," Mr. Kevern says. "They act like they're above it. They hide from us, screen their voicemail, then are all surprised when we're holding their car."
'A Shocking Jolt'
Personal-bankruptcy lawyers say that of all the indignities presented by financial hardship, there are few experiences as traumatizing as confronting a repo man. "It's a shocking jolt," says Ike Shulman, a San Jose-based personal bankruptcy attorney who is experiencing his own uptick in business these days.
Near 6:30 a.m., Mr. Kevern heads to his favorite diner, a joint called Flames, where waitresses and other regulars greet him warmly. Sipping his coffee, he recounts the day last month when he went after three luxury cars at once with a combined value of more than $150,000 -- a Mercedes, a BMW and a Lincoln. All three were being leased by a woman living with her "dot-com boyfriend." According to Mr. Kevern, she thought the boyfriend was going to make the payments, but then he lost his job.
Mr. Kevern has a few tricks for dealing with the young and still-affluent-at-heart. One of his most successful strategies is to hit the parking lots of popular Valley hangouts such as Steamer's the Grillhouse, which serves Moroccan seared tuna and other delicacies in a pastel colored room. Even if the owners of the cars notice him there, they are usually too embarrassed to make a scene, Mr. Kevern says. "The safest repo in the world," he explains, "is when they're eating."
After the brief diner refueling, it's off to Los Gatos, one of Silicon Valley's tony suburbs. For weeks, Mr. Kevern has been trying to repossess a van leased by a small technology company, but a visit to the firm's offices told him only that it has gone out of business. Mr. Kevern pulls up in front of a modest home at 7:30 a.m. and knocks on the door. This is the second time he has visited this house in search of the van.
A young man -- a former employee of the company and the listed lessee of the van -- comes to the door wearing a gray sweatshirt and a sheepish, befuddled expression. Behind him, an older couple stares curiously -- his parents, Mr. Kevern concludes.
The young man shifts uneasily, saying little as Mr. Kevern talks in a calm but stern voice. "The easiest thing to resolve this is to tell me where the van is."
The young man hesitantly suggests that the head of the now-defunct company knows where the van is. "Talk to him," says Mr. Kevern. "Tell him we can do a claim and delivery, which means we can get a judgment against you. If you don't find the van, we can come out with the sheriff's department. And if this other guy doesn't have the van, they can arrest you." Finally, the young man offers his former boss's address.
Now it's time to race the clock; Mr. Kevern worries the young man is going to call the former company head to warn him of Mr. Kevern's arrival. He follows morning traffic down Highway 280, past enormous Spanish-style mansions. As he zooms by Apple Computer Inc.'s headquarters, Mr. Kevern laughs. "It's unbelievable how many cars I got from that lot -- 100 cars easily," he says.
What about Sun Microsystems Inc., whose shares are down 75% from their 52-week high last fall? "Lots -- about the same as Cisco." And Intel Corp., whose shares have been slammed but is known for its frugal corporate culture? "It varies -- we don't get their executives, mostly factory workers."
Just recently, a new company appeared on the horizon: "Last month," he says, "I got a couple people who work for Yahoo."
Exiting the freeway, Mr. Kevern enters Los Altos, one of the wealthiest neighborhoods in Silicon Valley. "This is major money over here," he says, as a parade of Volvos, Mercedes and Lexuses pass by. He drives up to a rambling brick house on a street of perfectly landscaped homes that face the stunning green hills of a park. A sign in front indicates the house is for sale; a brochure fixes the asking price of $1.3 million. There's no van in sight. Mr. Kevern marches through the garden and knocks on the front door.
'We're Embarrassing Them'
He's back less than five minutes later, after the door was slammed in his face. "That's the usual attitude with rich people because we're embarrassing them with our tow truck," he says.
But before the slam, the man behind the door gave Mr. Kevern another name and address -- and a few days later, at 3:00 a.m., Mr. Kevern finds the van parked in front of another company. The Web-site address of the defunct company that leased the vehicle has been partially erased from the van's side.
It's 10 a.m. when Mr. Kevern returns to the office. Five targets, one strong lead and one pop: not too bad for a typical night. He strokes the office cat and reflects on those he's made carless. "They weren't thinking about their companies, they were just thinking about all the money they were going to make," he says.
Silicon Valley's reluctance to give up its cars is a remnant of the great optimism that led to their purchase in the first place, adds Mr. Kevern's boss, Mr. Doyle. "You find a lot of lottery tickets in repossessed cars," he says. "It's their |
