COLUMN ONE : Changes Flow On at Pumps : Self-serve is only part of the gas station revolution. Next may come ‘energy fueling plazas’ where you can fill up, send a fax and drop off the laundry. But don’t expect a tune-up.

When Joe Namson got into the service station business after World War II, attendants skittered around customers’ cars to wipe dust from the fenders and clean the floor mats--even for drivers who bought only a couple gallons of gas.

Today, at Namson’s station on a well-trafficked corner in Sherman Oaks--a sturdy survivor of the Jan. 17 quake--patrons perform their own service, such as it is. Their credit is approved at the pump, through a direct satellite link to Unocal Corp. The average fill-up takes 1 minute, 9 seconds flat.

While stations around his close down, the victims of grinding competition, Namson slices his profit margin on self-serve regular gas to as low as 2 1/2 cents a gallon. He inspects his operation daily--especially the underground fuel tanks; if he misses a problem, the sanitation, fire, occupational safety and environmental regulators may descend.

Midway through the most dramatic transformation in the history of retail gasoline sales, Namson and thousands of other dealers around the country are keeping their eye on the horizon, for even more change is coming.

The next incarnation of the service station--what some like to call the “energy fueling plaza”--will invite drivers to pull in to buy a tank of gasoline or natural gas and a loaf of bread, send a fax or pick up the laundry or grab a Big Mac to go. Lube jobs and traditional gas-pump repartee--perhaps, someday, human contact of any kind--aren’t part of the vision.

“It’s not that much fun anymore,” sighs Namson, 75, who used to know all his regulars by name. “There’s no personal touch between customers and the dealer. And now it’s even more impersonal. You go stick the card in the pump. Even the guy in the booth doesn’t get to know anybody.”

In the last two decades, Namson’s tidy corner of the world petroleum industry--like tens of thousands of stations across the country--has been caught up in massive change that runs far deeper than the dust on his customers’ windshields.

Erratic oil prices, changing customer demand, costly environmental rules, high-volume competitors--and, less obviously, the development of more durable, reliable cars--have buffeted the gas station business.

Namson’s corner, at Van Nuys and Ventura boulevards, has supported a service station since 1932, when the boxy Model A was the nation’s favorite auto. Namson has been in the business nearly as long--45 years, 30 at this site.

He’s one of the survivors.

In 1972, more than 226,000 traditional full-service stations existed nationwide. Today, fewer than half that number are still in business--but there are more than 70,000 self-serve mega-stations and an equal number of convenience stores that also sell gasoline.

“We used to clean your windows and check the tires,” said one gasoline marketing veteran. “Now we try to sell you doughnuts--at $4 each.”

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Before the mid-1970s, oil companies competed by marketing cheap, low-octane “fighting grades” of gasoline in what became an industry of gaudy gas wars.

Dealers wooed customers with free chickens, cigarettes, Hula-Hoops, flashlights, coffee mugs and trading stamps--as well as the occasional mink coats and Cadillacs. In 1969, Namson tripled tire sales--from 30 to more than 100 a week--with a promotion touting “Bare-Bottom Prices” on placards carried by bikini-clad models, ignoring neighbors who condemned the display as obscene.

The graciousness and the goodies all but ended with a quiet meeting Oct. 17, 1973, in Kuwait City. To little notice in the United States, then obsessed by Watergate, the Arab world’s oil ministers had agreed on an embargo--primarily aimed at punishing America for supporting Israel in the Yom Kippur War, which had erupted 11 days earlier. On top of existing gasoline shortages, the embargo quadrupled crude oil prices.

What followed was a revolution in gasoline marketing.

Consumers decided that gasoline was a commodity--that a gallon of one brand performed pretty much like a gallon of another.

In fact, although some differences remain in additives from brand to brand, federal pipeline regulations by the early 1970s essentially had set national standards for octane and other gasoline characteristics. Consumers tried off-brands and found--to their surprise--that their cars ran fine.

So when prices soared under the embargo, thousands began regularly refueling at the cheapest place in town.

That put dealers in a squeeze. Most are independent entrepreneurs, paying fees to use the oil company’s brand name whether they own their station and the land under it or lease them from the company. Like many small-business owners, dealers can make a comfortable living--when the economies of their industry are favorable.

Although prices were rising at the pump, however, dealers found themselves in a vise. Their profits were held down by Nixon Administration price controls. Also, as the embargo took hold, each station’s fuel supply was rationed.

So while Arab producers and big U.S. oil companies enjoyed record revenues as world crude oil prices skyrocketed, U.S. dealers--often with nothing in their tanks to sell--faced lines of angry motorists.

“Believe me, it was a hairy situation,” said Don Smith, editor of the venerable National Petroleum News.

More than 25,000 service stations--more than 10% of the nation’s stock--closed in the two months after the Kuwait City meeting. Those that toughed it out were forced to operate as cheaply as possible, with most choosing the supermarket strategy of low profit margins and high volume. And they did it mostly by firing the help and putting in self-service pumps.

As it happens, self-service was a Los Angeles innovation, introduced by independent Urich Oil Co. in 1947. Self-serve stations had become pesky competitors to the major full-service chains in the 1960s--particularly the coin-operated Gasamat chain in 11 Western states and the distinctly low-rent Hep-Ur-Sef stations in Arkansas, Oklahoma, Missouri, Texas and Louisiana.

But until the embargo, the major oil companies had fought off self-service by enlisting fire marshals--in part with stories of explosions caused by smokers standing too close to the pumps--who in turn encouraged state legislatures to declare self-service unsafe. To this day, Oregon and New Jersey ban public sales of self-serve gas.

Nonetheless, 85% of all gasoline sold in the United States is pumped self-service--the single biggest transformation in retail gasoline history. And with the shift has come the huge, low-price stations in prime locations that the industry calls “pumpers.”

Pumpers wield powerful economies of scale. A central attendant can take the money for dozens of pumps. Such new operating costs as environmental cleanups can be spread over higher gross sales.

When Joe Namson and his brother, John, took over a station on the Westside after World War II, they became a hot success by jumping sales from 5,000 to 30,000 gallons a month.

Now, some big oil companies try to dump franchisees unless they pump at least 100,000 gallons a month. These days, Namson, who gets a daily tank-truck load of gasoline from Unocal, sells more than 200,000 gallons a month. Some big-volume stations pump up to 500,000 gallons a month.

“Everybody’s going for volume,” Namson says warily, “but the pie is only so big.”

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The latest plague on dealers is a steady fall in demand for gasoline in recent years. New cars are more energy efficient. And the economy has been stalled, reducing companies’ need to transport goods and people.

At the same time, low world crude prices have kept an ocean of petroleum on the market. That has kept prices at the pump, adjusted for inflation, at 1947-era lows. Profits have sagged for dealers and oil company marketing divisions.

In response, the oil companies have tightened their belts. Most have moved to concentrate retail stations near refineries--to cut transportation costs and get the biggest bang for their regional advertising buck. Across the country, stations have been traded, sold or shut down--whether the local operators liked it or not.

Unocal is closing 20% of its California stations. Arco retreated to the West Coast after 1985, trimming its network of stations from 3,900 in 18 states to 1,600 in California, Arizona, Nevada, Oregon and Washington. Texaco swapped 92 Northern California stations for 84 Exxon stations in California and Nevada; since 1989, Texaco has closed more than 3,200 of its 17,000 stations nationwide. Chevron in the last decade has shrunk its service station network almost 30%, down to 8,700 stations around the country.

After a particularly bitter battle with its Southern California dealers, Exxon just pulled down its signs from stations that held a 3.4% share of the market in Los Angeles, Orange and Ventura counties.

Since then, former Exxon dealer Ray Daryaie has raised the Mobil flag at his station at White Oak Avenue and Ventura Boulevard in Encino.

In 1986, Daryaie invested $600,000 to buy the gas station, washing his hands of a career as an architect and interior designer. “So much bankruptcy, husbands and wives divorcing,” he recalls of his former life. “This way, I take my money home at the end of the day.”

And the gas station’s profits? “Fabulous.”

At least they were in 1986.

Ultimately, dealers set their pump price, based on wholesale prices, operating costs and whatever the traffic will bear--considering, always, the competition across the street.

At first, Daryaie had a gross profit margin of 12, 13 even 16 cents a gallon. By the end of 1990, it was down to 6 or 8 cents. After Exxon announced it was pulling out, the margin dropped to 3 to 5 cents.

Over the same period, the rent he paid Exxon climbed from $5,600 to $9,500 a month, Daryaie says, and environmental compliance costs, license fees and taxes ballooned as dramatically.

Small-business operators have few choices about making ends meet in tough times. Daryaie started with 36 employees and 12 service bays for tuneups and minor repairs. Now he has 12 employees and six service bays.

“The oil company would not reduce their margin,” Daryaie says. “We had to do it, to stay alive. . . . I had to sell my life insurance. I had to cash in all my savings, everything I had, little by little.”

At the moment, he’s back to the rough industry standard of an 8-cent profit margin. And he hopes to expand. Daryaie expects to add a tire sales and alignment franchise and a carwash.

But he won’t try to do more repair work. The oil change, lube and repair side of the business--known as the “back room” in dealer parlance--is a dying proposition for most stations. The villain? Mainly the much-improved automobile.

In the early 1970s, many auto makers recommended lubrication and oil changes for new cars every 1,000 miles, and new tires and tuneups every 15,000 to 20,000 miles.

Better lubricants, the steel-belted radial tire and other advances have changed the schedule to a lube and oil change at about 7,000 miles and a tire change at 40,000 to 50,000 miles. Cadillac’s Northstar engine, with platinum spark plugs, is being promoted as capable of going 100,000 miles before its first tuneup.

Even then, the expensive diagnostic equipment demanded by highly specialized on-board computers is sending more drivers to dealerships for tuneups when they are needed. And many busy drivers have taken to getting routine fluid changes at independent quick-stop chains.

Still, some station operators are reluctant to give up their back rooms.

Chuck Yee has had repair bays for the last 16 years at his Eagle Rock station.

“The industry thinks snack shops and convenience stores are the way to go, not repair,” says the Shell dealer. “But that’s not for me. I love this neighborhood repair business. You meet a lot of people and it’s more profitable.”

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Arco--a company apart in the sometimes lock-step retail gasoline business--decided quite the opposite back in the early 1970s. The first major brand to embrace self-serve pumps, the company drastically restructured to aim at low-price, high-volume sales.

In the prime station locations it retained, Arco buried larger storage tanks. It serviced them with bigger trucks: tankers that carried 1,800 to 2,000 gallons were replaced by 8,500- to 9,000-gallon models, greatly reducing the cost of supplying the Los Angeles company’s stations.

And Arco replaced most of its repair operations with AM/PM Mini Market convenience stores. Arco also started its own chain of quick-lube shops and Smog Check stations, dumped credit cards and revamped its refineries to cut costs.

Today--with about 90% fewer stations than it had in 1975--the company sells a third more gasoline. And it is experimenting with two-acre plazas that include pumps, convenience stores, lube shops and other operations.

Others are conducting their own experiments. Unocal, Conoco, Amoco and Sunoco are putting alternative fuels--mostly propane, methanol and natural gas--on the pump islands. “We want to bring alternative fuels to Main Street U.S.A.,” says Shel Vedlitz, Conoco’s alternative fuels marketing manager.

And Chevron, which introduced the first direct satellite hookup for paying at the pump--on the same satellite used by National Public Radio--is looking hard at the burger business.

The San Francisco-based company has half a dozen stations on the same site with Taco Bell outlets in the Dallas area and a Burger King/Chevron operation in Miami. Mobil has a similar trial with McDonald’s at a station in Bricktown, N.J., and two in Naples, Fla.--although the company says badly chosen sites and other problems doomed two West Coast experiments with Taco Bell.

“Everyone’s looking for the magic bullet,” says William Berghoff, Chevron general manager of brand services.

The idea--the buzz of the industry--has merit, retail gasoline analyst Trilby Lundberg says. “Fueling the tank and the tummy? Truck stops have known about this for years,” Lundberg said.

Meanwhile, personal service continues to wane.

So-called ghost stations--automated, 24-hour sites that don’t require attendants--have been discussed for years by various big marketers but have not caught on. But in Oregon, 40,000 fleet customers--from taxi companies to dump truck contractors--now use 300 such stations around the state.