Losing five stores “was significant, but we just kept doing what we were doing.”
Running a lean operation is business as usual at Prestige Automotive Group in Detroit, said CEO Gregory Jackson. That means keeping a tight rein on expenses and not hiring “excess” people, he said. Being “cash liquid” is part of that equation, too.
It is a business philosophy that served him well over the years, especially when the auto industry tanked a decade ago.
New-vehicle sales at Jackson’s stores “flattened, but we just rolled along,” he said.
But Jackson’s business strategy hadn’t anticipated the loss of his three Saturn dealerships in Jacksonville, Fla., and one Pontiac dealership near Ann Arbor, Mich., when General Motors discontinued those brands as part of its bankruptcy reorganization. A Chevrolet store he owned in the Ann Arbor area also was axed by GM as the automaker fought for survival.
“I’ve never had a lot of fat,” said Jackson. His group currently operates Mercedes-Benz of St. Clair Shores and Prestige Cadillac, both in suburban Detroit, and Courtesy Ford in Okemos, Mich.
Losing franchises hurt
“If anything hurt me, it was losing the five franchises. It was significant, but we just kept doing what we were doing” at the other stores, he recalled. “If you’re lean, you’re running efficiently already.”
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Over the years, Jackson has acquired and sold numerous dealerships.
A 2005 Automotive News story quoted him saying that Prestige Automotive operated an even dozen GM and Ford Motor Co. dealerships in Michigan and Florida.
- Title then: CEO
- Dealership group: Prestige Automotive Group
- Where: Detroit
- Survival strategy: Running a lean operation provided the foundation, but the group also worked harder to get financing for customers when lenders said no, and it capitalized on growing used-vehicle demand.
That story also noted that in 2004, Prestige Automotive was the first African-American-owned dealership group to generate revenue of $1 billion, according to Black Enterprise magazine.
In August, Jackson told Automotive News that he had those 12 stores at the dawn of the recession, but he closed the five GM stores and bought a Toyota store during the downturn.
Jackson said losing the GM stores was hard. Employees who worked there were part of the Prestige Automotive family.
“It was hard to tell people we were shutting down, not because we were unprofitable — the employees were making money, I was making money,” he said. “The problem was at General Motors.”
Working past ‘no’
Though sales didn’t dip at Jackson’s remaining stores, they didn’t grow either, so “We worked a little harder,” especially in the finance and insurance office, Jackson said.
For example, instead of accepting “no” when a financial institution turned down a customer for financing, his F&I managers asked the finance company whether there was anything the customer could do to make the deal happen. Sometimes, it was as simple as paying off a $500 debt or coming up with a bigger down payment.
More times than not, the customer could and would do that little bit more, and the loan was secured.
Previously, “We weren’t always doing that,” Jackson said.
As new-vehicle margins dipped, Jackson found that his used-vehicle department helped pick up the slack.
But he didn’t do anything differently to encourage those sales. He believes the increase had to do with customers preferring used vehicles over new simply because those vehicles fit their needs and budgets better.
Though the recession presented a unique set of challenges, Jackson said what he experienced during that time, more than anything, reaffirmed what he already knew.
“I don’t know if I had any big revelations,” he said. “It was more affirmation that running lean with good operations and staying cash liquid is just good business. Many of those who ran out of cash went out of business, but that wasn’t just the auto industry. That was true of any business.”