October 27, 2020

Jackson Automotive Group CEO deals with crises, one after another

There are so many health concerns around COVID-19. Are your processes different in how you’re handling customers?

I think as Americans, we’re very resilient. As car dealers, we’re even more resilient. You know, when this came out, we had to unfold and rethink the entire business and put up shields and wipe everything down.

We’re car people. I mean, we go and work on a car. You grab lunch. And we never wash our hands. You know what I’m saying?

You’re just always on the run. So I think the entire business has been rethought over the last six months.

And I think that shows, one, how quick we can adapt and the resilience that we do have as car dealers. Because we’re always being thrown something. If it’s not the tariffs, it’s this. If it’s not the downturn, it’s that. If it’s not the recalls — you know what I’m saying? So you’re always on your toes waiting for the next shoe to drop because it’s going to. I mean, it’s the car business.

You’re facing some tight inventory, is that right? Any brands in particular? Subaru is always low on inventory.

Yeah, even pre-pandemic, they were always struggling to keep us filled. Toyota now is finally battling back and getting us some product. The Chrysler/Jeep brands were super low in inventory. Hyundai’s done a fantastic job of keeping us at almost pre-COVID levels. They’ve done a phenomenal job. We’re really pleased with them.

What is driving your fixed ops business?

During COVID, a lot of people just didn’t go out. And now that states have opened up … we’re talking about entering the RV business — simply because I think the average American is going to drive more. And I think they’re going to keep the cars that they have and service those cars.

I don’t think we’re going to have air travel like we’ve had in the past. I don’t think you’re going to have rail travel, public transportation. I think it’s going to look totally different, post-COVID. And I don’t know how long post-COVID is, but, you know, since COVID, I just don’t think folks want to travel. I normally travel about a million miles a year, and I haven’t stepped foot on a plane since March. So it’s kind of weird for me to drive past an airport in my car.

How serious are you about that RV business?

To the point where I’m probably 75 percent done. We’ll have two or three outlets … in the same locations as we have dealerships, so in Oregon, Texas, Washington.

Wow. That’s a whole different business.

Yeah, a whole separate venture. But, you know, we’ve got a little RV experience. The Honda store [where I worked in my hometown of Klamath Falls, Ore.,] had RVs for 10 or 12 of the 25 years I was there.

What are consumers looking for right now? What’s a hot used vehicle these days?

You used to [be able to] say it was a Toyota 4Runner or a Toyota Tacoma, but now it’s just about anything where the miles are right and the condition is good; it doesn’t matter what brand or make or model.

They genuinely don’t last for us more than — we’ve got about a 17-day turn. It’s a great place to be in, other than we would like to have about 50 percent more inventory.

Let’s talk about the social justice movement that has been going on since the killing of George Floyd in May. Have you had to address the issue with your employees?

You know, as a group, we have not. And I won’t say that we’re naive to it. But as a group, I think we represent the United Nations. We have all nationalities that I can think of represented in one fashion or other, in one department or another, in each of these stores. And the truth of it is — and I don’t know if it’s because all the employees work for a minority owner. I don’t know, maybe we’re naive to it. I don’t know — but it hasn’t been an issue. There hasn’t even been that I can say a lot of water cooler talk about it, you know, and some of it’s right there in Corvallis [Ore.], which is just south of Portland, and Portland’s had its own issues with all of that.

Do you plan to acquire more stores

Yeah. We’re actively purchasing stores, looking to buy stores. I have a tough time divesting of stores, so I don’t sell many, but I keep — I do buy.

What brands are you looking for?

I would like the Ford brand. I would like a high-line brand, whether it be Lexus or Acura or Mercedes or Audi or BMW.

How are your Oregon stores dealing with the wildfires?

We’ve had several days of closure in the central Oregon stores. Newport, Corvallis and Albany. We had — I think parts per million — the particles in the air in the 700s, where you couldn’t breathe. We finally just drove up there to really kind of see how bad it was. And it was pretty bad. It was one of the worst I’ve seen, and I was born and raised there.

So this year as a dealer, you’ve dealt with wildfires, the pandemic, social injustice.

I hate to say, “What’s next?” I’m just glad that there’s only three months left in the year. I don’t know how many more arrows we have in our quiver. So you know, we’ll just keep reaching back there and plugging away until we don’t have anything left.

But you know, like I say, car dealers have been resilient for years and years and years because we’ve always had to deal with this or this or this or that. Pandemic, tariffs. You know, you almost want to bow up and say, “Bring it!”

But you know, at the end of the day, you’d really like to just sell cars and make customers happy and make a living and go home. But certainly, we’ll be prepared to deal with whatever life has for us.

Is Hyundai pushing its facility image programs right now?

Hyundai is out there publicly speaking. And I think other manufacturers are, you know, behind the wall speaking, I just don’t think they’re as loud as Hyundai.

I get the facility thing, but there’s a time and there’s a place for it. I think coming right out of the pandemic may not be the best time for it. And maybe not because of the financial wherewithal or the soundness of the store today, but again, we don’t know how long this goes on. Nobody knows.

Things could all change on the inside of a building as well. And we’re all basing it on pre-COVID design. Is there after-COVID design? I don’t know. So should we slow down and rethink that a little bit? We’ve got to have six-foot spacing in our showrooms. Do we need private areas? Do we need different ventilations? Nobody wants to go spend $10 million on a building and then have post-COVID retrofits that cost three more million dollars. Nobody’s got an appetite for that.

“If it’s not the tariffs, it’s this. If it’s not the downturn, it’s that. If it’s not the recalls — you know what I’m saying? So you’re always on your toes waiting for the next shoe to drop because it’s going to. I mean, it’s the car business.”

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