Navigating the Curves (2011 BE100s Auto Dealer of the Year)

Losing a close family member is difficult. When that person is also the face, name, and driving force of a business, the loss can be compounded by concerns about legacy as well as financial well-being of the family as a whole. Butch Spencer, general manager of the dealership, recalls those challenging times. “Jenell worked very hard to make sure that her dad’s legacy lived on. I know that may sound like a cliché, but it is serious.”

An Industry in Turmoil
By 2009, demand for U.S. automobiles hit new lows. As part of its plan to streamline operations and reduce costs in the face of weak demand for its products, GM announced in May of that year that it planned to shutter 1,100 dealerships. As franchisors, automakers reserve the right to terminate agreements, and each dealership was notified by mail whether or not they’d be stripped of their business. For Jenell, it would mean the end of her father’s legacy. “I was on pins and needles because nobody felt that they were immune to possibly being on the list,” she recalls. “There were a lot of rumors flying, so one minute you might sit there and say, ‘Yes we’re OK,’ then the next minute you’re like, ‘OK, maybe we’re not OK.’”

Spencer recalls waiting for the letter to arrive. The mood at the dealership was somber to say the least. Employees who have been with the company for decades could have lost their jobs at any moment. “Talk about turning you inside out,” he says. “My God, it’s a wonder I didn’t end up with ulcers. I can’t imagine how Jenell felt.”

When the letter arrived stating that GM would allow the dealership to stay in business, “I immediately brought everyone together. Everyone erupted,” recalls Jenell. The jubilation would soon be tempered by the fact that the dealership was far from out of the woods.

The dealership had to be restructured to handle the abysmal business climate. Painful decisions had to be made, including a 20% reduction in workforce. “We asked others to step up and take on additional duties basically for nothing,” says Spencer. Ross also renegotiated contracts with its vendors–providers of lawn care, window washing, janitorial service, and IT services–to cut costs. “I can tell you in 2009 we decreased our expenses by more than $1 million, which probably would equate to 20% to 25%.”

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