Jimmy Walker had left Laurel Ford Lincoln Kia Inc. (No. 59 on the BE Auto Dealers list with $21.7 million in revenues) in the hands of his managers to focus on his other dealerships. But when the business lost a combined $1.4 million in 2007, 2008, and 2009, the 25-year industry veteran was compelled to return to stop the red ink before transitioning the business to his daughter.
The losses were largely a result of a miscalculation of the severity of the nation’s economic crisis that devastated the auto industry, says Walker. “I didn’t think that it could drop that far,â€ the CEO asserts. “It was a poor business decision.â€ But Walker remained resilient. He went back to Laurel Ford after a five-year absence and, over time, sold his three other dealerships in Mississippi, Louisiana, and Tennessee.
The first order of business was to cut expenses at the Laurel, Mississippi-based dealership. This consisted of firing the store’s general manager and parts and service director. He cut expenses from about $458,000 per month to $225,000 and reduced payroll by cutting the staff from 68 people to about 29 at that time. Walker asked the remaining employees to take a 15% pay cut, stopped taking a salary, and cut the advertising budget by about 85%. He also put more attention on the used-car business as Ford cut production on new vehicles. The dealership now has about 38 full-time employees.
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