Bob Johnson Opens Car Dealership

Robert L. Johnson, founder of The RLJ Cos. (parent company of RLJ Development L.L.C., No. 8 on the be industrial/service list with $460 million in sales), has widened the road for aspiring minority car dealers with a new automotive partnership.

Johnson, 61, is the majority owner of the RLJ—McLarty—Landers Automotive Partnership. The dealership group, headquartered in Little Rock, Arkansas, will carry Chrysler, Dodge, Ford, Jeep, Scion, and Toyota models.

“We’re about a $400 million-plus business in total revenues,” says Johnson, who is a 60% invested partner. Johnson, who will serve as chairman, joins Thomas F. “Mack” McLarty and Steve J. Landers of McLarty-Landers Automotive Group in creating one of the country’s leading, privately owned auto partnerships. McLarty and Landers will serve as vice chairman and president, respectively.

Increasing the numbers of minority-owned auto dealerships is one of the central issues driving the group. Currently, African Americans own less than 2% of America’s 41,000 car dealerships, and ethnic minorities own 5%. “I’ve always been interested in investing my capital with the right strategic partners,” says Johnson. The goal is to attract minorities who already have a successful track record in the auto industry and align them with opportunities to buy dealerships.

Damon Lester, president of the National Association of Minority Automobile Dealers (NAMAD) believes Johnson will move the needle for minority-owned stores. NAMAD plans to work closely with Johnson. “There are currently 24 highly qualified African Americans (general managers and general sales managers) in NAMAD’s database, ready to run a store,” Lester says. Through NAMAD and Johnson’s name recognition, RLJ—McLarty—Landers Automotive Partnership shouldn’t have difficulty creating a pipeline of well-trained minority managers, which should eventually lead to in-dealership ownership opportunities.

“We hope to find the best of the best and give them the opportunity to join us,” he says. “Our goal is to grow the company to $1 billion plus in revenue in three to five years.”

Johnson says discouraging domestic sales forecasts didn’t dim his investment decision. Stephen T. Washington, managing director of Cleveland-based Black Wealth Network, says Johnson’s investment, while on the heels of a down market, is a smart choice.

“I think it’s a good deal for him. Typically, when industries are down in a cycle, that’s the best time to invest,” Washington says. Plus, “he’s taken advantage of niche areas where African Americans are not major players. African Americans are still underrepresented as dealers, and probably all up and down the supply chain.”
Additional reporting by Jeff Fortson