Sun Sentinel Palm Beach Edition
AutoNation on new route
Eyeing a weaker market for new vehicle sales this year, AutoNation announced a restructuring plan and layoffs “to improve efficiency and profitability.”
Fort Lauderdale-based AutoNation, the nation’s largest auto retailer, said Monday it plans to reduce costs by about $50 million as it realigns its operating structure.
Four top executives were affected by the move, with a total of 20 layoffs, according to spokesman Marc Cannon. He said AutoNation also closed its Dallas office.
AutoNation has about 700 employees at its headquarters in Fort Lauderdale and 28,000 in total across the country.
“We believe automotive retail will be challenging in 2019,” said Mike Jackson, AutoNation chairman, CEO and president, in a news release. He said improving the company’s performance by streamlining the company and producing more cost savings “will better position us for a changing market.”
While 2018 sales were strong, new light-vehicle sales are expected to fall slightly to 16.8 million units, according to the National Automobile Dealers Association. Some car buyers may put off their purchases due to higher interest rates and new vehicles prices.
Jackson also is chairman of the Federal Reserve Bank of Atlanta, which regulates banks in the Southeast region and provides feedback to the central bank, the Federal Reserve.
Last year, Jackson, 69, announced he would retire in 2019 after a new CEO was found by the board. That search is ongoing, Cannon said.
No replacement has been named for Jackson, but James Bender, AutoNation eastern region president, was named executive vice president of sales on Monday. On Tuesday, AutoNation’s stock closed at $36.18, down $1.48 or 3.93 percent in New York Stock Exchange trading.
AutoNation is consolidating its regional structure from three to two regions, Cannon said. As a result, “there were duplicate positions that we no longer needed,” but said he didn't have a number.
The company did announce that several top executives are leaving their post in the reorganization:
■ Lance Iserman, executive vice president and chief operating officer.
■ Tom Conophy, executive vice president and chief technology officer.
■ Dennis Berger, executive vice president and chief human resource officer, who will be leaving the company on Jan. 31.
■ Donna Parlapiano, executive vice president, franchise network, merger & acquisitions, and corporate real estate, who has retired.
AutoNation owns and operates more than 325 locations from coast to coast.
For 2017, AutoNation reported a 6 percent increase in profits to $434.6 million, or $4.43 a share. Revenue was down slightly to $21.5 billion, compared with $21.6 billion in 2016. The company’s 2018 earnings are expected to be reported in early February.
The company has been adding new services, including partnering with a car subscription service, Fair, and investing in online used-car retailer Vroom.