AutoNation Cutting Roughly 3,500 Jobs

Matt Posky
by Matt Posky

After furloughing staff in response to the coronavirus pandemic, AutoNation has gradually allowed employees to return back to work. Half of the 7,000 people asked to take it easy in April won’t be coming back at all, however.

The automotive retailer has decided to permanently cut 3,500 jobs so it can focus on its bottom line and what it has unsettlingly called “the new normal” — a term frequently used to rationalize unsavory actions taken during the health crisis.

With customers unable to leave their homes to purchase cars, it’s to be expected that America’s largest automotive retailer would need to engage in some light restructuring. It also happens to have the best excuse imaginable for nuking a large portion of its workforce. Back in April, when the AutoNation was furloughing employees, it received nearly $95 million in federal small-business funds via the Payment Protection Program (PPP). A subset of anonymous staff members were said to have leaked the details to the media after deciding the firm was taking cash allocated for smaller outfits.

Outrage ensued and the company sheepishly returned the money.

Marc Cannon, AutoNation’s chief customer experience officer, explained the situation to Automotive News — noting that some employees may return once vehicle sales stage steady improvements.

“The business environment continues to change and AutoNation is adapting by restructuring and reducing the work force,” Cannon said. “At AutoNation we have adjusted to the new normal, which focuses on digital and store efficiencies. We have made strategic adjustments to capitalize on the digital marketing and website actions. As a result, we have made the difficult decision to eliminate approximately 3,500 positions in the field and at headquarters, most of which were associates on unpaid leave.”

From AN:

As part of its restructuring, AutoNation is combining its Tennessee and Virginia market with its Georgia and Northeast markets, resulting in some market-level employees being let go, Cannon said.

In early April, AutoNation also announced it had temporarily cut employee base pay, frozen hiring, trimmed advertising costs by about half for the second quarter and was postponing more than $50 million in capital expenditures.

It also said CEO Cheryl Miller, who was later granted leave for undisclosed health reasons, and Mike Jackson, the company’s chairman who has resumed CEO duties until Miller returns, each took 50 percent salary cuts, while other executives, corporate and regional staff took pay cuts of 20 to 35 percent.

The company said April 24 that it returned $77 million in federal Paycheck Protection Program loans for 83 stores.

Original reports claimed the company received around $95 million from PPP.

Worth a tidy $3.1 billion, AutoNation undoubtedly suffered from the extended lockdown, but it could have been much worse. Despite losing about half its stock value in March, the firm has since seen shares seesawing back to normal. Wall Street has actually proven pretty forgiving in general, not that that meshes with anything we’re seeing on the ground. Automotive entities have all taken financial hits and only Hertz seems incapable of rebounding.

We’re not sure if we should attribute the oddly healthy trading as a sign the public has faith in the economy turning a corner, or as more evidence that investors don’t live on the same planet as the rest of us.

Meanwhile, AutoNation is embracing online sales. Local governments forcing brands to close shop gave them little recourse but to find new ways of doing business. Economists suggested swapping to a more digital model would help entities endure the pandemic and help firms reduce overhead, as they’d need fewer employees. Some urged caution, noting that widespread shifts away from physical retail locations will likely exacerbate national unemployment rates and disproportionately benefit the biggest companies while smaller business continue to struggle, or simply whither and die.

Like many auto retailers, AutoNation was shifting toward indirect sales prior to 2020. The retailer claims the percentage of sales originating online grew 35-45 percent over a single month of the pandemic.

[Image: Image: Felix Mizioznikov/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Goatshadow Goatshadow on Jun 05, 2020

    World’s tiniest violin for AutoNation, the worst dealership experience in town.

    • See 2 previous
    • FreedMike FreedMike on Jun 05, 2020

      My daughter bought a new Hyundai at an Autonation store last fall. She got a good deal and the buying experience was pleasant.

  • Avnut Avnut on Jun 05, 2020

    AutoNation informed me today (6/5), that my entry level tech position with one of their Ford dealers has been eliminated. Actually, all of the entry level tech positions have been eliminated at the dealership.

  • Redapple2 jeffbut they dont want to ... their pick up is 4th behind ford/ram, Toyota. GM has the Best engineers in the world. More truck profit than the other 3. Silverado + Sierra+ Tahoe + Yukon sales = 2x ford total @ $15,000 profit per. Tons o $ to invest in the BEST truck. No. They make crap. Garbage. Evil gm Vampire
  • Rishabh Ive actually seen the one unit you mentioned, driving around in gurugram once. And thats why i got curious to know more about how many they sold. Seems like i saw the only one!
  • Amy I owned this exact car from 16 until 19 (1990 to 1993) I miss this car immensely and am on the search to own it again, although it looks like my search may be in vane. It was affectionatly dubbed, " The Dragon Wagon," and hauled many a teenager around the city of Charlotte, NC. For me, it was dependable and trustworthy. I was able to do much of the maintenance myself until I was struck by lightning and a month later the battery exploded. My parents did have the entire electrical system redone and he was back to new. I hope to find one in the near future and make it my every day driver. I'm a dreamer.
  • Jeff Overall I prefer the 59 GM cars to the 58s because of less chrome but I have a new appreciation of the 58 Cadillac Eldorados after reading this series. I use to not like the 58 Eldorados but I now don't mind them. Overall I prefer the 55-57s GMs over most of the 58-60s GMs. For the most part I like the 61 GMs. Chryslers I like the 57 and 58s. Fords I liked the 55 thru 57s but the 58s and 59s not as much with the exception of Mercury which I for the most part like all those. As the 60s progressed the tail fins started to go away and the amount of chrome was reduced. More understated.
  • Theflyersfan Nissan could have the best auto lineup of any carmaker (they don't), but until they improve one major issue, the best cars out there won't matter. That is the dealership experience. Year after year in multiple customer service surveys from groups like JD Power and CR, Nissan frequency scrapes the bottom. Personally, I really like the never seen new Z, but after having several truly awful Nissan dealer experiences, my shadow will never darken a Nissan showroom. I'm painting with broad strokes here, but maybe it is so ingrained in their culture to try to take advantage of people who might not be savvy enough in the buying experience that they by default treat everyone like idiots and saps. All of this has to be frustrating to Nissan HQ as they are improving their lineup but their dealers drag them down.
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