AutoNation Cutting Roughly 3,500 Jobs

Matt Posky
by Matt Posky
autonation cutting roughly 3 500 jobs

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]

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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.

  • Johnds Years ago I pulled over a vehicle from either Manitoba or Ontario in North Dakota for speeding. The license plates and drivers license did not come up on my dispatchers computer. The only option was to call their government. Being that it was 2 am, that wasn’t possible so they were given a warning.
  • BEPLA My own theory/question on the Mark VI:Had Lincoln used the longer sedan wheelbase on the coupe - by leaning the windshield back and pushing the dashboard & steering wheel rearward a bit - not built a sedan - and engineered the car for frameless side windows (those framed windows are clunky, look cheap, and add too many vertical lines in comparison to the previous Marks) - Would the VI have remained an attractive, aspirational object of desire?
  • VoGhost Another ICEbox? Pass. Where are you going to fill your oil addiction when all the gas stations disappear for lack of demand? I want a pickup that I can actually use for a few decades.
  • Art Vandelay Best? PCH from Ventura to somewhere near Lompoc. Most Famous? Route Irish
  • GT Ross The black wheel fad cannot die soon enough for me.