BEST PRACTICES

Collection Auto's Bernie Moreno cultivates managerial talent

Collection Auto Group’s Bernie Moreno, at the wheel, with five executives who came with him from Boston to suburban Cleveland when he bought Mercedes-Benz of North Olmsted in 2005. From left, they are Bob Laughton, Chris Sanner, Joe Arno, Helder Rosa and Chad Lozon.
By the numbers
Collection Auto Group
Where: North Olmsted, Ohio
Owner: Bernie Moreno
Stores: 19 rooftops, 25 franchises
Revenue: $500 million in 2013
Related Topics

Bernie Moreno was 28 and had no auto retailing experience when Boston dealer Herb Chambers hired him as general manager of a Saturn store. Nearly two decades later, as CEO of Cleveland's Collection Auto Group, Moreno sees big breaks for young talent as the cornerstone of his empire's rapid growth.

He has added one to four franchises each year since 2007, and the group's dedicated training team runs full-tilt developing new company managers who can spread the company culture to new locations.

Now 47, Moreno says Chambers' trust and support for a youngster "who hadn't worked a single day in a dealership" before he took over one were a revelation.

"What I got in Boston, I remember," says Moreno, who was born in Colombia. "That kind of opportunity is what attracts people."

His group has established a dedicated full-time training program led by Collection Vice President Gary Tilkin to groom future managers through hands-on experience.

"We hire young, aggressive people who want to advance," Moreno says. "We move them around to give them responsibility quickly."

He has a seven-member senior executive team, but Moreno also needs lots of fresh managing talent to fuel the growth of Collection Auto Group. His company has grown from a single store in turnaround in 2005 to a 19-rooftop multibrand company that expects revenue to hit $800 million this year.

The internally trained managers are how Moreno spreads his team-oriented company culture to new locations. "They're the ones who know how this company is supposed to work, who can bring it to life," he says. "We've gone from 20 employees to almost 900" and couldn't have done that "if we weren't all on the same page."

The youngest of seven children, Moreno was 5 when the family moved from Colombia to southern Florida in 1971.

He was immediately enrolled in kindergarten.

"I said I couldn't speak English. My mom replied, 'That's a technicality,'" he says. "My parents never let any of us play the victim."

Moreno's siblings include a former ambassador, a real estate mogul and a developer currently constructing 49,500 homes in Bogota.

But Moreno quickly fell in love with cars.

"I decided to go to the University of Michigan because it was close to the Motor City. That's how I interned at and later worked for Saturn. When my mother introduces me, I'm just 'my son who sells cars.'"

His background helped shape how Moreno does business. Mor-eno says his approach has four parts, starting with teamwork based on General Motors' former Saturn brand. He spent two years after college developing Saturn's customer assistance center and a year as a New England field consultant.

"I saw what can be accomplished with a very mediocre product," he says. "I wanted to see what could be done with better vehicles."

Moreno was a Chambers vice president supervising nine stores in 2005 when Mercedes-Benz offered to finance his purchase of a struggling dealership in North Olmsted, Ohio, a Cleveland suburb.

"I put up $250,000 from my 401k and a mortgage on a house," he said. Weeks later, Moreno moved his wife and four children from Boston to Cleveland, and a dozen other Chambers employees followed.

Moreno's team turned the store around quickly. By 2006, Mercedes gave it the first of eight straight Best of the Best dealer awards.

In 2007, Moreno started expanding, acquiring Porsche, Saab, Spyker and Lotus franchises and boosting sales of AMG-tuned performance cars and Sprinter commercial vans at his Mercedes store. He has been growing aggressively ever since.

Moreno took some low-investment flyers on low-volume brands. Saab, Spyker and Fisker are gone. But he still has Smart and Aston Martin to go with his higher-volume franchises.

He learned from the failures, particularly Saab. He bought a Saab store across the street from his original Mercedes dealership in 2007, a few years before GM sold Saab and four years before a 2011 bankruptcy left him with 158 vehicles without warranties.

Moreno bit the bullet, slashed prices 25 to 40 percent and sold all the cars "as is" within 90 days.

"Saab kicked my butt. We were ill-prepared for the financial hit," he says. "But without that we wouldn't have had an opportunity."

Moreno immediately turned the freshly renovated Saab building into a Mercedes used-vehicle center and was one of its certified pre-owned pioneers. "I now sell a hundred used Mercedes a month there," he says.

As the Collection stable grew, more manufacturers started approaching Moreno. Of his most recent seven expansion deals, six have been open points offered by Mercedes, Infiniti, Mini and Rolls-Royce.

Amid all the deals and franchises, patterns emerge.

Moreno focuses on luxury brands -- Porsche, Acura, Lotus, Aston Martin and multiple Mercedes and Infiniti locations. He believes in technology: LED lights for dealerships and employees get the latest electronics for productivity. And he likes to go big: 14 new buildings in the past 24 months, including $20 million to build the Fort Mitchell, Ky., Mercedes store that opened last October.

The new Mercedes store has the benefit of some of Tilkin's trainees.

While still grateful to Chambers for letting him run that first dealership, Moreno and trainer-in-chief Tilkin have updated the experience for their young charges with comprehensive training, feedback and some loose-reins oversight.

"We stress them but also support them to make sure they don't fail," Moreno says. "Nothing is more costly or demoralizing than turnover, so we're careful that they are prepared."

You can reach Jesse Snyder at jsnyder@crain.com.


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