Many auto dealers assume publicly owned companies have many advantages over their privately owned competitors. Not so, said Steven Berrard, president and co-CEO of Republic Industries Inc.
'This mistaken belief is the cause of much of the apprehension that some dealers have concerning public ownership,' Berrard said in a speech Thursday, May 28, to the National Automobile Dealers Association Industry Relations Symposium and Roundtable in Chicago.
Republic is the nation's largest dealer group. It has about 300 franchises and pro forma 1997 sales of about $7.5 billion.
Berrard said publicly owned dealer groups like Republic have only one major advantage: a lower cost of capital.
He said public companies have several disadvantages, including the legal requirement that they must publish their financial results quarterly.
In addition, Berrard said, there is 'the constant demand from shareholders - not your brother-in-law - that you not simply sustain earnings, but that you raise earnings and that you do it every three months.'
Berrard said public dealers face a higher cost of doing business resulting from an increasingly lengthy 'laundry list of federal filing requirements.'
Berrard also addressed what he sees as the myth that 'Republic has some special ability to persuade manufacturers to its point of view.'
He said: 'If anything, we are under more intense manufacturer scrutiny than virtually any dealers in America.'
Berrard and other Republic officials have campaigned in recent weeks to clear up what they see as widely held misunderstandings about the company.