'I'll never retire,' says John Peterson, president of Peterson Pontiac-GMC in Bloomington, Minn. 'I still enjoy the business, and my son Brad still allows me to come to work here.'
Sound familiar? Many long-time dealers face the same situation as Peterson: How to comfortably and successfully ease their way out. Peterson, the dealership president, and his son Brad, the general manager, have already set the process in motion.
As a past president and current director of the National Automobile Dealers Association, Peterson also is concerned with the situations that other dealers face - for example, in smaller markets where automakers want to reduce dealer ranks.
SEARCH FOR SOLUTIONS
Peterson describes an all-too-common scenario for a long-time dealer in a rural area. He has been there 40 years, his market has dried up, and he is sitting on an older facility and franchise while the carmaker waits for him to die - not a pleasant picture.
Peterson says carmakers must help. He suggests that rather than taking 18 to 24 months to buy a dealer out and take back the inventory, they should have a program that enables the dealer to walk away with the same retirement benefits as an employee on the assembly line - life insurance and discounts on new cars, for example.
Peterson suggests alternatives like allowing the dealer to continue by converting to a service-only facility that offers warranty work, repairs and parts. Or perhaps serving as a satellite outlet for new cars.
Most important, Peterson says, 'carmakers must reward (the dealer's) loyalty by helping him walk away with his dignity.'
Peterson also suggests that dealers have their facilities appraised. He says he was greatly surprised to find that his were worth considerably more than he anticipated.
And he says the recent wave of buyouts and acquisitions by Republic, CarMax and others may well 'raise the bar on the valuation' of a dealer's facility and franchise.
For the past two years, Peterson's primary role at his dealership has been working on plans for a completely new facility just a few miles away in a high-traffic location along a major Twin Cities freeway.
The experience of selling his existing facility opened his eyes to the possibility that the land and building might well be worth more as a nonautomotive site. That may offer dealers a broader selection of exit strategies. He suggests dealers ask themselves: 'What do I want to do with my investment?'
Peterson's son Brad has been the dealership's general manager for nine years. Brad is a graduate of St. Thomas University, but his dealer education started when he was a teen-ager. He washed cars and ran errands, eventually working in every department. Since both Petersons focused on making the succession from father to son natural, the transition has been seamless.
Peterson is quick to point out that the key to a successful exit strategy is having 'a qualified individual you want to take over the dealership' - whether a family member or employee. And since the new-car franchise is the heart and soul of the dealership, Peterson says 'the carmaker needs to get familiar with that person, including reviewing the facility, planning potential, CSI and profitability.'
In Peterson's case, the GM dealer addendum gives Brad a three-year transition period before assuming full responsibility and ownership Peterson has been approached to sell the dealership, but he never seriously considered the offers. 'The dealership isn't a career or a business, it's been a way of live for my entire family,' he says.
These days Peterson spends two-thirds of his days at the dealership. 'I still like selling cars and meeting customers,' he says with a smile.
But he does enjoy one aspect of his 'non-retirement.' He and his wife Jean travel extensively. This time of year they spend as much time as possible skiing in Vail, Colo.