John Shanks' 24-year old son may see his name in lights someday, but he probably won't ever see his name at the top of a dealership sign.
The college-educated offspring of one of the automotive industry's most successful dealers wants to break into the entertainment industry, and that is just fine with Dad.
'He has absolutely no interest in this business,' says Shanks, one of four partners in Dobbs Automotive Group, which has stores from North Carolina to Memphis to Tucson. 'In fact, none of us have children coming along who are as zealous about it as we are.'
Lack of a firm succession plan was one reason Shanks, 58, and partners John Hall, 66; Jimmy Dobbs, 55; and John Collier Dobbs, 54, were open to the idea of joining Republic Industries Inc., but not the only reason. By the time Republic purchased Dobbs Automotive Group in 1998, the partners, together since 1975, had been toying with the idea of going public for nearly 10 years.
'We were operating like a public company already,' says Shanks. 'We had a mission statement, policies and procedures, discipline in our organization and no 'chromosomal ceiling.' The people running our dealerships had earned the right to run them.'
Dobbs, which had 27 dealerships and revenue of $900 million per year, also had reached the point where going public was a natural next step. Other multifranchise organizations were doing it, and it would eventually become difficult to compete with their large infusions of new capital.
'We felt that with rapid growth, there were a lot more opportunities for us,' says Shanks. 'We wanted to invest in technology and invest in additional sites for future growth. We simply couldn't afford to do that using only our profits.'
Shanks says the only question remaining was: Do we go public ourselves, or join forces with an existing public company like Republic? A major consideration was the potential impact on Dobbs' work force, starting at the top.
'Some dealers sell to a public company to gain an exit visa,' says Shanks. 'We weren't interested in walking away. I view this industry as my hobby as well as my vocation.'
Republic's philosophy of retaining existing management appealed to the partners. But it was the opportunities for the rest of Dobbs' employees that clinched the sale.
'We grew our own business based on the philosophy of partnerships,' says Shanks. 'When we acquired a dealership, we left in place the team that had made it a success. We also empowered them to achieve greater success. Republic's philosophy mirrored our own.'
Last year, after divesting five and selling four of its dealerships, the partners sold the remaining 18 dealerships to Republic in exchange for a combination of cash and Republic stock.
Of the four partners, only Shanks remains active in the day-to-day operations, as executive vice president. The others oversee other vast business interests, including Anheuser-Busch beer distributorships and Wendy's restaurant franchises, from the company's Memphis, Tenn., headquarters.
Shanks expresses great satisfaction with the arrangement after one year. He says Dobbs has achieved economies of scale in purchasing power, interest rates and floorplan expenses, all of which have increased the organization's profitability.
'We've also learned a lot from them about marketing our inventory,' says Shanks. 'At the same time, we believe they have benefited from the ideas we brought in, too.'
With nearly 400 franchises under the Republic umbrella, there are numerous promotional opportunities for Dobbs' employees. Shanks says it has been gratifying to see some of his most valued executives move on to larger dealerships in the past year. That has also enabled him to promote deserving middle managers to the top positions.
At 58, the man who began his career as a Ford salesman and rose to head one of the largest dealership organizations in America finds himself traveling more and working harder than ever. He professes to love every minute of it. But a few years from now?
'Well, I see myself on the golf course,' says Shanks. 'But then, I've been saying that every year since I turned 45.'