When Mike Jackson takes the wheel of AutoNation Inc., he'll have to do something that H. Wayne Huizenga and Steve Berrard couldn't do: Excite Wall Street by making the vision of a new and better retailing system actually work.
Jackson, who becomes president and CEO of the nation's largest dealership group Oct. 11, replaces Huizenga and Berrard, who have been co-CEOs since the company's inception. Huizenga remains chairman and Berrard remains a board member.
The job comes with some serious challenges, including: a deflated stock price, the creation of a national brand and the introduction of a culture that clashes with traditional auto retailing methods.
But Jackson, 50, said those challenges lured him away from his enviable post as president and CEO of Mercedes-Benz USA Inc.
Jackson, who refers to the new position as his 'absolute dream job,' refused to disclose what his salary will be at AutoNation. But Jackson did say that a 'significant' portion of his compensation is tied to AutoNation's stock price, which makes sense since one of his most important jobs is to increase shareholder value by raising the share price.
Moving the stock price will take time. After Jackson's hiring was announced on Friday, Sept. 24, it remained about $12 per share.
Still, Jackson says his combination of retail and manufacturing experience will help him build the company and add shareholder value. Before joining Mercedes-Benz, Jackson ran a successful Washington-area dealership group. His leadership helped Mercedes-Benz double its sales in 10 years.
Jackson is undaunted by AutoNation's controversial shift away from the conventional price negotiation. This year, Mercedes-Benz prodded dealers to adopt no-haggle pricing by cutting the dealer discount, which is the spread between the dealer invoice and the sticker price, expressed as a percentage of the sticker. Although dealers initially balked at the cut in the discount, Jackson believes most have embraced the strategy.
'Any time you change fundamental business processes and ask highly talented people to leave behind skills they have honed and learn new skills, it is difficult,' he said.
AWAY FROM THE PACK
Perhaps the biggest challenge for Jackson will be to distinguish AutoNation from the pack. Though sheer size separates the company from other auto retailers, Wall Street wants to see more than just another big dealership group. The company has faltered in its vision to revolutionize auto retailing and has had to modify its game plan.
Jackson said he admires AutoNation for its ability to admit mistakes and correct them, but he believes that the company must stick with its vision. 'At Mercedes-Benz, I had a strategic plan. We executed it with a high degree of professionalism,' he said.
And Jackson believes he will have the authority to carry out his mission at AutoNation. Although Huizenga remains chairman, he has relinquished the reins to Jackson.
Said Jackson: 'I am used to working with powerful individuals. I have been hanging out with them for a long time.
'At the end of the day, it's my responsibility to provide the leadership. That's what Wayne wants from me and that's what I will do for him.'