Tom Price is no longer a CEO, but he is too busy with his new responsibilities in a larger company to be concerned.
'I may have a smaller percentage of a larger pie, but I have a major influence in the direction of the company,' says Price, former CEO of FirstAmerica Automotive, a privately owned, 29-store dealership group that was based in San Francisco. In December, FirstAmerica merged with Sonic Automotive Inc. of Charlotte, N.C.
Sonic is now the one of the largest publicly held dealer groups in the United States. It closed the $232 million stock and cash purchase of FirstAmerica in mid-December, and Price became vice chairman of the enlarged organization.
Dealerships of the combined firms are in locations that complement rather than overlap each other. Sonic now has 106 dealerships in a dozen states throughout the South and in Maryland.
With 29 dealerships - 28 in California and one in Nevada - FirstAmerica gives Sonic a strong foothold in California, which accounts for 10 percent of the new-car and light-truck sales in the United States.
'My plan is to bring a lot of what FirstAmerica was doing right to the business,' Price says. 'This is a good partnership.'
The management team, brand diversity and the extensive geographic coverage of the combined companies will lead to continuing growth, he says.
In 1999, Sonic acquired 71 dealerships that had $2.9 billion in 1998 revenue. FirstAmerica's revenue totaled $1.6 billion in 1999.
Price, 56, started his auto career as a salesman at a Ford dealership. In 1976, he bought an Oldsmobile dealership in Colma, Calif., which he has since sold. He built up a group of six dealerships under the Tom Price name and expanded under the FirstAmerica Automotive label.
In 1999, Price was hoping to take the company public. But in August, he decided to change direction because of an unfavorable market for initial public stock offerings. After talks with several companies, he teamed up with Sonic.
'We were similar companies, and we put the deal together in short order,' he says. 'We made the decision because we wanted to continue to grow. We are car people. This is about bringing a higher level of customer service to the business.'
Now Price is in charge of investor relations and has lead responsibility in acquisition review. Those duties are not completely foreign to him as he was instrumental in building up FirstAmerica Automotive in recent years.
O. Bruton Smith, Sonic chairman, has said that FirstAmerica's management team and ability to grow were major factors in his interest in the company. In fact, when they agreed to merge last August, FirstAmerica was adding more dealerships to its lineup. The acquisitions were completed before the Sonic purchase closed.
PROSPECTS FOR GROWTH
Sonic also cited FirstAmerica's Internet strategy, which enables it to serve California's technologically knowledgeable population. Ten percent of its 1999 sales came from Internet leads, Price says.
'We still find customer contact to be a big part of this business,' he says.
'We think Internet referrals will continue to grow but will never be so revolutionary that we lose customer contact.'
Overall, he is excited about the prospects for further growth.
'We are in the business to grow and acquire additional dealerships,' he says. 'In five or 10 years, we hope to turn this company into one of the dominant retailers in the United States.'