DETROIT - Dealerships are waging "a war for talent," especially general managers, says Kenneth Gilman, CEO of Asbury Automotive Group.
"The general manager is the most critical individual in the dealership," Gilman told Automotive News editors and reporters last week. "The industry suffers from a shortage of experienced, quality general managers."
Turnover of general managers at Asbury's 96 dealerships remains high, Gilman says. But he says the rate fell at least 10 percentage points in the past year. He would not give specifics.
Annual turnover of salespeople at Asbury dealerships is "way over 100 percent," Gilman adds.
A typical Asbury general manager earns $275,000 to $300,000 a year, Gilman says.
"I want to have a big profitable store so I can pay my general manager a lot of money," he says. "If he's only making $125,000, he's either turned off mentally or is thinking about how to get another job."
But Gilman insists he has no plan to offer Asbury general managers an equity stake in the stores they run. Several other public dealership groups and many private dealerships do so.
"It's difficult to compete with a dealer who's offering 20 percent equity," Gilman says. "But we think we have career opportunities that pay significantly."
Asbury ranks No. 6 on Automotive News' list of the top 100 U.S. dealership groups. The New York company reported $4.96 billion in group revenue in 2004.
Gilman's acquisition strategy emphasizes import-brand and luxury franchises. He says the Big 3's loss of market share over the past 25 years has been "a disaster."
He says Big 3 brands tend to attract older buyers.
"When you get the people who are basically 39 and under, you have a real demographic wave coming that does not hold (the Big 3) in good stead. I'm not deploying my shareholder's money against this tide. I think it's a loser's game."
Gilman says he and other senior executives interview candidates for general manager jobs at Asbury dealerships.
He says he has asked regional executives to prepare development plans for general sales managers who could be promoted.
"Two years ago, I can't tell you they took me seriously," Gilman says. "This year, between 40 and 50 percent of the new general managers came from within."
A typical salesperson at a nonluxury Asbury dealership earns about $35,000 to $42,000 a year, Gilman says.
"Salesmen today make about the same amount of money they did 25 years ago," he says. "Twenty-five years ago you could support a family on that. Today you can't."
Asbury seeks to hire successful employees of other dealerships who aren't looking for jobs, Gilman says. He also wants Asbury to recruit assistant managers from specialty retail stores, such as The Gap or J. Crew.
Before he joined Asbury in 2001, Gilman worked for 25 years for Limited Brands, a clothing retailer.
Minority employees are well represented on Asbury sales staffs, Gilman says. But not enough of those employees are in management, he concedes.
Adds Gilman: "And women are really underrepresented."