When a public dealership group recently approached Tim White and his brothers about selling several of their stores, the family sat down to consider its future.
"We decided we really didn't want to get out of the automotive business," said Tim White, whose grandfather, Hugh White, founded the business. "It's a wonderful base."
So after 98 years of selling cars, the White family will move into a second century in the auto industry. Tim White and his older brothers, David and Jim, run the White Family Dealerships, and two members of the fourth generation, Dave White Jr. and Tim White Jr., work for the family business and are in line to take over.
White Family Dealerships consists of four holding companies with 16 stores in Ohio, Wyoming and South Dakota. The group ranks No. 73 on Automotive News' list of the top 125 dealership groups.
The brothers are busy expanding the family's footprint. The Whites purchased a Ford store in Spearfish, S.D., last December and a second Ford dealership in Orrville, Ohio, in February. The acquisitions will boost the White enterprise to estimated sales of $585 million in 2012, up from $500 million last year. In its last six purchases, the family took on an operating partner who owns up to 15 percent of the dealership. If the partner doesn't have the money at the time of the purchase, the Whites will offer financing.
The family would like to buy one more store in 2012, Tim White said. White spoke with Staff Reporter Amy Wilson.
Q: How did your family get started selling cars?
A: My grandfather got in the business in 1914 in southeast Ohio, near Zanesville. My father and two uncles got into the business with him. During the '50s and early '60s they built a 13-dealership chain. They were all General Motors stores. At that point GM came out with a chain dealer policy. They made my grandfather and my father dispose of many dealerships they had.
When my father died in 1980 we had to get rid of what was left [except for two]. We ended up with two Chevrolet stores, two Honda stores and a Toyota store.
Were you able to keep the one your grandfather started in 1914?
Oh, my grandfather had gotten rid of that store when he moved to the big city of Zanesville. My grandfather was an interesting individual, one of these rags-to-whatever stories. He was an orphan, and a gentleman around Zanesville, Dr. Miller, brought him as a foster child to live with his family. My grandfather Hughie was expected to work on their horse farm. From that he learned about horses and got into the livery business when he was 18. He got into the automobile business from that. It was a good move.
Then the manufacturer cut us back. My brothers and I have grown the business back up to a little bit better than when my grandfather ended.
Did you always want to grow and be a chain again?
When we took over, it was back in the early '80s, and it was hard back then. Our major focus was keeping what was left viable. We sort of plodded along until '98. Back in , I bought a place in Wyoming. I decided I like it out here so much, I'd like to live here. We hired a dealer broker to find us a store out here, and we got one in 1998. That's when we really got serious about expanding. We sort of went on a buying spree.
How difficult is it to manage properties in such far-flung geographic locations?
We believe that what you do in Dayton, Ohio, doesn't necessarily work in Columbus, Ohio, or Casper, Wyo. We don't have a cookie-cutter approach to marketing, to sales processes. We run the store according to how the community reacts.
In our Western stores, the percentage of people that charge service and won't use a credit card is probably three times what it is in our Eastern stores. They just expect to be able to be billed for it. It's the old ranching philosophy that has carried over.
In our Eastern stores, 30 to 40 percent of our new-car business is leasing. Out West, we run under 10 percent. Why is that? Well, nobody drives under 15,000 miles a year. You have to model your business to the circumstances. We're not McDonald's.
Are you working on an acquisition now?
It seems like everything I work on turns into Jell-O. I do not have anything specific at this moment. We can handle one more store, managementwise, but back East, we're going to have to do another operations manager [to expand]. Right now our expansion is limited to our ability to manage it through these operational managers. I've got guys who can be general managers and partners. It's the other that's the problem.
So for 2013 and beyond, you want to expand but you have to solve that dilemma first?
Right. I originally had a goal that I'd like to see all of our stores have combined sales of $500 million. Well, we've hit that. Now what do we do as a family to continue the growth? If you want to get to $750 million, it's going to require additional stores.
When you acquired your Ford store in Spearfish last year, you said you wanted to become one of the top 50 largest dealership groups in the country. Is that still a goal?
I don't know that it is anymore. My goal is to maintain at least a 3.5 percent return on sales. We want to do smart growth, not growth for growth's sake to be in the top 50. We want to continue with manufacturer diversification. We'd never been a Ford store until last December. Now that we've got two, I'm thinking, "Why didn't I do this before?"
What do you think of manufacturer image programs such as GM's Essential Brand Elements?
In general, the manufacturers are getting too involved in the retail process. What they need to do is go back to building a decent product and distributing it evenly throughout the network and providing sales tools to the dealers to get the job done in their own communities.
If you look at EBE specifically, it's almost revenue-neutral. The amount of money you can earn through the program pretty much offsets the expenses you'll incur. But then you look like everybody else. Is it GM's feeling that all dealers are the same and there shouldn't be any differentiation? That's what they're trying to do.
What are your biggest challenges right now?
One of the reasons you don't see a lot of 100-year-owned family businesses is the tax code. Our biggest challenge as a generation is to figure out ways to effectively structure our operating companies so future generations can benefit from what we've built up today.
[For the industry] there still needs to be a consolidation of the dealer body in general. The size of the dealer body is still going to be a challenge.