As CEO of the future Berkshire Hathaway Automotive, Jeff Rachor is positioned to push the accelerator of growth.
It's a role he knows well. Rachor (ROCK'-er) has helped the Van Tuyl Group, the fifth-largest dealership group based in the U.S., add a handful of stores annually since becoming COO in 2010. Before that, he headed a computer mogul's short-lived dealership rollup operation after leading public retailer Sonic Automotive Inc.
Now, with Warren Buffett's Berkshire Hathaway buying Van Tuyl, the retailer's acquisition pace is likely to pick up speed.
"We're excited about the potential to accelerate growth under the Berkshire Hathaway flag, but we're going to do it thoughtfully," Rachor told Automotive News.
Some auto-retail experts speculate that Rachor was tapped at Van Tuyl with this type of transaction ultimately in mind.
Rachor is an expert at how to do acquisitions and how to buy at the right price, said Erin Kerrigan, managing director of Kerrigan Advisors in Irvine, Calif. "They're smart buyers. They'll definitely continue to grow," Kerrigan said.
Rachor held various executive positions at Sonic from 1997 through 2007, ultimately becoming president. He left Sonic for a 13-month stint as CEO of the Pep Boys - Manny, Moe & Jack aftermarket parts chain. In the 1980s, Rachor worked in sales and marketing at Buick and American Suzuki Motor Corp.
Between Pep Boys and Van Tuyl, Rachor was CEO of MSD Automotive Partners, a venture he launched in 2008 with computer mogul Michael Dell's New York investment firm, MSD Capital. MSD planned to invest up to $500 million to buy "premier" auto dealerships.
But the plan stalled when auto sales hit the skids in 2008-09, and the dealership buy-sell market dried up.
Joe Herman, executive vice president of Kuni Automotive in Vancouver, Wash., worked closely with Rachor on the Dell initiative.
"The timing was terrible," Herman said. "The industry had its downturn almost immediately, like months after the venture was announced."
Now Rachor will have a new opportunity.
"I think Jeff is part of the top 1 percent of the top 1 percent in the industry," Herman said. "He's an absolute perfect leader for this, and those of us who know him well couldn't be more excited for him."
While the Dell experience didn't ultimately allow Rachor to buy dealerships, Kerrigan said, Van Tuyl has "been relatively acquisitive" with Rachor as COO.
"He understands the private-equity world as well as the public-equity world, and he is uniquely positioned to do this," she said.
Rachor says a key part of the future Berkshire Hathaway Automotive's growth will be preserving the Van Tuyl business model. That model calls for every store general manager to be a minority owner of the dealership or on a track to become one.
"I've been very blessed to have a lot of unique experiences in our industry and work with some incredible leaders and teammates, and, through those experiences, I've learned the best practices and the worst practices," Rachor said. "And I believe that the Van Tuyl business model is the best business model because, first and foremost, this is an entrepreneurial business, and it's all about people."
With its approach, Van Tuyl has been able to attract, retain and motivate entrepreneurial managers, which are the foundation of success in auto retailing, Rachor said. Warren Buffett was attracted to that model and is interested in spreading it, he said.
"One of the things I'm most excited about in this transaction," Rachor said, "is our ability to preserve and even expand that business model."
Arlena Sawyers contributed to this report.