The suits were buzzing around his store, and General Manager Paul Whatley was scared.
It was the summer of 2010. Whatley was running Gene Reed Toyota & Scion in Charleston, S.C. Publicly owned Group 1 Automotive Inc. was looking to buy it.
"We called them the suits," recalled Whatley, 50. "They were in and out of the store, and everybody was nervous."
The suits, he said, seemed to care more about the finances than the employees -- a view Group 1 disputes.
Ultimately, the Group 1 deal went south and Hendrick Automotive Group bought the dealership. Founder Rick Hendrick spent hours talking the staff, including Whatley, into staying on to work for him. Whatley is now a market area vice president for Hendrick Automotive.
Taking care of legacy employees is critical for closing the acquisition of a dealership, buy-sell advisers say. If sellers get cold feet, often it is because they believe the prospective buyer will not be a good employer to their longtime, loyal work force, those advisers say.
Hendrick agrees. He credits his reputation for caring about his people as one of the reasons he gets a lot of chances to buy dealerships.
"People are your biggest asset," said Hendrick, 65. "I try to put myself in their place when I'm closing a deal."
Out of Hendrick's last 10 acquisitions, in only one case was the general manager let go, Hendrick said. Typically, three years after an acquisition, about 95 percent of the office staff, service and parts managers and general managers still work for the dealership group, he said.
In contrast, typically about half of acquired employees, or more, leave a dealership within the first three years of the sale, said Erin Kerrigan, managing director of buy-sell firm Kerrigan Advisors in Irvine, Calif.
Many dealerships that are sold have been underperforming, and the buyer has aggressive plans for change, Kerrigan said.
"Some of the legacy employees are not always on board for the change in management style and focus," Kerrigan said. "Hendrick would be unique with its high retention rate. I believe their retention rate is a reflection of the fact that they focus their acquisition strategy on higher caliber, well-run dealerships, rather than turnaround projects."
Hendrick Automotive has 94 dealerships, having acquired 36 since the start of 2010.
When Warren Buffett's Berkshire Hathaway Inc. closes on its purchase of the privately owned Van Tuyl Group in the first quarter of next year, Hendrick Automotive will become the largest privately held group.
Hendrick Automotive ranks No. 6 among all dealerships, including those that are publicly traded, on Automotive News' list of the top 125 dealership groups based in the U.S., with retail new-vehicle sales of 102,750 units in 2013.
As Hendrick continues to expand his empire, he is perfecting his technique for assimilating legacy employees after an acquisition.