New ADESA president will hit ground running

February 26, 2018 12:00 AM

Hammer: “We'll focus on making changes the customers want most.”

John Hammer has mapped out his first weeks as president of ADESA, even before he steps into the corporate headquarters of parent company KAR Auction Services Inc., in Carmel, Ind.

He'll be on the road visiting the auto auction house's customers, asking what products and services they consider most important and how they think ADESA can improve.

"I'll let our customers drive what's first," he said in a detailed interview shortly before officially rejoining his former company today. "That involves me getting out to see customers. They'll have ideas."

Hammer, 47, expects to get lots of reaction and suggestions from customers about technology and data innovations launched in recent years by ADESA, for its 75 U.S. physical auction sites and its online auctions.

"Then we'll focus on making changes the customers want most," he said, such as process improvements and tweaking "throughput, speed and ease of use."

'Bags packed'

Hammer won't be alone on the road. He's spread the word "to get out to see the customers" to ADESA support staff in Carmel and at auction sites.

"It's time to get their bags packed," he said. "We don't actually transact business in our offices, but in our customers' [space]. We'll be better leaders and better stewards of their businesses" after visiting customers' locations.

President, ADESA

John Hammer

Age:47

Education: BSBA in finance, Tennessee Technological University, Cookeville, Tenn.

Previous: CEO, US Auto Sales, Duluth, Ga.

Prior work at KAR: COO, 2009-14; CEO, 2014-16 at Automotive Finance Corp.

Other experience: Mercedes-Benz Financial, AutoNation, Ally Financial

For all the ways ADESA operates, its business is essentially simple.

"We want to be faster and better," he said. "We're going to go where our customers want us to go."

Hammer will hold off on setting his first-year goals until after he and staffers have visited and listened to clients.

"I think the goals will be developed after the staff has talked to customers," he said. "After [that], we'll all develop a business plan, look at initiatives, set priorities and then implement. We'll get together as a team."

Hammer replaces ADESA CEO Stephane St-Hilaire, who resigned but agreed to serve through February to provide continuity, the company said.

Returnee

Hammer is returning to KAR after 20 months as CEO of US Auto Sales of Duluth, Ga., a 21-store buy-here, pay-here subprime used-car retailer.

In his 2009-16 stint at KAR, Hammer served as COO and later CEO of Automotive Finance Corp., KAR's captive lender.

He held a variety of related jobs prior to that as a Mercedes-Benz Financial manager, dealership general manager for AutoNation Inc., and several posts at Ally Financial and Ally's Saab and American Suzuki captive lending subsidiaries.

Hammer believes the broad background in related fields helps him better understand what ADESA's customers want and need.

"I look at the business from a customer perspective," he said. "I've been an ADESA customer at my most recent job."

Hammer said he has been a remarketer his whole career.

"I've bought and sold as a car dealer at auctions, I've worked both sales and finance arms, I've run finance companies and dealership groups," he said. "It's always good to have worked in the space where your customers are."

Challengers

Hammer said ADESA's biggest immediate challenge is the one all auto auctions face.

"It's new competitors moving into our space," he said. "They're coming at us from all different directions. I think we're ahead of the curve with TradeRev and other initiatives."

TradeRev's dealer-to-dealer mobile app lets dealers buy used vehicles before those cars or trucks reach ADESA's physical auction sites. A new version that launched in December — two months after KAR acquired the half of TradeRev it didn't previously own — adds support features such as scheduling individual dealer auctions and paying on mobile devices.

Other recent tech-firm acquisitions include Drivin, a data-analytics company that uses pricing, registration, retail and economic data to match inventory with demand, and, this month, mobility and fleet management software company Stratim.

"We're in the process of building that technology," Hammer said "We're not at the level of 'finished' yet, but we're a leader in that space."

KAR Chairman Jim Hallett has said Hammer will focus on integrating technology and data into the ADESA operation.

Will there be more acquisitions? Hammer said because KAR is a public company he had to be cautious about forward-looking statements, "but past performance is often a predictor for future performance."

Hammer called the auction sector "really ripe for change" and constantly evolving.

"Of course, competition drives us all to thinking about new ways of remarketing," he said.

Startup digital auctions and other newcomers have disrupted the auction industry by bypassing the need to invest in large acreage, buildings and other infrastructure. The traditional cost barrier to segment entry has faded, Hammer said.

'Huge advantage'

But established auction houses responded by investing heavily in their own digital transaction networks, ancillary services and data analysis, especially the two largest traditional auction groups: KAR and Manheim, part of Cox Automotive.

"Still, physical auctions have a huge advantage in size and capacity of physical sites and infrastructure," Hammer said. "The ability to conduct transactions, even digital, on site is a huge competitive advantage. Newcomers can't match that combination of size and range of services."

In a way, a network of physical sites and a large portfolio of services — such as transportation, financing, central processing, servicing and reconditioning cars — has created a new sector entry barrier, he believes. Rich customer data sets and analysis add to that.

"When customers look for data, smaller players can't match that," Hammer said. "Newcomers are most at disadvantage on depth of data, but smaller auctions just have less data because of smaller volume.

"We're going to enable customers to do business how they want and when they want. They'll look to us for data."

Hammer said he's eager to rejoin ADESA. "I'm excited to be back with the remarketing industry," he said. "I have missed seeing customers that I've done with business with. I even missed the smell of exhaust in the auction lanes."