Hundreds of millions in cost was jettisoned by the public groups. Penske Automotive had made a number of moves since fall 2008 to conserve cash and slash expenses. It cut about 10 percent of its global head count, or 1,500 workers, suspended its quarterly dividend, reduced executive and director pay and suspended the company's 401(k) match in the U.S.
By June 2009, it also had reduced inventory by about $500 million from a year earlier but continued to look for ways to cut overhead. Since the company leased most of its real estate, it sent letters to landlords asking for rent reductions and suspensions, which Kurnick said helped with expense control.
In September 2008, Group 1 had implemented a plan to cut $100 million in selling, general and administrative expenses in 2009 compared with 2008 levels. By February, it had boosted the target to $120 million.
Hesterberg and his team resized the group and did many things "you don't ever want to have to do."
"You basically had to pull every lever you could find because we didn't know how far it was going to drop," the CEO said.
Group 1 even eliminated the match on its 401(k) plan, which Hesterberg called "just the worst thing you can ever do. In many cases, that's a retirement plan basically for our employees."
Every quarter, the executive team evaluated how quickly it could bring back the match.
"People on the front lines out in the dealership ... a lot of them are not high-income people," Hesterberg said. "They rely on our ability to continue to pay them a competitive wage and benefit. We had to cut back further than we wanted in 2009."
In July 2010, Group 1 brought back 401(k) matches at half the pre-recession level and resumed full matching in January 2011.
The company was still fending off pressure from automakers to take more cars, but the strategy was succeeding. By the end of March 2009, the company had reduced inventory by $209 million from the year-end 2008 level. It had slashed new-vehicle stocks by approximately 7,000 units, considerably more than its initial target of a 6,000-unit reduction.