Fixed ops can be insurance in scary times

Sue Jacobson was devastated the day she arrived at work in the early 1990s and was told she was moving to the service department. To the hard-charging general sales manager, it felt like a demotion — perhaps punishment for having pointed out days earlier that her dealership was too dependent on vehicle sales.

In hindsight, it may have been the best career move she ever made. Jacobson turned the service department around, and it became a profit powerhouse for the dealership, now AutoNation Ford in White Bear Lake, Minn. It explains how the store, which Jacobson ran for more than 20 years, became one of the most profitable Ford dealerships in the country.

It's a useful tale to remember here in San Francisco where I've spoken to dealer after dealer about the challenges ahead. They're talking storm clouds. Headwinds. While the business has been good for several years, they are worried that the winds are changing.

There also have been conversations about disruption and how dealers should adapt amid predictions of rising autonomous fleets and declining vehicle ownership. Should I start a subscription service? Invest in a mobility fleet servicing center?

But even as dealers wrestle with these questions, they shouldn't forget about the insurance policy that a robust parts-and-service operation can provide. Buckling down on the basics truly can be a lifesaver, especially with challenging times ahead.

Looking back decades later on her "demotion," Jacobson is grateful. It made her realize that the fixed-ops department "truly is the financial security" of a dealership.

That's a lesson every dealer can benefit from.