Penske Automotive Group Inc. has furloughed more than half of its global work force — including 5,300 in the U.S. — and terminated about 500 employees to help quell disruption from the coronavirus pandemic that began in March.
With its sales and service business now improving, Penske plans to bring back about 500 U.S. dealership employees this month, mostly in parts and service, plus hundreds of workers in the United Kingdom.
The nation's second-largest new-vehicle retailer reported that U.S. vehicle sales in April tumbled 53 percent on the new side and 42 percent on the used side, but executives said sales significantly improved in the last 10 days of the month vs. the first 10 days.
Through the first five days of May, U.S. new-vehicle sales fell 29 percent and used-vehicle sales dropped 18 percent vs. prior-year results.
Net income for the Bloomfield Hills, Mich., company slid by nearly half in the first quarter to $51.5 million amid the drop in business.
Last week, Penske said it was suspending its stock dividend, a move expected to save about $34 million in cash in the second quarter. In addition, Penske aims to trim $75 million to $100 million from its annual costs. The company slashed executive pay including no salaries for CEO Roger Penske and President Robert Kurnick during the coronavirus outbreak, postponed $150 million in capital expenditures and froze hiring among other cost-cutting measures.
The company said it has $1.3 billion in liquidity — $432 million in cash, $450 million available in credit lines and access to $450 million in real estate it could potentially finance.
Penske received an undisclosed amount from the federal government's Paycheck Protection Program but returned the money. That decision came before guidance was issued in late April that large companies would have to certify need for the funding. The new guidance suggested public companies would be unable to do so in "good faith."