Jeff Carlson applied lessons of earlier crises

Jeff Carlson, president of Glenwood Springs Ford and Glenwood Springs Subaru in Colorado, said the financial downturn of 2008 was "brutal in terms of expense reduction.""For the people who got to stay, I think it was relief that they were able to survive," said Carlson, who also was the 2016 chairman of the National Automobile Dealers Association.He survived, in part, by cutting stores, people and vendors.Just before the recession, Carlson was president of Glenwood Springs Ford, Glenwood Springs Chrysler-Dodge, Castle Peak Automotive Center in Gypsum, Colo.,and Summit Ford in Silver- thorne, Colo.Carlson decided to close his Chrysler-Dodge dealership in November 2008. Though he had built a new facility for it only a year earlier, he was facing difficulties with his lender. Carlson kept the building and leased it to another dealer — one of the first steps in his multipronged business strategy that helped sustain his remaining operations."I didn't have a huge amount of money tied up in that franchise, so to lose money operating didn't make any sense," Carlson said. "If I couldn't sell it, closing it was going to be much better ... than continuing to operate it with the pending losses."As the recession deepened, Carlson paid off his Glenwood Springs Ford facility with money made from selling the Castle Peak store and real estate. The Summit Ford dealership was financed with another lender.These sales ultimately kept Carlson's operations afloat.Jeff CarlsonTitle then: President, Glenwood Springs Ford, Glenwood Springs Chrysler-Dodge, Castle Peak Automotive Center and Summit FordWhere: Glenwood Springs, Colo., Gypsum, Colo., and Silverthorne, Colo.Survival strategy: Sold 1 store to pay off a more successful store; capitalized on excess service business after other area dealerships closed"That business flowed to the other two stores to keep them viable," Carlson said. Castle Peak was cut loose "so that the other two stores would maintain volumes that allowed us to operate."As other dealerships in the area closed — including stores with Chrysler, Dodge, Jeep, Ram, Chevrolet, Honda and Volvo franchises — Carlson was able to pick up extra service business from orphaned vehicle owners.Carlson saw this part of business flip within three years from the start of the recession. Initially, his parts and service business skyrocketed while vehicle sales tumbled. Later, sales recovered, but there weren't as many vehicles in operation to come in for service. This balancing act between sales and fixed operations remained for several years following the downturn. Carlson, like many of his peers, also renegotiated and rebid his contracts with vendors to ensure his business stayed afloat. He continues this practice even now, re-evaluating vendor contracts every 18 months.

Jeff Carlson applied lessons of earlier crises

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