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|Wednesday, June 24, 2009|
Lithia went public in 1996 and grew from five stores to more than 90 over one freewheeling decade. CEO Sid DeBoer had hoped to build the company into an $11 billion empire by 2011, but that was before his key suppliers, Chrysler and GM, fizzled into bankruptcy. Lithia struggled mightily in 2008, losing $252 million for the year.
But then a surprising thing happened in the first quarter of 2009: Lithia posted a profit. Its stock, which bottomed out at $2 per share in April, rebounded powerfully on news that Chrysler’s abrupt elimination of 789 underperforming stores would help rather than hurt Lithia. “We lost two stores, but we should be able to pick up nine additional franchises in five of our current locations,” says DeBoer.
Three Lithia stores are also at risk from the GM bankruptcy, but it could have been much worse. Lithia minimized its losses by deciding in the fourth quarter of 2007 to begin conserving cash and selling off unnecessary assets. The company sold 14 dealerships in 2008 and has lightened its debt load from $269 million to $45 million while slashing its workforce from about 6,000 to 4,300. “It was painful,” says DeBoer. “A lot of people lost their jobs and we lost some stores that we would like to have kept in good times.”
But it worked. According to DeBoer, sales in May exceeded Lithia’s projections. “All the stores we’ve sold or closed were losing money,” he says. “We will make more money without them.”
It won’t be a Sunday drive. Lithia still has 11 dealerships on the market as of press time, and gas prices are rising again. But DeBoer says he feels much better about Lithia’s position than he did a year ago, and he’s thankful he called for the radical shift in strategy sooner rather than later.
“Having lived in the car business since 1964,” he says, “I’ve learned that those who act the fastest get through these things in the best shape.”
|Thursday, January 23, 2014|
A conversation about MBAs with B-school deans from Marylhurst University and Oregon State University and a list of the top MBA programs in Oregon.
|Thursday, February 13, 2014|
BY JASON NORRIS | GUEST CONTRIBUTOR
Investor returns in January usually predict what the returns will be for the entire year. The Seahawks win may offset this calendar trend.
|Thursday, January 30, 2014|
BY LINDA BAKER | OB EDITOR
A conversation with Travel Oregon CEO Todd Davidson.
|Friday, February 07, 2014|
BY TOM COX | OB BLOGGER
President Obama's State of the Union address held lessons for all leaders.
|Thursday, January 23, 2014|
BY ERIC FRUITS | OB BLOGGER
Oregon’s minimum wage workers rang in the New Year with a raise. At $9.10 an hour, the state now has the second highest minimum wage in the country.
|Tuesday, February 25, 2014|
BY JOE ROJAS-BURKE | OB BLOGGER
The medical research enterprise wastes tens of billions of dollars a year on irrelevant studies. It’s time to fix it.
|Tuesday, January 21, 2014|
BY LINDA BAKER
Although millions of people take anti-depressants, scientists know astonishingly little about how these therapies actually work.
|The more they change, the more they stay the same|
|The 2014 List: The Top 33 Large Companies to Work, For in Oregon|
|The 2014 List: The Top 34 Medium Companies to Work, For in Oregon|
|The 2014 List: The Top 33 Small Companies to Work, For in Oregon|
|The future of money|
|Rival banana firms to merge|
|Blood test predicts Alzheimer's disease|
|Cerberus Capital to buy Safeway|
|U.S. adds 175,000 jobs|
|Bitcoin creator revealed|
|Staples closing 225 stores|
|EU to offer aid package to Ukraine|
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