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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.”
Tuesday, July 01, 2014
BY HANNAH WALLACE | OB BLOGGER
Demand for organic food continues to soar: Last year, sales of organic food rose to $32.3 billion — up 10% from 2012. In Oregon, organic produce wholesaler Organically Grown Co. has been championing organic growing methods for four decades.
Friday, June 13, 2014
BY CLIFF HOCKLEY | OB GUEST BLOGGER
This article summarizes the key considerations a building owner must keep in mind when thinking about leasing to a medical marijuana dispensary.
Friday, July 18, 2014
BY JASON NORRIS | OB GUEST CONTRIBUTOR
Back in May, we shared a common Wall Street quote about investing, “Sell in May and go away.” Fast forward to July and the most common question we have been getting from clients is, “When is the market pullback going to occur?”
Thursday, June 12, 2014
BY ANDREA DURBIN | OB GUEST BLOGGER
Last week, the Obama administration took an important and welcomed step in the effort to protect the health and well-being of all Oregonians by limiting carbon pollution from existing power plants.
Thursday, May 29, 2014
BY JONATHAN FROCHTZWAJG
For Far West Fibers, one of Oregon's largest and oldest mixed-recycling companies, garbage alchemy has long been big business.
Monday, July 14, 2014
BY VIVIAN MCINERNY | OB BLOGGER
Some people think Amazon’s winking eye logo is starting to look like a hoodwink.
Thursday, May 29, 2014
BY KIM MOORE
A conversation about credit unions with the CEOs of Advantis Credit Union and OSU Federal Credit Union, followed by June's Powerlist.
|The Private 150: Bigger But Leaner|
|The Perfect Food|
|Powerlist: Staffing Firms|
|Taxis Uber Alles?|
|Boeing profit surges 52%|
|Apple: iPhone sales jump|
|Comcast profit rises 15%|
|American fast food chains snagged by food safety scandal in China|
|Washington volcanoes receive more scientific scrutiny|
|Edward Snowden: Racy photos often shared at NSA|
|Forbes Media to sell majority stake|
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