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|Archives - July 2009|
|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.”
Friday, January 23, 2015
BY LINDA BAKER | OB EDITOR
The Northwest Environmental Business Council previews the 2015 legislative agenda as Hatch Oregon celebrates Oregon's new community crowdfunding rules.
Wednesday, February 25, 2015
BY JASON NORRIS, CFA | OB GUEST BLOGGER
Pets.com, GeoCities, eToys, and WorldCom … blasts-from-the-past that all signify the late 1990s Internet bubble. Yet we believe the dynamics of the market, specifically in technology stocks, are much different today than it was during the late 1990s.
Thursday, January 08, 2015
BY CAMBIA HEALTH SOLUTIONS & OREGON BUSINESS COUNCIL | OP-ED
Businesses have a significant stake in the health of Oregonians. In fact, we cannot succeed without it. By committing to using our companies as levers for good health, we invest in our people, our business, our quality of life and our economy.
Wednesday, January 14, 2015
BY NISHANT BHAJARIA | OP-ED CONTRIBUTOR
Startups in the growth phase are associated with a fresh infusion of capital — human and financial — a curiosity factor and products to disrupt the market and drive demand. Portland’s economy gives off the same aroma.
Tuesday, January 27, 2015
Power Lunch at the Imperial.
Friday, February 20, 2015
BY AMY MILSHTEIN | OB CONTRIBUTOR
Don’t just sit there. For a healthy workplace, move up and down — and all around.
Wednesday, February 25, 2015
BY LINDA BAKER | OB EDITOR
The big news at Oregon Business is we’re getting a ping pong table. After reading the descriptions of the 2015 100 Best Companies to Work For in Oregon, a disproportionate number of which feature table tennis in the office, I decided it was time to bring our own workplace into the 21st century. It was a tough call, but it’s lonely at the top, and someone has to make the hard decisions.
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