The last time I spoke with Sid DeBoer, his two key suppliers, GM and Chrysler, had recently declared bankruptcy and his company, Lithia Motors, was recovering from its worst year ever. But he had a plan to turn things around. A year and a half later, it seems to be working.
Lithia, the ninth largest auto retailer in the nation and Oregon’s sixth largest public company, sold 14 dealerships and lost $252 million amid the chaos of 2008. But it is back in the driver’s seat with a newly announced purchase of a Toyota dealership in Montana just two weeks after moving into the Bend market by buying Honda and Chevrolet franchises there. The company improved revenues from $444 million in the second quarter of 2009 to $534 in the second quarter of 2010 and has seen its stock price recover from $2 in April 2009 to $8.50 today.
Lithia was a huge success story prior to the recession, with plans to grow into an $11 billion company by 2011. Then the bottom fell out of the auto industry. When DeBoer and his team saw the recession coming, they acted swiftly, lightening the company's debt load from $269 million to $45 million and cutting 1,700 jobs. “It was painful,” DeBoer told me last year. “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. In retrospect, it has been a remarkable turn-around for a company that could have easily failed. DeBoer, who recently announced his personal plans to embrace the future by buying two all-electric vehicles for his wife and himself, saw what was coming and calculated how to get through it in the best possible shape.
The end result is that Lithia is once again snapping up promising businesses rather than shedding assets and cutting jobs. That is good news for the company and the economy.
Ben Jacklet is managing editor of Oregon Business.
Read Oregon Business' 2006 profile of Lithia Motors.