End of a car-selling era as AutoNation chief steps down

FORT LAUDERDALE — For decades, car dealerships were mostly family-owned local businesses with little hope of pushing back against manufacturers.

In his nearly two decades as the chief executive and chairman of Fort Lauderdale-based AutoNation, Mike Jackson is credited with changing that — and showing that a large, publicly traded company can make it in the business of selling cars.

On Wednesday, Jackson, 69, announced he would step down as chief executive next year, ending one of the longest leadership tenures among Fortune 500 executives.

Although AutoNation has run into headwinds as the auto market has softened after its 2016 peak, it is the country’s largest chain of car dealerships and the leading seller of brands including Ford, Chevrolet and Toyota.

‘‘He’s the pioneer,’’ said Wes Lutz, owner of a Chrysler Dodge Jeep franchise in Jackson, Michigan, and chairman of the National Automobile Dealers Association. ‘‘If it weren’t for Mike Jackson, Warren Buffett wouldn’t be in auto retail.’’

The AutoNation board has begun a search for a successor. Jackson, who will stay on as chairman, is abstaining from the process. The new chief executive will most likely take the helm in the first half of 2019.

Still 'fully engaged'

In an interview, Jackson said he remained ‘‘fully engaged’’ in the business.

‘‘I’m still running AutoNation as chairman, CEO and president, building the brand,’’ he said. ‘‘It is all-consuming.’’

Jackson grew up in New Jersey and studied political science. When his Mercedes SL broke down in Massachusetts on his honeymoon, he scrounged a job as a mechanic to pay for the repairs. He later joined a small chain of dealerships selling a variety of brands and worked his way up to become a partner. He then jumped to the U.S. operations of Mercedes-Benz, serving as its chief for four years.

In 1999, he was hired to fix AutoNation by its founder, H. Wayne Huizenga, the Florida billionaire who also started the Blockbuster video store chain and Waste Management Inc. At the time, AutoNation was struggling and many doubted that big dealership chains could compete against local dealers deeply rooted in their communities.

Jackson immediately closed 23 big used-car operations and laid off 1,800 people, then consolidated back-office operations to cut costs. Later, he scrapped the local names that the company’s outlets had been using and branded them all with AutoNation.

Today, AutoNation is a chain of 325 locations in the South and West. In addition to Ford, Chevrolet and Honda, AutoNation is the largest retailer of brands including Mercedes-Benz, BMW and Honda. In 2017, AutoNation franchises sold 329,000 new vehicles.

A bigger platform

Backed by AutoNation’s heft, Jackson emerged as a powerful voice able to challenge the carmakers in a way that smaller dealers could not.

At the 2007 North American International Auto Show in Detroit, he said, he got into a shouting match with Rick Wagoner, then chief executive of General Motors. Annoyed that GM was pressuring dealers to take more inventory than they could sell profitably, Jackson snapped, ‘‘You’re not going to stuff me like a Thanksgiving turkey!’’

A few years later, he announced that AutoNation would sell no used cars with unfixed recall issues, breaking from the industry’s standard practice at the time.

‘‘Mike Jackson is not afraid to call out the manufacturers when they should be called out,’’ said Mike Ramsey, an auto analyst at Gartner. ‘‘He’s so big, they can’t just say, ‘Sit down, Mike.’’’

As the auto industry bounced back from the recession, AutoNation saw its own fortunes rise. In July 2015, it was trading at more than $65 a share. Its shares tumbled at the start of 2016, however, and have lagged its peers since. Shares closed Tuesday at $43, having lost a third of their value from a peak of $62 that ended a brief surge in January. They were trading for $43.79 late Wednesday morning.

'Staggering, shocking losses'

During the industry’s deep recession, Jackson formed a friendship with Sergio Marchionne, the chief executive who led Fiat’s acquisition of Chrysler out of bankruptcy. The two shared private dinners during the Detroit auto show, and Marchionne hosted Jackson at Formula One races in Monte Carlo.

‘‘Sergio would take us through the garages, and he was just in his element,’’ Jackson said.

Marchionne’s death in July, after complications from shoulder surgery, was an emotional blow, Jackson said. It came four months after Huizenga died of cancer.

Jackson called them ‘‘staggering, shocking losses,’’ and noted Marchionne was scheduled to retire himself in 2019.

Although Jackson said he had not specific plans for retirement, he said he would remain active in AutoNation’s ‘‘Drive Pink’’ breast cancer research campaign, to which the company has donated $15 million since 2014 and promotes with the pink license plate frames that franchises affix to every new vehicle they sell.

After 20 years running AutoNation, he said, ‘‘it’s time for a new chapter.’’