By NCDA
These are undoubtedly unprecedented times. What are you doing, as a small business, to weather the storm?
The first thing is to maintain a positive attitude. Leadership is more important now than ever. Ownership means that you can’t have a bad day — at least not a public one. You have to “coach up” and inspire your staff. We chose to overcommunicate. My partner Ron Fornaca and I work our business from the ground level; we walk the four corners to the lot. We know our people.
We also took this time to slow down, both in our personal lives and in our business life. There’s been a lot of turmoil, a lot of confusion and plain wrong information swirling since this thing started. To make the right decision, you have to take the time to sort things out, look at things from every level and be careful not to make a knee-jerk reaction. This pandemic will pass. We don’t know when, but the storm will pass. It always does. I think that’s one of the most reassuring things about having time in this business; we have the gift of perspective.
We’re a family business. My brother-in-law, Ron Fornaca and I each run a store in the business. Between us, we have five children in the business. In retail, we ran with a skeleton crew; mostly, it was family. We all logged a lot of hours.
Our fixed operations — parts and service — we deemed essential so that those departments could operate. Retail, of course, in the early days, not so much. We could handle customers with immediate needs. So, we spent our time focusing on more sanitation and ramping up our janitorial efforts. Those customers, and employees who still came into the dealerships, saw us wiping surfaces, cleaning, wearing masks and doing everything we could to keep us all safe. We received many compliments, which meant the world to us. I think it’s one thing to be open; it’s another to have your customers and employees feel safe enough to walk through your doors.
What are you doing to support your employees?
Well, at the start of this, Ron and I met, and we made a very conscious decision not to overreact. That’s not to say we weren’t concerned or didn’t take this seriously. We were concerned, and this virus was unlike anything we’ve encountered before. But we both felt that we needed to meet the times — unprecedented as they certainly were and still are — with competent and confident decisions.
Between us, we have 350 employees, each with three to four family members, so we had the lives of 1,400 people resting on our decisions. We knew we needed to do the right thing.
We did end up making an initial cut of about 22 people, but we did it after the first of April, so everyone had health insurance, at least through April.
Some of our staff were essential, and some of our sales staff, we paid to stay home. Our thought process was that if we believed that this would pass and we would rebound — which we did and do — we would need our people. So, we made the call to keep our employees, and at that time, our SBA loans weren’t approved. We made the decisions we made on faith that we could manage our way out much better with our workforce intact.
There was lots and lots of communication. We worked hard to keep the mystery out of it. Our employees were part of the conversation. They all had health insurance, and we encouraged all our employees to use our EAP if they needed it.
What are two things that you have learned from past experiences that are helping you navigate now?
Well, both Ron and I are old enough to remember the days of gas rationing, insanely high interest rates and the Great Recession. You learn not to panic and to take a step back. Get advice from trusted advisers so that you can make the best possible decision.
The best advice I ever got was that one day doesn’t make a week, and one week doesn’t make a month, and a month doesn’t make a year, and a year doesn’t make a lifetime. Be patient.
What effect do you think this crisis will have on the auto industry going forward?
In the short term, I think we will see a slow rebound. I don’t expect any normalcy before the end of the year. Inventory will be light because we’ve seen a substantial supply chain disruption. I think that used cars will make a rebound.
I think that people will tell you how they are comfortable buying a car. I think we’re going to see some people who will want to use the more conventional way — come into the showroom, look at the car, drive the car and have that point-of-sale experience. I think we’ll see more people be comfortable with doing the research online, buying the cars and having the vehicle delivered remotely. And there will be some in-between. The key is that we don’t come out of something like this without people having changed what they are comfortable with and what they are not. As dealers, we will need to become flexible in how we conduct business.
What is the takeaway for you as a small-business owner and leader from this extraordinary experience that will guide future business decisions?
What a learning experience this has been. First, there’s a lot to be said for hiring the right people. For us, the bar has been raised. We had some phenomenal employees who rose to the occasion like none other, and it was humbling to experience.
We learned that we can run leaner and still operate well. We’ve changed hours, we’ve worked more with appointments, and we’ve run our stores with more involvement from our management team. Our people are our biggest asset. People don’t care how much you know until they know how much you care.
What are you and your dealerships to reach out to the community or to support essential workers, including health care workers and first responders?
We have been doing a few things. Subaru always does a Subaru Share the Love Event. The most recent one was between Nov. 14, 2019, to Jan. 2, 2020, and we chose Rady Children’s Hospital as our Hometown Charity. We gave the Heart Institute there a check for $65,000.
This year was the fourth year we chose Rady Children’s Hospital, and during that time, we’ve raised more than $242,379 for the hospital. The hospital is a comprehensive pediatric care facility with 505 beds. In June 2019, U.S. News & World Report ranked it as one of the best children’s hospitals in the U.S.
Rady Children’s Hospital is the only one in the San Diego area to focus only on pediatric health care, and it is the region’s only pediatric trauma center.
We are offering health care workers and first responders one complimentary oil and filter change, along with a multipoint inspection and vehicle health check, until the end of 2020. This offer is valid on Toyota, Hyundai, Subaru, Kia and Lexus makes.
We also work with Miracle Babies, a nonprofit organization that helps families with critically ill babies by giving them diapers. Frank Motors gave Miracle Babies a $3,000 sponsorship to help pay for diaper distributions in South Bay. Also, several diaper drive-thru events have been scheduled throughout San Diego County. Frank Toyota agreed to sponsor June, Frank Subaru sponsored July, and Frank Hyundai sponsored August. Parents are asked to write “NICU NOW” on their dashboard. Diapers are loaded directly into the back of their cars, so there is no contact.
This story appears in Issue 3 2019-2020 of the San Diego Dealer Magazine.
