Mike Jackson of AutoNation (AN) commented today on the GM (GM) closings announced.
ORT LAUDERDALE, Fla., May 15 /PRNewswire-FirstCall/ — AutoNation, Inc.
(NYSE: AN), American’s largest automotive retailer, today announced that
General Motors notified AutoNation that six of its dealerships were identified
for potential closing by GM. The notification is part of GM’s communication
today to approximately 1,100 dealers that GM does not expect to continue as GM
dealerships past October 2010. The AutoNation stores potentially impacted by
the consolidation plan represent 0% of AutoNation’s 2008 operating income.
AutoNation does not believe that any one-time charges that may be associated
with these actions will be material to its continuing operations or debt
covenants.Commenting on the consolidation plan, Mike Jackson, Chairman and Chief
Executive Officer, said, “We believe GM’s consolidation plan is a difficult but
positive step that will strengthen America’s dealer network and improve dealer
profitability over the long term. The consolidation plan is consistent with
AutoNation’s long-term strategy that we implemented in 2000 to consolidate
domestic dealerships and realign our brand mix more towards import and premium
luxury franchises. With our financial and operational strength and diversified
brand mix, we are well-positioned to succeed in the rapidly changing automotive
retail landscape.”
Have been saying for a while now this would be helpful for AutoNation (AN) in allowing for it to expedite its domestic reduction plans. What remains to be seen is what is happening around them. 1100 GE dealers closed by the end of 2010, mostly in metro areas leaves a lot of competition be be shuttered.
Will update as soon as I get word…
Disclosure (“none” means no position):Long AN