One on One with AutoNation CEO Mike Jackson

The largest auto dealer's CEO on streamlining retail operations, the challenges facing U.S. brands and the need for greater fuel economy

by Marty Bernstein

The day-to-day complexities of running a business that in 2006 generated a little shy of $19 billion dollars in sales from 257 dealerships selling 37 different brands in 5 states across the Sunbelt regions of the United States alone are simply staggering. On top of the everyday issues one would expect to encounter in the running of such an enormous retailer, add the decisions regarding corporate policies, planning, and programming—decisions that impact every area of the business and the company's 26,000 employees.

If you can imagine all that, you have an idea of what Mike Jackson's life is like. While his name is similar to the King of Pop, his long-list of accomplishments in the auto retail industry label him as a true King of Cars. Mike Jackson, the ebullient 58-year-old chairman and chief executive officer of AutoNation, has done more to change the shape of automotive retailing in America than any other. Getting time with Mike is not an easy feat, but I was able to meet with him a few weeks ago at AutoNation's corporate headquarters in downtown Fort Lauderdale, Florida.

MB: Mike, what was your first car?
MJ: It was a 1959, Mercedes 190 SL with red interior and a silver top. My first car is the reason I'm in this business today.

MB: Please explain…
MJ: I was engaged and was going to get married upon graduation from college. My wife actually picked out the car. I had no idea what a Mercedes was and this was an old used SL that she thought was charming. So, we bought it for $1,500. We went to Cape Cod on our honeymoon and after 4 weeks we were broke and the car was broke. I went to the local Mercedes dealership and got a job in the service department—sweeping the floor, changing oil, whatever—and get the technicians to fix my car for me on the cheap. Which they did. And I fell in love with Mercedes and fell in love with the business. I never went to law school, just stayed in this business. It all goes back to that first car.

On Management Style

MB: Congratulations on being named the top automotive retailer in America by Fortune magazine.
MJ: It's a fascinating business that's endlessly challenging. AutoNation has received this prestigious award 5 out of the last 6 years.

MB: Did you go out to get that reward? Or did in just happen through your good business management style?
MJ: We never set out to actually get the award. We don't have a deliberate strategy, a deliberate campaign or focus group or any of that. Our philosophy is 'run the business the right way for the long term' take super care of your customers and good things will happen. But we are very proud to be at the absolute pinnacle of five out of the last six years. It's quite something.

MB: Can you tell me about your transition to retailing from manufacturing at Mercedes-Benz? How difficult was it?
MJ: (laughing) Which time? I've gone back and forth several times and that's unusual in this business. I started in dealerships and then I went to work for Mercedes on the technical side of the business, eventually figuring out I was with an engineering company with a degree in political science and this was a problem. So, I moved over to the marketing and sales side of the company. But then I went back to dealerships for ten years and then back to Mercedes. And now I'm back to retail.

MB: How did your retail background help?
MJ: Somehow it uniquely qualified or prepared me for the challenges of AutoNation. In that spending so much time at retail, I can really relate and really understand what it takes to fix cars one at a time and to care for customers one at a time. There is no way around that. There is an immediate need within dealerships—you must meet customers' needs. If you ever lose sight of that you're going to have a problem.