Closure of Holman Store, Dealership Turnover Drops, Elon Sinks in @Twitter

October 27, 2022
This Thursday is full of fire as we talk about the sudden closure of Holman Lincoln Ford in Pompano Beach that is sending a shockwave through the industry. We also cover the sizable drop in employee turnover at Dealerships in 2021, as well as the viral video of Elon Musk marching into Twitter HQ.
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Holman Ford Lincoln in Pompano Beach closes permanently

  • There is no mention of the closure on their site and the location no longer appears on holmanauto.com
  • Their Google Business listing for the service center was also marked ‘permanently closed’ yesterday which also appears to have reverted to an open status
  • Sources close to the group note that the decision was not made on the basis of relationship with the Ford/Lincoln brand

According to the NADA Annual Dealership Workforce study, turnover in US dealerships saw a substantial drop in employee turnover as it dropped to its lowest level since the study was first introduced in 2011

  • “Average industry turnover was 34 percent in 2021 — the lowest level in the 11-year history of the National Automobile Dealers Association's annual Dealership Workforce Study.”
  • The key potential differentiator is that earnings were up 27% in 2021
  • Average dealership employees rose to 74, which is still below pre-pandemic numbers, contributing to both efficiency and higher earnings per employee

A tweet by Elon Musk shows him marching into Twitter HQ carrying a sink with the caption being “Entering Twitter HQ - let that sink in!”

  • His profile which currently has 110.2M followers also appears to have a changed profile description that now reads “Chief twit”
  • By law, the $44B deal has a Friday deadline to close

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SPEAKERS

Kyle Mountsier, Paul Daly


Kyle Mountsier  00:21

Good morning. It is Thursday, October 27. We're not in front of a Tesla store. We're sitting in our seats. Closures all over the place. dealership turnover is dropping, and Elon is really letting it sink in.


Paul Daly  00:37

Yeah, yeah, yes. Oh, then


Kyle Mountsier  00:41

we're probably not going to surprise many people with the third story today, just because I feel like it's all over the internet. But you know,


Paul Daly  00:49

maybe surprise if you deal with it last night. So I mean, like that I thought would have seen it or have known. So I don't know, maybe maybe we were both on the ground yesterday in Atlanta. And it's always interesting to get back home like I'm in I'm in my son's gaming Dojo right now, I wish to see what's in front of me, he's got like a custom built computer. But, you know, we got in late last night, from being on the ground with a bunch of dealers. And you know, we left that event last night, just, you know, at the end of any event, like it's still going on today, but we left yesterday, and when you leave is when, like everything that everyone wanted to say like, I gotta make sure I say this. I'm telling you what the last 15 minutes.


Kyle Mountsier  01:28

Right, everybody was grabbing us down,


Paul Daly  01:30

it was so great to just connect with dealers from across the country, and just get get just like a real time real world feel for just, again, the passion and energy that dealers have the optimism going into 2023 and the confidence of the operators who know they're paying attention, because they know they're heading into 2023 in there, like, I don't know how everybody else is feeling but we're gonna eat some lunch, their lunch if they don't watch it.


Kyle Mountsier  01:53

Yeah, you know, one of the theme of kind of the event and this it's glenlyn, these 800% elite automotive club, the theme was kind of technology. And it never, it always turns this way where it's like technology. But and I think that that was kind of the theme. And so just an encouragement for anyone that's thinking about, especially as you know, like we're three months away from nada. And I know, there's always this kind of energy in automotive. That's, let's wait and see. For an IDA. I might be looking at new technologies, there's a lot of things that get announced around this time. And so taking a measured approach, knowing that technology is not going to solve all your problems in 2023 that is going to be the setup of the people and the processes, dialing in those things first, that are going to make you impactful not just next year, but long into the future because technology is always going to change. You know, the way that we approach the market is always going to change.


Paul Daly  02:47

The market is gonna change. Yeah, the market is going to change the game is going to change. It's always changing. Speaking of the game changing All right, we were sent a text message yesterday with a screen about a closure home and Ford Lincoln in Pompano Beach has closed permanently or will be closing probate will be at the end of the month. So there's just a few days left. So Monday would be the 31st. So I guess 31st Here is what was on the site and it still is if you go to the website it says in partnership with the Lincoln and Ford Motor Company, Holman automotive has made the difficult decision to cease operations at pompano Ford Lincoln at the end of October 2022. Our goal is to support our loyal customer base during this time and assist with the transition to our fellow dealers in the market. We thank you for your support over the last get this 48 years. And it's been a pleasure serving you. Please contact us with questions regarding customer.


Kyle Mountsier  03:42

This is not a tiny story either. No, by any stretch of the imagination. I mean, they've got 100 New, almost 100 new cars in stock on a regular basis. And I don't know, you know how Holman kind of shares inventory or anything like that. But they at least have about 500 pre owned vehicles listed on their website currently today. So you know, like I said, I don't know how many home in stores are closed because I know they have stores kind of all over


Paul Daly  04:07

Yeah, they actually have some near Philly a bunch in turn. Right? Exactly. Oh, they're all


Kyle Mountsier  04:10

up and down the East Coast. So you know, so I don't know how that is but like you think about 48 years of customers and service customers and I know you know I loosely know the homeland group just from like some some internet interactions and things like that. But it's a I'm telling you what that is a like that is a historic thing that people like stay attached to and stay sticky to and service and buy their cars from. Oh yeah, we're like not to leave 1000s of marketers wild 100 We


Paul Daly  04:42

don't really we really don't know what happened. There's no mention of why it's closed their Google My Business listing for the service center was marked permanently closed yesterday. Today it is no longer marked permanent and close the hours are backup. So I don't know if something just got ahead of itself. But there's a lot of speculation like we made a post on link Get about this, by the way, if you're not following us, so do on LinkedIn, we put down a really great drip every day. And great conversation happens as posts, you know, has 5000 people to about that have looked at it lots of comments from dealers that you would know just kind of like asking and well wishing or trying to figure out some people a little bit like nervous, right, what the heck is going on? We don't know what's going on. And you know, we don't want to make a big deal over something. It's not a big deal. But with all the talk, and all the things coming out of Ford, you know, as far as shifting this dealer model closing stores, and we're pretty sure it wasn't like close, it seems like it's a very amicable thing. You know, we're just trying to find out so if, you know, hit us up, let us know, we've talked to other notable Ford dealers that were kind of surprised to hear about it. They're like, I don't know, if it's a real estate thing. You know, obviously, yeah, we are shifting and pivoting


Kyle Mountsier  05:49

to, unfortunately, keep unnamed, but that that knows the group closely that said, Hey, I am confident that it's not a Ford Lincoln relationship thing with, you know, like agency model, or an or anything like Ford coming in and telling them to shut down. So there's obviously something else going on, but you just think about the customers that are impacted the employees that are impacted. And, and, you know,


Paul Daly  06:13

I mean, it could be a volunteer, it could, hypothetically be a voluntary closure, right, saying, hey, we'll buy out your point. Right? So it's not, yeah, like, no one violated anything, but it definitely could be part of that plan to like, hey, let's start to, you know, contract the overall points and like, figure out what's going on. So that's just news. Like, we didn't see it anywhere else. We got sent a text message, but let's get this out there. If you know something, or you can add something to the conversation, you know, because what happens when there's a vacuum, right, and there's not enough information? That's when speculation is gonna go crazy. Right? We don't want speculation do not want speculation. We do want to know what's going on. Yeah. When a


Kyle Mountsier  06:50

dealership like that with a large group that is consistent, that is consistently growing, acquiring open points, acquiring stores. Short 48 a 48 year story of a Ford dealership is a healthy market. Right. Just kind of a shocking, you know, and I think, you know, at this point, I guess nothing is shocking over the last two years. But you hate to see you hate to see good dealerships go?


Paul Daly  07:14

I think, yeah, I do think one thing that is indicative of that we can all walk away with is that things are changing. Right? Yes. Whether it's for the better for the worse. Everyone's got their opinion on that things are changing. And you know, I think once you realize like, things really are changing. There's like this initial kind of gut check that happens when you're like, Okay, let's just, let's go into the change.


Kyle Mountsier  07:37

Well, hey, Paul, speaking of changing, but a little bit less.


Paul Daly  07:41

Yeah. Good way. Changing lesson a good way,


Kyle Mountsier  07:45

changing lesson a good way. So the NADA annual dealership workforce study surveyed over 1900 dealerships across the country and saw a substantial drop in total employee turnover. The average for the industry was 34%. The lowest and it's 11 year history of this study coming out, which was way down from 2019 are really 20. The last four years prior was 45 46%, which is kind of the thing that we've been struggling with as an industry. And they saw a direct relationship between employee compensation and employee turnover, noting that actually, the average dealership employee now this is spread across all employees, it now has an average earning, which is up 27%, last year of over $100,000. So the average dealership employee now makes over $100,000, again, that spread out, we know that some people are making more making less. While Interestingly enough, the average number of employees per dealership is still not up to the 29 still downs. Yep, show. So it's up over 2020, but only about three as an average, which is still down, still down three or four from from pre pandemic levels.


Paul Daly  09:04

There are a few things about this that I think are worth mentioning. Number one, I don't think that the correlation, just people are making more so they're staying, right. I mean, I feel like that's a pretty groundball correlation, right? Like, oh, they're making more, that's why they're staying. I think there are a lot of other reasons why people are staying. And a big part of that is the fact that people have to like sell less. Right? Yeah, this is the price of the car, right? You're not You're not hustling, you're not stressing over demand, we have all this excess inventory, people are coming and looking for the car, you're able to pair them with a car, they're excited to have it that takes all kinds of pressure out of the sales process. And salespeople traditionally have the highest level of turnover. It's a high stress position. Right. And so I think that that contributes significantly. I think it's also worth mentioning that the median, the median, so that's the, if you put everybody together, it's if you have like say 100, right, the median is the dead center number. So it'd be like 50 or 51. That's the median. And the median salary is actually lower than the average salary. Interesting, meaning that there's a lot of money going into the top end of the salary to balance out all the other ones that are below the average salary. So I think I think there still probably is like this increased level of compensation when you average it out. But I still think that like, I think I'm saying all that to say I think the situations in the store are getting better not.


Kyle Mountsier  10:33

I was I was just thinking, like, think about the last seven to 10 years in the hockey stick growth of HR and culture conversations in automotive goodness. Yeah. Yeah. And so you pair that with higher earnings, and an easier conversation or pressure, lower pressure, and it continued effort at the leadership level to drive culture and HR related conversations into the dealership ecosystem. Yes, you start to kind of have this marriage of Oh, wow, we,


Paul Daly  11:04

we couldn't do improvement. Right. Yeah, I love that. You just brought that up. Because without a doubt, the last several years, the HR and culture situation and deal with the conversation, we'll just talk about the conversation. It's just no one's people are looking there. And their focus there, and there's content about it, and there's people paying attention, it is going to improve, right? And what gets measured gets improved. I think what gets focus gets improved as well. And it's exciting for me, because turnover in our industry specifically is has historically been really bad. And it's good to see it moving in the direction that we feel like it should move in because we know how great it is to work at so many dealerships across the country.


Kyle Mountsier  11:41

Well, speaking of moving in interesting directions.


Paul Daly  11:47

This is so classic. Oh my goodness. A tweet by Elon Musk shows him marching out called marching into Twitter HQ,


Kyle Mountsier  11:55

strutting, that strutting it's kind of an


Paul Daly  11:58

awkward strike because he is carrying a full size sink, literally a sink with a caption being entering Twitter HQ, hyphen, let it sink in with but no, it's not a dumb grin. It's like 12 year old, like just got the cool thing. And he that it's I literally freeze framed it on like what, like you see him turn around, and he's got the smile on. It's straight up 12 year old grid. I couldn't get enough of it. I was just like, what an era we live in. Right? Here comes the gearing a sink into Twitter, here comes like who's somewhat argue is a car guy, right? It's kind of a car guy way to stretch. I mean, he is a


Kyle Mountsier  12:41

very proud car guy has kind of like this, like, you know, very, very deep rooted like I'm gonna make. Yeah, it's a pretty car guy. But I'm gonna say, well, it's all it's all around the idea that he or not the idea but the fact that Tomorrow is the deadline to complete this massive deal of the public buyout taking it private sector so that it's fully owned. At what is it $54 A share right now the share price is just right around, it's hovering around 53 shot up about $10 price per share. Right when the like, early in October when the when it was like oh, no, it has to happen. So, you know, I think the really fun part is that his profile description now reads, Chief twit,


Paul Daly  13:28

you got 110 million followers. The deal is a $44 billion deal against at the close on Monday, I guess. Or Friday. Now I said because on Friday, you said? Yeah. So we'll see what happened. A couple of the tweets that came out from that account yesterday. He said meeting a lot of cool people at Twitter today, which is awesome. I guess those cool people are the 25% that he's probably going to keep because he did announce he's probably going to come to work horseback by 75%, which is probably going to be kind of good for everybody there because the probably 75% of the people at Twitter might not be that happy about him buying the company to begin with. Also, also such a weird thing to buy a company where you know, a lot of the people they're just absolutely hate, hate you right. He also tweeted out a beautiful thing about Twitter is how it empowers citizen journalism. People are able to dis disseminate news without an establishment bias. So we'll see where that all plays out. I mean, they don't realize this world is different. We were talking about change. Here you have an Eevee automotive founder who also figured out solar panels and Giga factories who also is sending things into space Starlink internet service at 800 megabytes a second went through the air right? Or driving in one of those crazy camper vans shout out to Andrew differ. And he now owns Twitter because he wants to preserve free speech. So welcome to 2022


Kyle Mountsier  14:58

What's new what's coming in November, everybody here we go. Yeah. What a deal. I mean, I'm telling you what there is like, I am convinced that trying things experimenting diving in and doing things differently than you've ever done them and trying to like someone said yesterday break I think it was Dan Moore he was like break everything that's working. Yeah. You want to be successful I'm that's where the opportunity to do that is extremely rich. Well, I'll tell you what, we've had a whole bunch of fun today. I don't really know what to say about Twitter. If you know anything about Holman let us know. But otherwise, get in there, dig, drive culture and love your teams.