Shares of AutoNation (AN) are climbing in morning trading after the company said its long-time chief executive officer will step down from his role in 2019 to become the company’s executive chairman. AutoNation is also undertaking a search to find its next CEO.
LONG-TIME CEO MIKE JACKSON TO STEP DOWN IN 2019: AutoNation’s CEO Mike Jackson will step down from the role next year after nearly 20 years running the chain of auto dealerships but remain executive chairman until 2021, the company said in a statement on Wednesday. AutoNation’s board has hired executive search firm Spencer Stuart to find a successor, and will consider both internal and external candidates, it said. “AutoNation is the retail automotive industry leader. The company is ready for its next chapter with a strong foundation, a coast to coast brand, a comprehensive Brand Extension strategy, and a transformational digital consumer car buying experience,” Jackson said. In an interview with The New York Times, Jackson said he remains “fully engaged” in the business, adding that “I’m still running AutoNation as chairman, CEO, and president, building the brand. It is all-consuming.”
WHAT’S NOTABLE: Under Jackson’s guidance, the organization became the largest automotive retailer in the U.S. using a more customer-focused, transparent and contemporary business model. The company has sold over 11M vehicles, serviced over 40M customer vehicles, it added. Jackson was also an advocate for the auto industry during the financial crisis, when large U.S. automakers like General Motors (GM) and Ford (F) were struggling, telling The Wall Street Journal that he feels it is his duty to speak out on behalf of consumers and dealers who otherwise would not have a voice in the auto industry.
ANALYST COMMENTARY: Gordon Haskett’s Event-Driven researcher Don Bilson noted that Berkshire Hathaway’s (BRK-A) Warren Buffett previously stated with his purchase of Van Tuyl Group that “this is the beginning of a journey that will have no end.” While Berkshire buying AutoNation would “certainly obviate the need for Jackson to continue on with his search” for a successor, Bilson said AutoNation “doesn’t profile as a very good sale candidate” and “this doesn’t set up as a situation where Jackson might sell the company as part of his exit.”
