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Taking a 100-year-old dealer group to new heights — risks, challenges, and future vision
Featuring Liza Borches, President and CEO of Carter Myers Automotive
Welcome to another edition of expert insights from the Car Dealership Guy Podcast, an episode recap that breaks down the high-level takeaways from the conversation
Today, Liza Borches, President and CEO of Carter Myers Automotive, discusses the bold risks that have shaped her century-old dealership group, her innovative approach to empowering employees with partial ownership, her biggest wins, regrets, and much more. Carter Myers has been in business for a century as of this year. Over the last two decades, Liza has played an integral role in the company’s growth, helping it expand from three stores to 24.
1. How Liza joined the car business.
While her father owned a dealership during her childhood, Liza explains that it took her a while to consider the retail auto sector professionally. She recalls the stress that her family went through trying to navigate the car industry, noting that her parents often feared of losing the business. However, her father made sure to teach Liza everything he knew so she could avoid repeating his mistakes. She officially got her start after taking an offer from Honda upon meeting some executives from the company at the National Automobile Dealers Association convention. This would ultimately lead her to join her family’s company down the road.
2. The dangers of cross-collateralization.
One mistake Liza recalls her family making was cross-collateralization. Since all of the company’s locations were tied together, when one storefront failed, the bank could take inventory assets out of any dealership.
“Now, every time we go to acquire a new store, we make sure that the business is set up as its own corporation, that we have the proper working capital infused into the business, that it can get a floorplan line standing on its own, we have no personal guarantees, and that way if the business succeeds or fails, then it’s doing it on its own and it’s not touching our other businesses.”
3. Initial setbacks.
Carter Myers was a small organization for the first 60 years of its existence, serving Ford customers in Petersburg, VA.
“My grandfather was very financially conservative and kept it tight, kept it profitable all throughout WWII.”
However, her father was a risk taker, moving the company closer to the Richmond market and launching new ventures such as a rental car business. This led to new growth opportunities but also spread the company too thin.
“What he has shared with me since I was 12 years old was that he had the access to the financial capital to make it happen, but he didn’t have the human capital behind it.”
Eventually, the dealership group came under so much pressure that it was forced to reduce its holdings to three storefronts.
4. Learning from mistakes.
These troubles taught Liza and her father how to create and stick to strategic plans that account for finances, human capital, and market demand. This allowed it to grow without fear of spreading itself too thin.
“Back in 2009…we were able to say yes quicker to the right things because we said we’re going to look within a two-hour radius around Charlottesville. There were enough opportunities within a two-hour radius that I said we can grow in this space for at least five years.”
The next step was to implement a process that allowed general managers to have equity in their stores. This ensured the company’s leaders had skin in the game and incentivized them to assist the group in its growth efforts.
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5. The benefits of an ESOP.
Carter Myers Automotive has an Employee Stock Ownership Plan (ESOP). Liza explains that every associate is in the ESOP and receives a percentage of net profit, which is based 70% on the individual employee’s income and 20% on the years they have had a CMA. The ESOP is a great recruiting and retention tool.
“It’s a win for everyone. We have owners' meetings every April, where we announce our stock price, and every person in the company gets a copy of their stock certificate; we talk every year in that meeting about what it means to be a part of ESOP, re-explain it because it is a complicated thing for people to understand.
While employee enthusiasm is high during the first five years, Liza notes that the ESOP usually doesn’t convince workers to stay until they reach the 10-year mark, after which they typically begin to receive a substantial bonus thanks to their stock holdings. One employee joined the company at 18 as a technician and retired at age 59 as a fixed-ops director with $1.3 million in equity. Since the ESOP also applies to the entire dealership group rather than each individual store, it also encourages each location to cheer each other on and work together.
6. Strategic growth.
Liza held a 20% ownership stake in her first dealership, a small Volvo store that her father was in the process of acquiring when she decided to leave Honda. This brought the group’s store count to five. When the 2008 recession hit, Liza worked with her family to put together a strategic growth plan that led the company to acquire new storefronts once every other year. In 2021, the brand changed tactics, buying five stores by the end of the year and another three in 2022.
“That was a big shakeup for us…It increased the size of our company by about 35% and 40%, which we never had a jump like that all at one time.”
To prepare for the adjustment, the group has had to change its approach, putting district managers in place over separate markets and expanding its human capital. Every acquisition has also been organic, meaning the company has never purchased through a broker. Liza explains that this wasn’t really intentional. Rather, her family was able to negotiate deals for each store based on its network and strong relationships with other dealers.
7. Working with family.
In 2004, Liza notes that she and her husband returned to Charlottesville so she could take over her first dealership. The two sales associates employed by the original owner both resigned on the same day, leaving the storefront critically understaffed. Liza recalls relying on her husband to greet customers as she was the only person at the storefront. Her husband continued working for the dealership group for several years, although he was no longer employed full-time. Liza confesses that she unintentionally stressed her marriage by working so closely with her husband.
“Looking back, I know we could have done it better and done it differently…I’ve talked to a lot of people who’ve worked with their spouses. It works for some people and doesn’t work for others.”
8. Smart acquisitions.
Another mistake Liza admits too involved the purchase of a small store in Woodstock, Virginia.
“I bought it for the wrong reasons…I felt an obligation; there was a family who had been in the business for as long as we had, and they were having a really tough financial time, and they were gonna have to shut their doors. I think I bought it because I felt badly, but honestly, that market shouldn’t have had that store. It wasn’t a viable point, and we learned that pretty fast.”
Her main regret was that she put the team at the store through a difficult acquisition and only sold the store again soon after. Liza now makes sure to put more thought into each acquisition and purchase storefronts for the right reasons.
9. Centralized or localized?
Liza believes a balanced approach is key when it comes to managing a dealership group. Many dealers today believe that a centralized approach is necessary to succeed for bigger companies. While there are certain “non-negotiables” that Carter Myers Automotive requires of its general managers, including systems like DMS and CRM software and vendors, Liza adds that she also wants to raise entrepreneurs who can make effective decisions for their own market.
“We always look at it and say, ‘Does it impact the operational efficiency of the store if we have it scaled across all CMA, [and] what is the difference in the expense savings vs. the benefits of having it in-store?’”
This has resulted in a more localized approach while still allowing the company to mandate some centralized processes across the board. The support team doesn’t make decisions for general managers but does provide all the data that managers need to make their decisions. The team also gives general managers a list of vetted, pre-approved vendors, allowing them to identify the best choice for their store.
“We want the GMs to have flexibility, but we don’t want them to be spending all of their time out there negotiating contracts, having to learn new tools.”
10. Dealer advocacy and facility upgrades.
Liza believes that dealers need to build the facilities that customers in their markets want, and not necessarily what the manufacturer believes is necessary, a proposition she admits is difficult.
“I won’t name any names, but some of them are a lot more difficult to deal with than others…and so we are really pushing hard and pushing back on as many OEM requirements as we can, and more importantly, trying to be involved on dealer advisory boards to be having a dialogue on what the future of the facilities is going to look like.”
While her company has a great relationship with its franchise partners, Liza notes that manufacturers are talking out of two sides of their mouth, with one part of the team emphasizing fancy showrooms and the other half focusing on digital retail, mobile service, etc.
“Those two ideas at the OEM level just aren’t married yet…it’s our job as dealers to bring a different solution and show the OEMs a different way.”
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