Auto group shifts gears after ownership change

When Susan Pentoney learned she was getting new management, she was worried. With the news came the attendant anxieties: How will things change? What will my role be? Will I remain employed?

“I knew it was coming,” she said. “My initial thought was ‘gosh, I have to meet a new boss.’ ”

She had been at Dix Honda for two years. David Dix, her then boss, was retiring and looking to sell his State College car dealership, which had been in his family for decades. He had been courted by other dealers for years, but wanted to hew to the family values that had made the Dix name known in the community for more than half a century.

For Pentoney, it was a solid job. Because of her faith in her employer, her apprehension was somewhat leavened.

“I don’t necessarily like to change bosses, but I do trust Dave,” she said.

Her faith was rewarded. Before Dix agreed to sell the dealership to the Mechanicsburg-based Bobby Rahal Automotive Group in December, he made sure his former employees would retain their jobs under the incoming ownership.

“Everybody was offered an opportunity,” Pentoney said.

But the decision can be an atypical one for businesses. According to a 2008 Bureau of Labor Statistics study, across several sectors there is a decline in total employment after a change in ownership. Often, new owners may look to clean house and implement their own vision — from top to bottom — which can leave former employees looking for work elsewhere.

Yet for those who do stay, wages can spike after a takeover. Using a sample of 527 firms, a University of Nottingham study found that wages increased by 11 percent one year after an acquisition. Employment, however, dipped 23 percent after two years.

Despite the multiple offers, Dix chose the Bobby Rahal Group because he saw the same faith he had shown his employees, the same faith Pentoney saw in him.

Ken Gray, the general manager of the group’s Mechanicsburg dealership, helped smooth the transition for the former Dix Honda employees. He said the members of the Rahal organization had known Dix for more than 20 years, and had built their relationship through encounters during dealership meetings and conventions.

“We’ve had a longstanding relationship with Dave,” he said. “Ultimately when we talked to Dave and when it came time to make a decision, he felt that we would be two things: We would carry on the tradition he has in the community, and also he felt that we would be best for his team members.”

Of Dix’s 47 employees, 45 remained. The other two retired.

“When you have acquisitions of dealerships within the automotive industry, a lot of times those organizations come in and they do a lot of personnel changes,” said Brian Buehler, the dealership’s general manager. “We were not going to do that. We made it clear to Dave that we’re keeping everybody and we’re just going to get them different shirts, different computer systems, but essentially they’re going to be employed doing the same thing they were doing before.”

The sales bear that out. According to Gray, who visits the State College location on a weekly basis, the dealership sold 70 vehicles during August, a strong month for a dealer that size.

Pentoney has noticed the benefits. As with any change there were growing pains, she said, but they’ve since been replaced by some added efficiencies. A new computer system was implemented and some responsibilities were shifted from the sales team to the finance and management staff.

“We wanted to make sure that the sales team, which is basically the face of the car dealership, that they get to spend that time with the customers,” said Jen Marsh, the dealership’s finance manager.

Marsh, who came up from the Mechanicsburg dealership during the sale, has also had to shift gears. While Pentoney had been there for two years, several of her peers had been there for more than a decade. The group was tight-knit, a feeling perpetuated by Dix’s leadership style, Pentoney said, and the atmosphere he created.

As a newcomer, Marsh had to assimilate quickly — along with the ledger of new ideas and procedures.

“That was challenging for me coming up to this new family and saying ‘Can I join?’ ” she said, laughing. “I’m proud to see where it is now, where before we had some push-and-shove and people didn’t want to change, but now everybody has adapted.”

Since May, when the change became official, Bobby Rahal, the group’s owner, has also seen swift success. He’s made it a habit: The former Indy Car driver won three CART championships and the 1986 Indianapolis 500.

In July, his automotive group won the Honda President’s Award, which is given to the dealership that displays “exemplary customer service,” for the 17th time in 20 years.

“Maybe our way doing business is a little different, but we’ve seen them respond,” he said. “The sales have been much better. We look at this as a very long-term play for us and to get involved in the community.”

His son, Graham, has bought in, too. Literally — the State College dealership is the first in which he’s owned a stake.

Graham, 27, has followed in his father’s treads. On the weekend before visiting the State College dealership for the first time, he won the Firestone 600 at Texas Motor Speedway.

Racing careers, he said, are short, and so he’s looking at the next phase of his career.

“I’m a partner in this,” he said. “I’ve been pushing for a long time to my dad and everybody to let us get in. And obviously you’ve got to buy in like the rest of the partners and we were waiting for the opportunities to come. The opportunity came here and it’s perfect for me.”

Like Dix, Rahal Honda is a family business. For Graham, therein lies the success.

“Without a doubt,” he said. “We didn’t want to come in here and change the whole world, but just try to put our processes in place that they have down in Harrisburg that have worked well.”

The changes, minor or not, have impressed Pentoney. An updated inventory system dovetails with how customers shop for cars online — “so many people now, that’s their starting point” — and the revamped pricing structure has facilitated her job in sales.

“Honda doesn’t work on a very big markup,” she said. “But everybody wants to know what was the best price I could have gotten on that car. We have software that is constantly culling for those prices and what we do is present a price somewhere within that realm. … What we’re trying to do is give you that price that you’ve researched online up front, so we can focus more on the customer and their needs, rather than on the money end of it.

“It actually makes my job a lot easier.”

Her new bosses have also impressed her, which is no small feat. Following her former boss is not easy.

“I have to like and respect who I work for,” she said. “So I’m thankful. If Dave was going to do anything, this feels like what he wanted.”

This story was originally published September 8, 2016 at 12:04 AM with the headline "Auto group shifts gears after ownership change."