Fortune Staff

This year’s Fortune 500 marks the 68th running of the list.

Fortune 500

The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

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Headquartered in Fort Lauderdale, Fla., the auto retailer has more than 300 locations in 18 states. It sells both used and new vehicles and provides automative repair services. Profits were up nearly 14% in 2019 despite a slight pullback in revenues.

AutoNation, Inc. (AN) Company Profile, News, Rankings | Fortune

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AutoNation

autonation

New CEO Mike Manley says supplies will get better by end of 2022 and used car market is still hot.

AutoNation CEO: "Every one of our brands has more demand than supply"

Leadership

AutoNation CEO: "Our brands has more demand than supply"

mike, so nice to meet you and thank you for joining us, you became ceo of autonation only four months ago and it looks like things are going your way, you recently reported record sales and earnings. What's the story behind those big numbers? Well, firstly the story is a great team, you know, when you come into an organization and you're able to deliver those results in your first quarter, as you can imagine, it's how the team has pulled together, which is fantastic. And we came into the fourth quarter with some phenomenal momentum. Um, I think we made the most of the market and we made the most of all of the assets that we have. Well, do you see this momentum continuing well, you know, one of the things that unfortunately everybody has struggled with is being accurate in terms of the forecast of our supply chains from the O E M s, because as you know, still very much in the chip shortage for new vehicle production and what that's doing is creating a shortfall in terms of inventory levels on the dealership floor, which in turn has a knock on effect to use vehicles, So difficult to forecast the full year. What we think will happen is that supply will get better at the end of the second and into the third quarter, hopefully continuing to strengthen all the way through the fourth quarter, but you know, when we get covid cases in different parts of the world and we get additional shutdowns as a result of that, it's still very difficult to get an accurate forecast, but I think generally that's what people are expecting for this year, from your perspective, from what you can tell of what's going on in the marketplace, which brands are doing well and which ones are feeling the pinch. What I would say is that if you look at our inventory levels across all of our brands, every one of them now has more demand than supply at this moment in time because it's driving inventory levels down. But what's happened really is particularly the end of last year, which is relatively seasonal, is there's a focus on premium luxury brands and that's pretty normal for the end of the year. And I think most of the manufacturers obviously Prioritized their premium and luxury brands in their portfolio to make sure that they got the chips. And now traditionally as we get into spring it moves on to more of the utility vehicles, including pickups. Tell us about the used car market, your sales jumped 55% in the latest quarter. I mean, that's just huge. Uh, is this a long term trend or is this just a short term fix? Because people can't get the new cars that they want. You know, I think there's two things that drove that phenomenal increase in revenue, firstly, we have, as you know, seen used car prices increased basically all throughout the year. So we've seen price appreciation in used vehicles in a similar fashion as we've seen in new vehicles And our volume increased by 21% in the fourth quarter. So the combination of the price increases Plus the volume increase gave us that 55% jump. Now for us, there's not a flash in the pan, it really is a result of some really hard work to improve new and used ratios within our franchise business. But we've also been investing heavily in our alternation, us a platform which is dedicated used car businesses and we launched two additional alternation usa stores in the fourth quarter and very pleased to say they outperformed our expectations. So really, it was a combination of those things and it's a big focus for us as we come into this year to keep that moving forward, Let's talk a little bit about E V. S, it looks like consumers are really getting serious about owning an electric vehicle. How would you describe the pace of DVD sales? Well, obviously they've picked up fairly significantly over the last few years, but from a very low base, frankly, but what we are seeing is really a lot of early adopters, particularly in the high mid end in the premium segment coming into the marketplace. Now that's going to be followed next year by a significant number of additional launchers. So I'm expecting yet again, another big increase in 2022 who's winning the race mike. Well, you know, Tesla have a big head start in the, in the business. But if you look, for example at the premium brands with Mercedes and the launch of their EQ, you obviously have Porsche out there with Tyco and you have Audi out there as well. He under under this new vehicle is doing incredibly well and it's not just the vehicles that are in the marketplace, it's also the announcements that we've seen obviously forward with their Lightning have received significant numbers of pre orders. So I think what we're seeing is if it's a well known name plate, like the maquis, for example from Mustang or the Lightning F 1 50 or the tycoon from Porsche, all of those, all of those vehicles and brands are doing well, whether it's in the market today or it's just released for consumer orders. You mentioned Tesla, I mean, certainly it is a dominant force in the E. V market, not just because of its tech innovations, but also it's been a powerful force in the way people buy their cars. I mean, they are bypassing dealerships and they're going directly to the consumer. To what extent is this influencing the future of dealerships? Do you have to have some kind of paradigm shift at autonation? I'll agree with half of what you said. I mean, what they're actually doing is they have facilitated an online purchase that quite often also includes a visit to a dealership, the dealership just happens to be on my Tesla. So when you stand back really, what we need to make sure is that we provide the customers the best buy an experience that suits multiple generations and that for some is completely online fulfilled through e commerce with fulfillment at their place of home or their office, some is through the dealership. So regardless of the structure that's in place, what's really important is to provide those different types of portals, there's different types of access so that they can purchase a vehicle their way. And I think that's the important message. Well, what does that mean for the dealership world? Because as consumers do get comfortable doing an online purchase, uh, and having so many other choices. How does this put pressure on the traditional dealership network? I don't think it does. I think that the dealers and their european partners will make sure that a customer can have a very smooth digital journey through that combination of channel that works incredibly well and provides frankly a lot more opportunity and options to customers going forward. It's just another way of buying a vehicle. We'll look into the future mike as the new Ceo of Autonation. Where do you want to take it next? The company has been around For about 30 years. It's one of the biggest companies on the Fortune 500. How do you want people describing autonation a few years from now, but we are in a fantastic position. What you will find with us is historically, we have been incredible innovators and that will continue into the future Now, whether it's our digital platform, whether it's our geographical coverage, whether it's the processes that we put in place, how we train ourselves executives, how we provide charging stations in all of our facilities for our customers. So we're going to continue to be known as innovators. We're going to continue to build on our phenomenal brand. We're going to continue to put the customer center of all of the things that we do. And I just think that the future that we're entering into will include changes, there's no doubt it will mean that people have to go to market in different ways. But automation is incredibly well placed. Well, you've been in the auto industry for most of your career and you have dealt with all of the ups and downs in this industry. What does it take to be a leader? A successful leader in this time of so much change and disruption. First, you have to be tenacious, um you have to be able to pivot, you have to be able to inspire people and motivate people. You have to be able to bring groups of people together and make sure that the direction of travel isn't exactly the same direction and people are very clear on what we as an organization are trying to achieve and I think it's a combination of those things. I mean persistence is also incredibly important because sometimes you have to push through barriers, whether it's marketplace barriers or other barriers to make sure that your company and your employees continue to thrive. And our industry has been around over 110 years. So we are known for innovation. We are known for agility. But most importantly, what I think is true to a leader is that you have to live the values of the organization and what you want to stand for.

 Cheryl, I guess it's not easy to take over from a person like Mike Jackson. He's a powerful, charismatic CEO. He's been running AutoNation for more than 20 years. What are you doing to put your personal leadership stamp on the company? Susie, the way I think about my personal leadership stamp is really the forward look of the company and really empowering the next generation of leaders. Business is moving extremely quickly. There's a lot of disruption out there. So really leading that next wave into the future from working with a diverse group of associates to autonomy, to future mobility, and serving our customer in digital. So that's the era that I'm going to be shepherding in from both a leadership style as well as from a business perspective. This is the first time you've had the job of CEO. So how often do you turn to Mike and ask for advice? And given that he's still executive chairman, how often does he come to you and give you some behind the scenes advice and suggestions? So the great thing, Susie, with Mike and I is we were next door office neighbors for over five years. So we really understand each other's working styles. So periodically, I'll stop by with a question or Mike will stop by with a comment or question for me. And so we have a really good working rhythm as needed. I'm running the company. He's great with that. We're fully aligned with that. He, obviously, is helping run the board as chair. But we have a really good back and forth on key issues when needed. So when you do get advice from him, what's the best advice you've gotten? One of the great things with Mike Jackson is if you're not early, you're late. And so really the discipline to time management. So Mike Jackson is the master of that, and that's something, making sure that you're spending enough time with your customers, enough time with your associates, and on the things that really matter-- and so that's some of the best advice I've gotten from Mike. Now, the timing of your appointment as CEO was unusual. At first, AutoNation selected Carl Libert, who's an outsider with very little experience in the auto business, to be Mike's successor as CEO. But then four months later, the board switched gears and asked you to step in. How did you feel about that? I felt like it was a great moment to show resilience, right? And so I have worked at the company for a while. I've leaned very heavily operationally. I certainly was in the CFO role before. And my goal has always been to work well for the company. So whatever is needed to help lead the company into the future, I've always been there for. And so I was thrilled at the opportunity to lead 26,000 associates. And I've worked closely with the board and was next door neighbors with Mike before, so very familiar. And I'm really excited about the future. It was a surprise announcement, so what are you doing to get shareholders, employees, even Wall Street comfortable with this big change now that you're the boss? I think one of the nice signs when you take over is what did the stock do? So when the stock's up double-digits on the day of the announcement, it's a nice start. And that feels good for associates as well. Tell us about your first 30 days on the job. What have you been doing? So the first day was earnings day, and that's something I've done for years. Right after that, we did associate town halls. I met with our leadership team. I've been out in stores. And we're really focused on running today's business and also focused on business in the future. So we're working on our brand extension strategies. We're working on our strategic relationships with key partners as well. So the nice thing about having been in the business is that I know it well. It's a business that I love. And so a chance to really just hit the ground running was something that I was really excited about. I heard at that town hall, you got a standing ovation. How did that feel? It was great. So when you look out in an audience of people that you know well and you get the standing ovation, it was pretty neat. Mike was standing as well. It felt very good that validation that you saw in the stock price, but also with our associate team as well. So just about everybody describes you as a relationship person-- you have this personal touch, whether it's with employees or with customers. But how would you describe the way you lead? What's your leadership style? Engaged. I love to be engaged. So I walk around. I like to see what's going on firsthand. I like to hear from customers. I like to hear from associates. So on the day of my announcement as president and CEO, I got a lot of amazing emails. And the ones that meant a lot to me were people that were in amazing roles that used to work with me or work for me-- some within the company, some at other places where they've gone on domestically or overseas on to great things in their career. And that's something that's important to me. The hallmark you leave as a leader is what you do for other people. So many young women aspire to be a successful business leader like you, and maybe one day to be the CEO of a big Fortune 500 company. What's the most important advice? I always say, listen. So make sure you're listening and learning. Make sure you're working hard. And don't be afraid. So one of the things-- if an opportunity presents itself, don't be afraid to take it. Always be thinking about possibilities-- not limitations, but possibilities. 

AutoNation CEO's Leadership Advice For Women: Think Possibilities

Cheryl Miller is the first female CEO at AutoNation, the world's largest auto dealership, and Fortune 500 company.

Cheryl. I guess it's not easy to take over from a person like Mike Jackson. He's a powerful, charismatic CEO. He's been running AutoNation for more than 20 years. What are you doing to put your personal leadership stamp on the company? Says easy. The way I think about my personal leadership stamp is really the forward look of the company and really empowering the next generation of leaders. Business is moving extremely quickly. There's a lot of disruption out there so really leading that next wave into the future from working with a diverse group of associates to autonomy to future mobility and serving our customer in Digital. So that's that's the era that I'm gonna be separating in from both the leadership style as well as from a business perspective. This is the first time you've had the job of CEO. So how often do you turn to Mike and after advice? And given that he's still executive chairman, how often does he come to you and give you some behind the scenes advice and suggestions said The great thing is A with Mike and I, as we were next door office neighbors for over five years, so We really understand each other's working styles. So periodically I'll stop by with a question or Michael stopped by with a common or question for me. And so we have a really good working rhythm as needed. I'm running the company. He's great with that. We're fully aligned with that. He obviously is helping run the board as chair, but we have a really good back and forth on key issues when needed. So when you do get advice from him, what's the best advice you've gone? One of the great things with Mike Jackson is, if you're not early, you're late and so really the discipline to time management. So Mike Jackson is the master of that. And that's something making sure that you're spending enough time with your customers, enough time with your associates and on the things that really matter so that some of the best advice I've gotten from Mike now they're timing of your appointment as CEO was unusual. At first. AutoNation selected Carl Ebert, who is an outsider with very little experience in the auto business, um, to be Mike's successor CEO. But four months later, the board switch gears and ask you to step in. How did you feel about that? I felt it was a great moment to show resilience, right? And so I have worked with the company for a while. I've leaned very heavily operationally. It certainly was in the CFO world before. And my goal has always been Thio work well for the company. So whatever is needed to help lead the company into the future. I've always been there for and so I was thrilled at the opportunity to lead 26,000 associates. And I've worked closely with the board and was next door neighbors with Mike before so very familiar. And I'm really excited about the future. It was a surprise announcement. So what are you doing to get shareholders, employees, even Wall Street comfortable with this big change that now that you're the boss, I think one of the nice lines when you take over is what stock? D'oh! So when the stocks up double digits on the day of announcement zone I started that feels good for associates as well. Tell us about your 1st 30 days on the job. What have you been doing? So the first day was earning day, and that's something I've done for years. Right after that, we did associate town halls. I met with our leadership team. I've been out in stores and we're really focused on running today's business and also focused on business in the future. So we're working on our brand extension strategies. We're working on our strategic relationships with key partners as well. So the nice thing about having been in the business is that I know it well. Ah, it's a business that I love and a chance to really just hit the ground running with something that I was really excited about. I heard of that town hall. You've got a standing ovation. How did that feel? It was great. So when you look out in an audience of people that you know well and you get the standing ovation. It was pretty name. Mike was standing as well, and it felt very good, that validation that you saw in but the stock price, but also with our associate team as well. So just about everybody described you as a relationship person, and then you have this personal touch, whether it's with employees or with customers. How would you describe the way you lied. What's your leadership style? Engaged? I love to be engaged, So I I walk around. I like to see what's going on firsthand. I like to hear from customers I like to hear from associate. So on the day of my announcement as president CEO, I got a lot of amazing e mails, and the ones that meant a lot to me were people that were in amazing roles that used to work with me or work for me. Some within the company, some in other places where they've gone on domestically or overseas, on to great things in their career. And that's something that's important to me. The hallmark you lied leave as a leader is what you do for other people. You know, so many young women aspire to be a successful business leader like you, and maybe one day to be the CEO of a big Fortune 500. Ah company. What's the most important advice? I would say. Listen, to make sure you're listening and learning, make sure you're working hard and don't be afraid so one of the things that if an opportunity presents itself, don't be afraid to take it. Always be thinking about possibilities, not limitations, but possibilities

[ SOUND ] Carol, this is a challenging time for you to take over as the new CEO of Auto Nation. You know, we look and see the economy is slowing, auto sales are weak. What is your take on the outlook for auto sales for the rest of this year and going into 2020? So the way I see it, Suzy, is the customer's in pretty good shape, so I feel reasonably good about where auto sales are and where they're gonna be for the balance of the year. Certainly, the business is [ UNKNOWN ], but it's at a pretty strong point still. Where do you see most of the growth coming from? The two places that I see growth in automobile sales is nearly new, is the first one. So as the customer Looks at the affordability for new vehicles. If you look at the data, the average monthly payment for new vehicles $ 550 a month. That's a lot for some customers. So we're seeing people shift into nearly new. And then the second place we're seeing demand is in trucks and SUVs. So if you think about the industry and the data 70 % of purchases are in trucks and SUVs, so that's really where we're seeing the customer. State their preferences in the market. So you have these AutoNation USA stores which deal with these pre- owned vehicles. Do you see that it makes sense to add on more of them, given what you're saying about newly new? So we have five AutoNation USA stores and we love that customer proposition, so that's no haggle. It's transparent for the customer. It's a one price fixed price methodology in those stores and the customer loves that. We're gonna be smart about it, we've built five we've paused. We've gotten those to break even. And we're gonna continue to work on that business and see how much more opportunity there is within that really strong, nearly new segment of the business. You talked about the consumer in good shape just a moment ago, and I know you do spend a lot of time going and visiting dealerships, and talking to customers. What are you hearing from them? Tell us a little a little bit more color on that. What is the consumer mindset? They love the new product. They're interested about electric, so if you think about electric only 1 million of US vehicles today are electric. Out of a car park of 278 million. And so, it's still small. But they're interested in learning a little bit more. And from customers, they still wanna purchase. And they still want to service with us. And as you think about complexity of vehicles, customers are increasingly interested in their dealers. And servicing at auto nation because of the technical complexity of the vehicle and they feel comfortable that we know that and can manage that for them, fix it right the first time .>> But when you talk to customers, to what extent do the scary headlines we're seeing whether it's about. Trade conflicts, stock market sell- off, recession worries, impacting their confidence. So one of the things that's been interesting over the last couple weeks is customers now know the phrase inverted yield curve. Right, when they see headlines, it does put them on pause for a minute. But we do feel like with the amount of jobs, and the employment rate within the country that we're still seeing good interest in purchasing and servicing vehicles. Yeah, pricing is so important for consumers. And we've seen more and more consumers, especially the milennials are doing comparison shopping online. They are. And buying A vehicles online. To what extent are you changing or updating the ways that you sell vehicles? So our donations when working on digital for years, and so we have the ability to search vehicles online reserved vehicles online apply for financing we want to meet the customer where they are. So some millennial customers love Going through online. And some of our other customers say wait a second, this is the second biggest ticket item I'm gonna buy in my lifetime and I'm not quite comfortable there yet. So we wanna have the right offerings to meet the customer where they are. I'm sure there are things that you've always wanted to try out or experiment with and do differently at automation. And now that you're in the driver's seat, what are your plans? What do you want to do differently? One of the things I like to do is continue to focus on the future. So thinking through mobility and how we continue to be a best- in- class provider. And mobility. I'm also focused on a continued increase in diversity. So as I think about the workforce of the future, what does that look like. How do we upscale jobs within digital, within robotics. Those are some of the things that I'm really excited about working on. So where does Weibo fit in with your strategy? How important is it? This partnership that you have with Google. And what the way my relationship shows is how relevant we are in mobility in the future. So when people ask the question about bricks and mortar and what is auto retail look like in the future, we're on the ground floor with respect to that. So we're learning Along with WAYMO, how to service these really complex vehicles and what that looks like with respect to customer preferences. Are customers excited, are they afraid? What does the future look like? There's a lot of talking curiosity about autonomous vehicles, how far off do you think it is before those kind of vehicles will be sold in lots in autonation So when I think about autonomy, it's relatively small today. And when you think about the size of the US cars on the road, there's 278 million cars on the road so it's gonna be a long time with the average. Of those cars being 12 years old nearly. So it's going to be a long time before there's a lot of autonomous vehicles out on the road at scale, but we're certainly partnering to help make some of that a reality. [ BLANK_AUDIO ]

AutoNation CEO Says Auto Sales Are 'Pretty Strong' and Consumers Are in 'Good Shape'

Autos

AutoNation is the world's largest dealership and CEO Cheryl Miller says there's strong demand for SUVs, trucks, and "nearly new" vehicles.

So my very first job was it Mr. Donut did pretty well there. I was employee of the month the first month that they offered it. And so I then had a chance to work across the street at friendly snowballs where I managed the snowball stand. And at that time I figured if you can manage 15 and 16 year olds, you can manage it. Anybody. [ MUSIC ] So when I think about my early jobs, what I learned is that every role is important, and that you start from somewhere. And so if you take care of the customer well, they tell your boss and they tell your boss's boss and then you get more opportunities. So no matter what role you're in or what role you started, if you do well, you have great opportunities. I see that every day in our business. So we have associates that start in the mailroom. They start off as Porter's, and five years later with development, they're working on the technology team and they're working as sales associates and it's pretty neat to see when a mountain Stores, people that wants worked in the mailroom of the corporate headquarters and a really exciting role today. [ MUSIC ] So one of the biggest things in order to reach positions and leadership I think you have to be good at is listening. It's hard. Many of us are trained to talk. And I think you learn the most when you actually listen. So you have to listen to your customer. You have to listen to your associates. You have to listen to vendor partners and listen to the people that work for you, and if you 've staffed that team well, they'll tell you the truth. Some days, the truth is, hurts a little bit, but you always learn from it. [ MUSIC ] So it's interesting when I think about when did I realize I wanted to be CEO, it's not something that you always think about. It happens along the way as you're focused on your company and as you're focused on developing other people. So, one of the biggest things from me has been, how do you grow other people? I've been Given a lot of great opportunities and a lot of great mentorship in my career. So I've always thought about building other people and along the way when you combine that with taking chances and taking on different roles You get some great opportunities and in this case it was to be CEO and president of automation a company I'm extremely proud to lead. [ MUSIC ]

Most Powerful Women: Cheryl Miller

She's the President and CEO of AutoNation.