mike jackson, ceo, autonation

8/2/2019 Mike Jackson, CEO, Autonation

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30 LIFESTYLES MAGAZINE FALL 2011

Red,

whiteand greenDont be mistaken: Mike Jackson may be sellingluxury cars in the American Sunbelt, but hed be just

as happy putting customers into the newest hybrid.

And heres how he plans to make that happen.

By Darren Gluckman

ike Jackson doesnt shy away from inconvenienttruths. He marched against Americas war in Viet-

namand he doesnt mince words when discussing

its current wars; he ditched legal briefs for overalls;

he oers short-term career advice to Tiger Woods; oh, and he advocates

for higher gas taxes. at last bit might sound odd, considering that, as

chairman and CEO of AutoNation, Americas largest network of automo-

tive dealerships (over 8 million vehicles sold to date), he is the countrys

leading car salesman.

We view ourselves as the voice of the customer to the manufacturers,

M

Mike Jackson.indd 30 7/19/11 11:13:18 A


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PROFILEMike Jackson


he says, although Jackson is clearly more than just a mouth-

piece. He has a vision about where to go, and he wants his

customers to follow. Higher gas taxes would presumably

hit them where it hurts. But while 60 percent express an

interest in hybrid vehicles, and while every manufacturer

oers them, only 2.5 percent of Jacksons customers leave

the dealership in one.

Were there for the moment of truth, he says, when the

customer has to write the check. And its a simple, back-of-

the-envelope calculation for most prospective car buyers:

Given the relatively low cost of gasoline, it takes too long

in accumulated fuel savings to oset the premium in the

price of the vehicle. e technology doesnt come cheap.

Keeping the cost of gas high, on the other hand, would

maintain the incentive for drivers to make the opposite

calculation and thus for manufacturers to increase pro-duction. ere is no question that fuel-ecient vehicles

are, at present, more expensive than their less ecient

counterparts, but two factors have now converged to give

hybrids and their ilk a ghting chance: technological ad-

vance and consumer desire.

On the rst point, Jackson states that, contrary to one

fashionable conspiracy theory, General Motors did not

kill the electric car 20 years ago. e battery killed the

electric car 20 years ago. In other words, the technology

wasnt up to par.e battery of 20 years ago was perhaps

suitable for a golf cartthis is no longer the case. Highlyfuel-ecient and alternative fuel-based vehicles today are

capable of performing in line with customer expectations.

We really are on the cusp of a technological revolution

in terms of how cars are moved, he says, citing electricity,

natural gas, diesel, and tremendous advances in the in-

ternal combustion engine. Indeed, the industry is poised

to improve fuel economy from todays vehicle average

of 24 miles per gallon to a targeted 35 mpg by 2015. But

while, technologically, the industry may be at a 100-year

inection point, it is that tricky second factorconsumer

desirethat threatens to gum up the gears. Asked about the role of auto-sharing companies like

Zipcar, he says, I think its a wonderful niche, but its a tiny

niche. A unique solution in certain urban markets, its nev-

er going to be a signicant part of the marketplace. Why

not? e automobile is a unique American expression of

individual freedom. And while Americans are a generous

people, he says, asking them to share their automobiles is,

beyond that niche market segment, a nonstarter.

Jackson argues that the vast spread between the per-

centage of customers genuinely interested in fuel-ecient

vehicles and those who actually purchase them is largely

tied to the price of gasoline. As long as gas remains cheap

(Europeans pay about twice as much per gallon as Ameri-

cans do), customers are less nancially motivated to invest

in fuel eciency. And at present, even where they do, over-

all consumption remains high.

Here is the irony, he observes, with the slightly exasper-

ated air of someone trumpeting an unpopular idea. If we

as an industry improve fuel eciency and you dont change

the price of gas, then the cost per mile driven goes down;

therefore, people drive more. Americans, he notes, are liv-

ing in homes that are 30 percent bigger than they were 20

years ago (thus incurring higher energy bills), and driving

vehicles that are also 30 percent bigger (thus requiring

more powerful engines) in the course of longer commutesto and from work (thus requiring more gasoline).

e inconvenient truth, as Jackson asserts several times

in the course of a conversation, is that just improving the

fuel eciency of the vehicle does not in and of itself ad-

dress social responsibility issues. On the other hand, he

states that if you tax gasoline, then the consumer is going

to value fuel eciency, both in terms of how they use the

cars they already have and the type of vehicles they buy,

leading to an overall decrease in gasoline consumption.

Why does this matter? More specically, why does this

matter to Mike Jackson?He was on vacation in the summer of 1971 when his

1959 Mercedes SL broke down in Hyannis Port, Massachu-

setts. Without the money to pay for repairs, he oered his

services to the local Mercedes dealership in exchange for

help with the car. Planning to enter law school that Sep-

tember at Georgetown University, he grabbed a broom and

did what was required as the low man on the totem pole.

But by summers end, he had developed a real interest in

and aptitude forautomotive mechanics. To his parents

chagrin, he decided to delay law school for a year. A year

turned into a lifetime. But this about-face wasnt the resultof an epiphany, or the owering of some adolescent fasci-

nation with cars. Not at all, he says. Rather, it was a salami

decision. One slice at a time.

And so, several slices later, he wound up buying his own

dealership at age 29, eventually becoming CEO of the Mer-

cedes-Benz North American operations. ere, facing de-

clining sales gures and an iconic name that had begun to

be perceived as staid and even a bit stale, he reinvigorated

the brand by cutting prices, introducing new lines, and



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PROFILEMike Jackson


against the nervous inclinations of the head oce in Stutt-

garthe deployed irreverent ad campaigns, including one

that made use of the Janis Joplin songMercedes Benz.

In 1999, Jackson was recruited by H. Wayne Huizenga to

AutoNation. e company, with about 19,000 employ-

ees, has over 200 dealerships, mostly concentrated in the

American Sunbelt: California, Nevada, Arizona, Texas, and

Florida. is focus is based on demographicsthere has

been and, the company believes, there will continue to be

higher growth rates in this regionbut Jackson, who grew

up in Philadelphia and spent years in New York, makes no

bones about enjoying the temperate climate. e North-

east can wear you out. And what does the King Kong of

car dealers drive? A compact, low-emission Fiat 500. (OK,

his other car is a Benz, a sleek, black CL 600.)

He says his reputed interest in golf is overblown; he only

makes it out to the links a few times a month, though he

does admit to a rigorous exercise schedule (twice a day)

and sensible diet. e business is open 364 days a year,

with East Coast stores opening at 7 .. and West Coast

stores closing at midnight their time. Accordingly, staying

healthy is a priority. You only get one body from the Lord

above, he says, and you better take care of it to give your-

self the best chance you can.Returning to the golf front, hes bullish on Tiger Woodss

successful return to the game. eres no question hes

coming back, Jackson oers, suggesting that Tiger take the

rest of the year oto return to mental and physical health.

But Tiger isnt the only one who has experienced recent

setbacks. e entire automotive industry has suered a

number of signicant blows, starting with the recession

that began in 2008, continuing with the recall issues af-

fecting Toyota in 2010, and culminating in the tsunami

that impacted all Japanese imports earlier this year. Au-

toNation had to completely revise its 2011 business plan,

but Jackson remains condentenough to have recently

allowed a reporter to sit in on the companys daily meeting

with top executives and regional managers. At 62, and on

the move, hes determined to keep AutoNation out of the

rough, on the fairway, and with a good look at the green.

And speaking of green

I love America, he says. Doesnt mean America gets it

right every time. Hes talking about Vietnam, and explain-

ing his 1969 run-in with the National Guard while march-

ing on Washington. But hes no peacenik. e proud son

of a father who served in the Navy as a pilot during World

War II, he supported the U.S. invasion of Afghanistan.

Its from where we were attacked and it had to be ad-

dressed, Jackson surmises. Iraq, on the other hand, he

calls a huge strategic mistake. As for the countrys current

imbroglio in Libya, he declares it a close call. He explains,

Americas military might is dependent upon the strength

of the U.S. economy. e U.S. economy is struggling and

has huge challenges. e U.S. military is overstretched

from 10 years of wars. To start a third one, you need to re-

ally think long and hard.

And its this love of country that has helped shape hisposition on fuel eciency. Indeed, in a broad-ranging dis-

cussion on the issue, global warming barely rears its head.

Rather, national and economic security, and the extent to

which both are imperiled by American dependence on for-

eign oil, seem to animate Jacksons approach to all things

green. Exporting hundreds of billions of dollars of Ameri-

can capital each year because we dont have a coherent

energy policy is wrong, he states atly. What were doing

is unsustainable.

Exporting hundreds of billions of dollarsof American capital each year because

we dont have a coherentenergy policy is wrong.

What were doing is unsustainable.



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PROFILEMike Jackson

35LIFESTYLES MAGAZINEFALL 2011PHOTO COURTESY OF AUTONATION

In his view, two things

need to occur simultane-

ously. America needs to

produce as much of its en-

ergy domestically as pos-

sible. For this reason, he

supports responsible oil

exploration in Alaska, the

American West, and o-

shore drilling. He notes that

domestic natural gas pro-

duction has soared in the

past decade because the in-

dustry continued to invest

in exploration and related

technologies. But depen-dence on foreign oil is an

addiction that no American

political leader has been

able to break.

On this issue you can go

all the way back to Eisen-

hower, he notes. Presi-

dent Eisenhower said that

Americas dependence on

imported oil was an issue

of national security. At thatpoint, America imported 20

percent of our oil. Now we

import 60 percent of our oil.

Why? ere is the expecta-

tion in America that Ameri-

cans have a divine right to

cheap oil. is is, he says,

one of the third rails of American politics. Our political

leaders, he observes, have a great deal of diculty talking

about personal responsibility.

And this leads directly to the second factor that Jack-son believes is necessary in order for the country to cor-

rect its courseits citizens need to change both the way

they drive and the types of vehicles they buy. Ultimately,

they need to consume less gasoline. I make the decision

to live vertically, close to where I work, says Jackson. I

have a short commute. He lives in what he describes as a

highly energy-ecient apartment of modest square foot-

age, three miles from his oce. is is, he says, one of the

most green-friendly ways you can live.

But he is adamant that in order to encourage drivers to

adjust the way they consume gasoline, higher gas prices

are necessarynot periodic spikes as a result ofuctua-

tions in supply, but levels consistently regulated throughtaxation. e result, he asserts, will provide the economic

incentive that his customers need to invest in fuel-ecient

vehicles. As more of them do, and as adoption rates in-

crease, the cost of the technology will inevitably decrease.

Consumption will fall. Dependence on foreign oilespe-

cially if domestic reserves are tappedwill decline. And a

measure of security and sustainability will return to the

battered American economy. In Mike Jacksons view,green

is just another word for red, white, and blue.

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mike jackson, ceo, autonation

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