Top 50 minority-owned businesses
Once it was the largest Hispanic-owned business in the U.S., and perennially the top minority-owned company in Colorado based on annual revenues.
Now Burt Automotive Network is in the final stages of divesting its retail automotive dealerships and declined to disclose its 2009 revenues as required for the ColoradoBiz Top 50 Minority-Owned Companies ranking (see the complete list).
Burt Automotive reported revenues of nearly $2.1 billion for 2008 and as recently as April of last year had eight dealerships. It’s now down to one dealership, with only Burt Chevrolet on South Broadway remaining. The sale of that store is due to be completed this year, apparently ending a Front Range retail auto dynasty that ran for 71 years. Lloyd G. Chavez Sr. started with Burt as a salesman in 1950, bought a quarter-interest in Burt’s new Toyota dealership in 1966, became majority owner in 1982 and bought the rest of the company in 1987.
“I’ve had a relationship with the Chavez family for years,” said Rod Buscher, president and CEO of Summit Automotive Partners and its subsidiary Groove Automotive Group, which has acquired four Burt dealerships in recent months. “I started the John Elway dealerships back in ’89, so we were always good competitors. They’ve had a great history in the business.”
Burt officials declined requests for interviews, but Chrysler’s move last year to close 789 dealerships across the country as part of its bankruptcy-related dealership reduction program, including 13 in Colorado, no doubt played a part in Burt’s exit from the retail auto business. Burt’s new Dodge Chrysler Jeep complex in Parker and its Buick Pontiac GMC dealership in Littleton were among those terminated.
Burt also has been one of the country’s leaders in fleet sales – high-volume sales to companies, government entities and organizations. Automotive News estimated that last year 49,468 of Burt’s total 68,899 new-vehicle sales were fleet vehicles. It’s unclear how much, if any, of that business will remain.
Given the state of the auto industry the past two years, the head of Mike Shaw Automotive Group wasn’t especially celebratory over his company’s ascent to No. 1 on the ColoradoBiz Top 50 Minority-Owned Companies list.
“Oh hey, I’m excited to be alive, to have survived it all. It’s not easy,” said Mike Shaw, who owns seven dealerships in Colorado, Louisiana, Texas and Utah and reported revenues of $220 million in 2009 – down 6 percent from a year earlier. “I’ve been in the business 43 years. I’ve been through downturns. This was the worst one I’d ever experienced. But we survived it. Business is slowly coming back everywhere.”
Ivette Dominguez, owner of Alpine Buick Pontiac GMC, which has climbed to No. 2 in this year’s ColoradoBiz ranking, called the forced closure of Burt’s Parker dealerships “tragic.”
“We’ve been very fortunate,” she said. “Even though we had a reduction in revenue in 2009, we were able to reduce expenses and didn’t have to do any reduction in head count, which was nice. I keep about 50 employees, so it’s kind of a manageable number. Our 2009 net profits were only off about 5 percent. So we were pleased with that, even though our revenues were down.”
Buscher of Summit Automotive Partners, which has grown to 32 dealerships around the country and includes the George Gillett family in its ownership group, is an auto industry veteran who is bullish on the future, seemingly more so than Shaw or Dominguez, who project gradual improvement.
Buscher had been out of the Denver auto market since selling the six Elway dealerships to Wayne Huizenga’s AutoNation (now known as “Go” stores) in 1998.
He gives a few reasons for his optimism: Savings rates are up; the normal attrition of cars will boost demand (more cars went to junkyards than were sold in 2009, he says); cars on the road are the oldest they’ve ever been, averaging 10 years, he says (“and cars do wear out,”); and third, Buscher says the 16-year-old population is the largest it’s ever been, “so there’s more kids coming into the market who need cars.”
Finally, he says, “There was a survey done recently, asking, ‘What will be the next large item you buy?’
“Over 50 percent of the people said it would be an automobile.”
Good for some, too late for others. Sound the alert. For the first time in 71 years, they won’t be buying at Burt.