Beating the Succession Odds

In the pop world there are the Dave Clark Five, the Jackson Five and Maroon Five. In the spy scene, it’s MI5. The Olympic gold medal winning women’s gymnastic team dubbed themselves the Final 5.

And, in the dealership world, it’s the G5s.

The G5 is the fifth generation that is now running Cox Auto, which consists of Cox Chevrolet and Cox Mazda in Bradenton, Fla. The Cox family started in the dealership world in the early 1900s and through the decades the family opened and closed stores, moved from Georgia to Florida, and survived a world war, gas shortages, the popularity of Japanese cars, GM’s bankruptcy, technology and fickle consumer tastes.

But perhaps their biggest — and most challenging — accomplishment is keeping the family business alive, something few family businesses accomplish. The Cox family not only beat the odds, they’re changing the game of how to pass on dealerships to generations.

It’s actually quite rare to have the fifth generation still active in the family business. Less than 30 percent of all family-owned businesses survive into the second generation. Twelve percent go into the third generation and less than 3 percent are still family-owned and operated at the fourth-generation and beyond.

The fourth generation Cox brothers, Steve and Gary, who took over around 1996, stated thinking about the next generation long before their kids were out of school. They brought in professionals to assist in what a transition team would look like and started conversations early with their kids to see who was interested and willing to work for a role in the dealerships.

Avoiding Succession Woes

Those who were interested agreed to a succession plan. “At that point we were at different stages in our educations and we started a rotation at the dealerships so our parents could see what we were interested in and good at,” says Kris Cox, 39, Gary’s  son who is president and CEO.

The apprenticeship not offered much needed experience but it made the G5s earn the respect of the entire staff. “The biggest thing businesses face with children coming into the business is that they don’t earn the respect of the management and each of our kids earned that respect,” says Steve. “That’s the hardest thing to overcome and they were not given golden spoons and told they could just step in.”

Kris, too, had seen the disaster of transitions. “As I grew up I could tell which dealers’ kids would make it and which would not. Some just didn’t have any interest but their moms and dads were pushing them and they could care less. All they wanted to do was get in there and live off the luxury of it. They let things drop. You could see it the day they took over; the manufacturers could see it too.”

That wasn’t going to happen at Cox. The kids were expected to work in the dealerships while in school, graduate from college, earn an MBA and go to a dealer academy in order to put their hat in the succession pool. Then they had to work in all the profit centers and get as much exposure to academic and training opportunities as possible as well as 20 groups and industry programs.

Slow Integration

“That’s why it worked so well. We slowly integrated the kids into our staff and processes. We would get feedback from everyone,” says Steve. “Our integration wasn’t a clear cut line. There was no date for the transition and we told everyone that they weren’t coming in to take away any jobs. As we grew, we added new positions.”

As it turned out, six siblings and cousins made the cut. “I think the intention was to start weeding us out,” Kris says with a laugh.

Kris came back from working at a dealership and an internet company in 2003 and was told to go to a newly purchased Mazda dealership and “start doing that internet thing you keep talking about,” he says with a laugh.

The dealership had a website and one person in the department answering the fax leads. “That’s how we started to formalize our internet processes. We’re always looking at what would give us a competitive advantage. We grew our business significantly doing things, like in the technology arena, that others weren’t doing.”

Steve started selling his shares about seven years ago and Kris was the first in line.  Vendors, district reps, GM officials — everyone who did business with them — knew of the integration plan. The official transition, complete with work chart, took place in 2014. “My dad and Uncle Steve did so well at transitioning that when it happened, many thought it had already happened. We didn’t skip a beat.”

In-Laws Need Not Apply

Today, Jay, Kelly and Kyle Cox and Jennifer Cox-Lipsey run Cox Chevrolet and Cox Mazda as partial owners with Kris serving as president and CEO and Tammy Cox-Leavell as vice president and CFO.

Kelly is general manager at the Mazda facility and  Kyle is head of the business development center and the internet operations. Jennifer handles HR and Jay is the elite fleet commercial manager. The six, plus Gary and Steve, meet every Tuesday.

“Gary and I never had major conflicts. We either mutually agreed on something or we’d let it go. It was 50-50. We just worked it out and so will the G5,” Steve says.”

The do have one family rule. No in-laws. “Early on the six of us made that decision,” says Kris. “We don’t need to muddy the waters with in-laws. I think that’s been a great decision.

While the G5 are running the dealerships, they are firmly ingrained in the family’s history and values.

Family Values

“My uncle taught me early on to stay engaged in your vendor relationships and we do. We’ve been with Jim Moran and Associates (finance and insurance partner) for over 30 years. We’re their first non Toyota account. My cousin Tammy is very involved with Reynolds and Reynolds (DMS provider) and I work closely with our digital marketing folks.”

They also were taught the value of customer service and appreciating employees. “We still believe in treating customers the way they deserve to be treated. We use technology but there is a real person behind the technology.”

They realized people were approaching them on the internet, not necessarily because they had the best price, but for helping them save time, respecting them and being honest. They offer complimentary one year maintenance on all new Chevrolets and used cars. Its trade-in guarantee is that if a customer wants to sell a car, they’ll buy it even if the customer doesn’t purchase one.

They are a 24/7 operation and they answer calls, texts, emails and Facebook posts at any hour. If you have a question at 3 a.m. you can go to the website and have an online chat with a real person who will answer the questions the best they can. They get enough information to ensure the right person follows up quickly. “We get hundreds of those a month,” says Kris.

Want a test drive but don’t want to go to the dealership? No problem. They’ll bring the vehicle to your office or home.

They also have transparency in their reviews. Regardless of a positive or negative review, they not only post it, but they name the employees who dealt with the customer.

Perhaps their most popular advantage is the Internet Express Lane. If they can’t agree on the price or payment in an hour or less, dinner is on them.

“I just don’t think dealership pay enough attention to customer or their employees,” says Steve. “I was raised to go have coffee or lunch with the employees. We get out there, know our employees and their kids. We go to their ball games. And we give this same personal attention to our customers.”

In the Beginning…

The Cox legacy started back in James Pleas Cox, Steve’s great-grandfather operated a Ford franchise and furniture store in Ocilla, Ga. He also opened a Dodge dealership and a turpentine business in Avon Park, Fla.

In 1926 J.P. returned to Ocilla and, with his son, J.O. Cox, Sr., opened a Chevrolet store, and shortly after that, another one in Tipton, Ga.

The Depression and WW II

The Depression hit and they closed the dealerships, moved to Bradenton, Fa., (with many of their employees and all of J.P.’s family), and in 1932 opened Cox Motor Co. with eight employees. Despite the hard time, the sales grew and reached annual sales in $218,00 in 1934.

World War II was a challenge with shortages and ration. In 1941 they moved the parts department into the showroom.  They created their own machine shop creating spare parts.

“Today people talk about self-service and parts today. We had that back in the 40’s,” says Steve. “People would come in and buy an oil filter. We also had to recycle oil and put new grooves into tires for traction” That practice was called re-grooving and they would carve new grooves in previously bald tires giving them a bit more time on the road.

Oil was also in short supply so they would filter used motor oil through sand and charcoal layers and mix it with fresh oil and additives.

With the end of the war, J.O. Cox Jr. came back and guided the company for the next 30 years.

Filling Soda Pop Machines

The company prospered and saw its first million dollar sales year in 1953 and in 1954, the dealership sold 1,000 cars. By 1959, new and used car sales totaled 1,500 vehicles.

Steve Cox made it onto the company payroll in the sixth grade where he would wash windows, clean, feed the city meters for parked cars and take care of the vending machines.

“I had to fill the soda pop machines and I created my own business,” Steve recalls. “My dad and our business manager, Miss Edwards, set up a cash bank. I had to collect the coins out of the machines, roll them, create a ledger and give the money to Miss Edwards. I kept track of income, expenses and my profit. When I was old enough to work part time, Gary took over my job. If we didn’t come in, there weren’t any Coca-Colas!”

Gary says working during those years was a lot simpler than today. “The regulations weren’t there. Today half your time is cutting through government or company regulations. I started in sales but I concentrated in F&I, which was a brand new thing.”

In addition, they sold insurance and upgraded telephones away from the four-button phone. “We installed an intercom service so you could talk to the parts department. We did that way before anyone else in our area,” he says.

Success Decades Later

In 1934, the company had $200,000 in annual sales, in 1990, that was $30 million; today it’s $200,000 million. They are in the top 10 of Chevrolet dealers in the state and their sales exceed 3,000 units a year. They recently expanded to 40 service bays. There are just over 200 employees. The Mazda shop has 30 employees and sells between 800 to 1,000 units a year.

“We have gone through successions and generations and we’re continuing to grow,” says Kris. “We have so much talent available that, when we combine it with our employees and share our vision, we’ll always be in a growth mode.”

The oldest of Generation Six is eight and passes out business cards hangs around the dealership. “There’s some interest there,” says Kris.

They are looking for opportunities to expand. “Our efforts can be multiplied by six,” he says. “My father was a team of two. We’re going to take the foundation they gave us and, just by sheer numbers, we’re going to be in every nook and cranny of the business.”

Adding, “We’re going to remain relevant in the industry and grow when opportunities present itself.”

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