Upgrade, Expansion of Dealership: Crazy or Visionary?

Jim Hawse has faced troubling times before. That is why the ongoing recession has not put the brakes on a $5.5 million renovation and expansion of his Lancaster auto dealership. The lesson Hawse has taken from past downturns and one passed along to his children working alongside him is that recessions end. When consumers are ready to spend again a smart businessperson will grab that opportunity and if a sparkling new showroom gives an advantage then it is one Hawse will happily take. When the project is completed later this year, Sierra Toyota and Sierra Scion will be a dominant presence in the Lancaster Auto Mall and the city. “It will be an eye catcher,” Hawse said. Yes, Hawse could have pulled the plug on the expansion. And, yes, there have been questions and head scratching by area business owners and other dealers at the mall. After all, the U.S. auto industry is in such a mess the Big Three turned to the federal government for a bailout. More than 800 dealerships closed last year, industry consulting firm Urban Science reported. According to the California New Car Dealers Association, nearly 10 percent of the state’s car dealers closed their doors in 2008. Past experience, however, dictated a different course for family-run Sierra. “You don’t want to just stop everything,” said Breegan Johnson, the dealership’s property manager and Hawse’s daughter. “That is not good for business and not good for the economy.” Those who know Hawse describe him as understanding that a weak economy is exactly the right time to build, as costs for labor and materials are considerably cheaper. A larger showroom holds more inventory, which can translate into more sales when the rebound occurs. Expanding the dealership shows confidence in the future of car sales, said Lew Stults, district director for Congressman Howard P. (Buck) McKeon and a former car dealer. “I think Jim has a vision of the future that he is not going to give up,” Stults said. Selling cars was not a future Hawse envisioned for himself after graduating from the University of La Verne. The car business, in fact, would not enter his life full time until after trying careers as a teacher (three years) and a firefighter/paramedic (four years). His father-in-law owned five dealerships in the San Fernando Valley and a part-time job was all Hawse needed to know he liked the work. He left firefighting after an injury and stayed with his father-in-law until 1994 when he became a partner in the Lancaster dealership. To understand the motivation of what Hawse is doing now is to understand the circumstances in which he joined with Bob Wright during a previous economic downturn; one that devastated the Antelope Valley that so relied on the aerospace industry. The opportunity that Wright presented was too good to pass up, even if that meant that Hawse and wife Cindy raided college and retirement funds to pay for their share. As a part-owner, the dealership became his life. “I wasn’t able to take time off for quite a while,” Hawse said. When Wright died in 1998, Hawse again leveraged his finances to buy out his late partner’s estate to obtain full ownership. Those were still lean years until the Toyota brand began to take off and the choices he made proved to be the right ones. By 2006, the dealership was selling more than 5,000 new and pre-owned cars a year and received Toyota’s President’s Award in 2005. Son Brett and daughter Breegan joined him in operating the dealership although like her father, Johnson hadn’t set out to make a career around cars. “I didn’t want to be in the car business,” Johnson said. “I did like the idea of being in the family business and taking on the real estate side of it.” The choices Hawse makes now have not always been easy. Staffing cuts, for one, were not something he wanted to do because it hurt good people. To ride through the recession the sales strategy swung from new cars to pre-owned, with an added emphasis on service and parts. It was, after all, a strategy that proved successful in the past.