Veteran car dealer rides over rocky road

Charles Oglesby has been through a lot in his 38 years selling cars, but nothing like the past two years.

Charles Oglesby

Charles Oglesby

As CEO of Duluth-based Asbury Automotive Group, the sixth largest car retailer in the country with 81 locations in 11 states, Oglesby saw:

– The stock price plummet to $1.60 a share from a high of $29.82. That prompted a warning letter about possibly getting delisted from the New York Stock Exchange.

– A credit crunch that squeezed his business — sales dropped to about $3.5 billion last year, from $5.5 billion two years before.

– A quarterly loss of $2.5 million at the end of 2008.

But all that was just a prelude to a more intense crisis. Oglesby, 63, and his management team were sent scrambling by an auditor’s letter saying there was “substantial doubt about its ability to continue as a going concern.”

That letter, dated March 16, 2009, meant that more than $500 million in debt could be immediately recalled by the firm’s lenders. If that had happened, Asbury would not likely have survived in this era of tight money, and 7,300 employees would have lost their jobs. (In metro Atlanta, Asbury owns the 12 Nalley dealerships.)

But the company escaped death, at least so far, in part by quickly preparing PowerPoint presentations showing the lenders it already was turning things around. Those presentations were given considerable weight, Oglesby said, because execs had kept the lenders regularly informed of company strategy before the “going-concern” letter was issued.

The company also was aided by the fact that much of its credit line came from car manufacturers, which would have lost a key sales outlet if Asbury went under.

To try to stabilize the company — before and after the “going-concern” letter — Oglesby focused on the mantra, “Relocate, reorganize, restructure. Anything that had a ‘re’ in front of it was absolutely essential for survival.”

The essence of the game plan was cutting costs:

– Moving the headquarters from Manhattan to Duluth, saving about $5 million a year.

– The dividend was suspended, saving $29 million.

– Capital expenditures were reduced by 75 percent in 2009.

– New car inventory fell by $255 million.

– The corporate staff was cut by 25 percent and six regional offices were eliminated.

From those measures and more, financial results turned around. A loss of 8 cents per share in the fourth quarter of 2008 was followed by a small profit in the first quarter of last year. Profits rose in the succeeding two quarters and analysts expect a profitable fourth quarter when the company reports earnings next month. The stock is up to about $13 a share.

Still, given the “going-concern” letter, some have questioned Asbury’s viability. Audit Integrity put it on a 2009 list of “companies with highest probability of bankruptcy.” On the other hand, Wall Street analysts are predicting a 78 percent increase in earnings this year.

“Who can say if the worst is over,” Oglesby said about car sales. “We must still fear the worst and hope for the best. But you can’t run your business by hoping for the best.”

I bet a lot of CEOs are thinking like that these days.

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11 comments Add your comment

will c

January 19th, 2010
8:49 am


January 19th, 2010
8:58 am

The old way of selling automobiles is doomed and these people cannot see it. What kind of payment you looking for? Doing anything to keep from talking about the price of the vehicle and so called dealer add-ons. Keep doing business that way and it will take much more than a Powerpoint presentation to help you.


January 19th, 2010
10:14 am

maybe if the people at nalley were honest they’d sell more cars

Atlanta's Best Place to Work ????? NOT!

January 20th, 2010
12:54 pm

Rule 1) What comes around goes around! Learn how to treat your employees and your employees will take care of your valued customers. This company will fail because off their arrogant and greedy disposition. THAT’S UNFORTUNATELY IS THE BOTTOMLINE.


January 20th, 2010
3:55 pm

Nalley will make it. There roots are strong and they have a good following. I have been with the company for over a decade, and worked my way up FINALLY, as long as you have something to offer the company and not looking for what the company can do for you, then they have always taken care of there employee’s


January 20th, 2010
3:59 pm


Edgar Casey

January 20th, 2010
6:11 pm

Nalley is not the company that the Nalley family started. The Nalley family made a company which focused on the customer and the employee and they were successful. It was built on a foundation of helping people and because of this they were profitable. The Nalley family now runs its own chain of auto dealerships and they are doing just fine. Asbury is about a corporation which needs to make a profit regardless of how it treats people. It answers to the stock holders, because of this greed they are heading down the road that many greedy business men have followed in the last year. This road leads to bankruptcy.

cars for life

January 21st, 2010
4:55 pm

As some one who knows the business in and out Nalley has not lost any vaules that it was founded on. The company continues to pour out satisfied customers in serivce and sales. This business is always looked down upon as if we are the bad guys. The Nalley family and Asbury Auto are two companies that strive to change how the american population buys cars. Everything is on the climb! Mr. Ogelsby has done great things for the company and will continue to do whats right for the comapny, its employees and the customers. That will never end.


January 22nd, 2010
10:33 pm

As is the case in many an industry, the top of this organization has the job of protecting their own jobs. No matter how relevant a plan for new direction might be, the bureaucracy is reluctant to buy into the vision because it typically devalues what they can bring to the table.

Shareholders are the smartest bureaucrats, though. They put no skin into the game, and expect to take plenty out in profit on the backs of others. If they crush all of humanity into smithereens in the meantime, then so be it. Their profit is all that matters.

Automotive retail is changing drastically. Asbury has a way to go because it has sound business models which have given it presence in major markets that are strong in this competitive space. However, if the corporation continues to rely solely upon the legacies of the men who worked hard to build the names Asbury has bought for success, then they stand to jeopardize their fortunes as much as any player of the buyer of the shares.

Edgar Casey

January 23rd, 2010
12:19 pm


Unfortunately Asbury is like a large cruise ship it can’t turn on a dime as it approaches the iceburg. Smaller family dealerships are like speed boats which can maneuver quickly as the conditions change. They do this through the vision and the passion of their people, while realizing that customer is the heart of their business.

Because Asbury is large and the real ownership is in the investors and not the people that work there, the politics and the greed will continue as the customers and the employees begin to see what really is behind the curtain and go elsewhere. Asbury may have purchased names like “Nalley”, “Coggin”, “David McDavid” and others, but they did not get the ownership of the passion that made those previous businesses successful. Asbury is about ROI (return on investment), not people. They may give lip service to happy employees and customer service but that is not their goal.


August 13th, 2010
8:39 am

The whole mindset of the Americans about cars and other consumer items have totally changed.
It used to be a mentality in buying cars; how we can impress the next door neighbour with our
expensive and flashy cars. I know a person, bought an expensive German car, but hardly used
many of the buttons inside the car because he does’t know much about the functions of the car,
other than simply driving. We all got into this trouble by jumping into the fire through impulse.

Now, everybody is interested to be debt free and drive old cars which can take us from x place to y
place with the least expenditure. The car business in the U.S. will suffer greatly like the real
estate down fall, because our standard of living is plummeting very fast.