Family Succession in a Big Way
For those of you who may not know Steve Germain, his family, and the hugely successful Germain Automotive Group, I would like the opportunity to introduce them in this article.
Family Succession is by far the most difficult aspect, not just in the automobile business, but in any family business. When succession reaches the fourth generation, who are taking the family business to new milestones, it undoubtedly will make parents very proud. Steve Germain and his wife are proud parents. When Steve speaks about his wife, children, grandchildren, and the Germain Automotive Group, he exudes pride and humility.
The Germain Automotive Group roots go back two generations to a time when Steve’s grandfather was Henry Ford’s personal accountant. Henry Ford wanted to push the distribution system out and away from Dearborn. The goal was to move closer to the market and have customers take delivery closer to home. Henry Ford personally selected Warren Germain for the Mercury franchise in Columbus and then later the Lincoln franchise when the two merged.
Later, Steve’s father, Robert, set out on his own and purchased a Toyota dealership in 1973. As you can imagine, this put much tension between him and his father, Warren Germain, who was not happy about his son purchasing a foreign brand automobile dealership.
Growing up, Steve, his sister, and his two brothers all worked around their father’s car lot. “There wasn’t any succession plan in those days; my dad just wanted to make payroll on Fridays.” From early on, Steve’s vision differed from his father’s as he would set a long-term plan to strategically build a family business that could be passed on to the next generation. When he had children of his own with his college sweetheart, Steve remained very insistent; all his children would someday join him in the automobile business.
Steve and his brothers became further involved in the family business after graduating from college. As Steve tells it, “the baby boomers moved the business forward with better inventory and financial controls.” Steve and his brothers very successfully grew the enterprise to eighteen dealerships. In 2010, the Germain brothers intentionally divided the company so each could go on to develop their own family businesses to pass on to the next generation.
Today, true to his long-term plan, all of Steve’s children joined him in the family business. He affectionately refers to the fourth generation as the smarter generation. All of Steve’s children have graduated from college, as well as the NADA Dealer Academy. The eldest, Jessica, is a lawyer who ran their Honda dealership in Dublin, Ohio, for numerous years and now manages the Group’s legal efforts and OEM relationships. His son, Zak, operates their Lexus Store in Naples, Florida, and his son, Austin, runs the Jaguar Land Rover dealership in Columbus, Ohio.
As proud as Steve is to see the fourth generation getting ready to take over the family business, he also hopes he will get the opportunity to see the fifth generation join the company.
As the Germain Automotive Group example demonstrates, multiple factors are involved in successfully achieving succession plans. The upmost important aspect remains to set a long-term strategy in place and to align each players’ vision of what the future looks like. Finally, putting in place a strategy to respect each family member’s interest will ensure to achieve positive outcomes for all; because, after all, isn’t this the core nature of a family business?