Two of Utah's largest automobile dealerships, Garff Enterprises and Rick Warner Auto, said Friday they will merge their operations into one large enterprise that they say will control 15 percent of the Utah market.
A news conference was scheduled Friday to officially announce the merger agreement that will bring 22 vehicle franchises under the new megadealership.No decision has been made on the name of the new company, which will employ some 1,500 people. The deal is expected to be completed in 90 days.
Robert Garff will be chairman of the board of directors, and Ray Noorda, founder of computer company Novell Inc., will be vice chairman. Noorda bought most of the Rick Warner dealerships from Warner several years ago. Bradley Eichers will be chief operations officer.
The new operating group also will accommodate minority ownership interests from specific franchise operations.
The deal does not include the Warner Super Ford Store or War-ner Truckland, both of which are owned by Bart Warner, Rick Warner's son.
The deal has been in negotiations for months, said Garff, and it is only coincidence that it comes just weeks after the death of his father, Ken Garff, the founder of the Garff companies.
Craig Bickmore, executive director of the Utah Automobile Dealers Association, said he hadn't heard of the merger until contacted by the Deseret News. But he expects it will be good for the state's auto industry.
"I'm a little surprised to hear of it, but they are both great dealers and highly respected in the industry. I wish them well," Bickmore said.
Bickmore said the UADA doesn't keep statistics on the size of Utah auto dealers so he could not confirm their claim that they will control 15 percent of the Utah market. But he said he suspects the merger will make the Garff/
Warner organization the largest in the state.
"They are certainly two of the megadealers, along with Larry (Miller) and (Jerry) Seiner," he said.
Bickmore speculated Larry Miller's dealerships outside Utah likely makes it the largest overall, but Garff/Warner should hold that title in-state.
That's true, according to Maxis Research, a Salt Lake-based automotive market research company that does work for national clients. Maxis' figures indicate the merger catapults the new dealership into the top spot in Utah.
Steve Clark, research manager for Maxis, said figures compiled for 1996 show Larry Miller was the top dealer last year with 7 percent of the market. Warner was second with 6 percent, Garff was third with 5 percent and Seiner was fourth with 3 percent.
According to those figures, the combined Garff/Warner dealerships would control 11 percent, placing it comfortably in first place but well short of the claimed 15 percent.
Friday's announcement continues a trend seen throughout the nation of consolidation of auto franchises into fewer but larger dealerships.
"That's certainly the trend," said Bickmore, "and I don't see it ending. Is it good for the market? I don't know."
Robert Garff said the decision to merge was made "to more effectively compete in a dramatically changing marketplace. Customers will be better cared for with faster services, expanded options and the ability to handle a broad variety of automotive needs."
Garff added he was "thrilled with the opportunity this will present to our customers for expanded sales and service."
Eichers termed the merger "the perfect marriage of two great names coming together as one. Our locations, franchises and business philosophies are very compatible, and our goal is to not only be smarter, better and different, but to be the leading automobile retailer in Utah."