Berkshire Expected to Keep Van Tuyl’s Dealership Business Model

Jeff Rachor foresees no big business-model changes after the 79-store Van Tuyl Automotive dealership group becomes part of Warren Buffett’s publicly owned Berkshire Hathaway investment company.

Rachor is president of Van Tuyl, the nation’s largest privately owned dealer group and No.6 on the WardsAuto Megadealer 100. He becomes CEO at newly created Berkshire Hathaway Automotive when the deal is finalized.

That’s expected to occur in 2015’s first quarter. Rachor remains optimistic it could be done by mid-January.

“The transaction price has not been disclosed, he tells WardsAuto. “Any numbers reported in the media are pure speculation.” Forbes has estimated the deal’s value at $2.9 billion.

Rachor (pronounced Rocker) joined Van Tuyl in 2010, sharing top management duties with CEO Larry Van Tuyl. Rachor had worked as an executive at another megadealer, Sonic Automotive.  

Rachor describes synergy between the Van Tuyl and Berkshire business philosophies.

“We’re delighted we will be able to preserve the Van Tuyl business model founded more than 60 years ago,” he says.

That model includes dealerships run by managing partners who know their communities and have a vested financial interest in their stores.

“Berkshire Hathaway and Van Tuyl have closely aligned goals and values,” Rachor says. “We’re so grateful Mr. Van Tuyl found such a win-win solution.”

He praises Berkshire’s track record of buying successful companies, allowing management opportunities and continuing past practices that work.

“The secret sauce (of Van Tuyl) is the managing partners of our dealerships, and Warren Buffett recognizes the value of that arrangement and is committed to keeping the model in place,” Rachor says.

Larry Van Tuyl becomes chairman of Berkshire Hathaway Automotive. The Van Tuyl group was started by his late father Cecil Van Tuyl, who became a dealer in 1955, starting with a Chevrolet store in Kansas City.

“Cecil was a rare leader and icon in the auto industry,” Rachor says.

He expects Berkshire Automotive to buy more stores. “We anticipate we will accelerate our acquisition pace.”

He describes Van Tuyl’s some 10,000 employees as “prideful and enthusiastic” about the future.