The largest automotive-dealership group in Winnipeg got a little bigger this week with the addition of one of the best-known shops in town.
The Birchwood Automotive Group has purchased Bob Kozminski's Keystone Ford on Regent Avenue, boosting its total of stand-alone dealerships in Winnipeg to 11.
No price was disclosed, but the deal also includes Kozminski and his son, Matthew, buying a 50 per cent stake in Birchwood's Jaguar Land Rover Volvo Winnipeg location at the Pointe West Auto Park.
Steve Chipman, president and CEO of Birchwood, said purchasing Keystone Ford benefits his company in a number of ways. First, it gives Birchwood a Ford dealership for the first time in nearly a decade. (It gave up its Ford outlet in 2003 when the manufacturer consolidated a number of brands.) Second, it also expands its footprint on Regent as Keystone is adjacent to Birchwood Kia, Birchwood's collision centre and across the street from its Honda outlet.
"We're excited and proud to be associated with Ford again," Chipman said. "It gives all our employees the opportunity to grow and do more. There will be some synergies there, some operational efficiencies."
On the other side of the bargaining table, Kozminski, 66, said after 40 years in the automobile business it was time to finally step back.
"Over the last few years, many people have talked to me about selling. I kept saying I wasn't ready. Last fall, when I looked at the (upcoming) winter, when I usually go down south, I decided I didn't want to come back. I wanted to stay in Florida. That tells you it's time to sell," he said.
"I'm 66 years old, I've still got my health, the Ford Motor Company is at the top of its game with the best product we've ever had and I had a terrific opportunity to sell to a quality organization that was going to look after my customers and employees extremely well."
Indeed, Chipman said he expects virtually all Keystone's 110 employees to stay on with the new ownership group.
Now that the deal for the newly christened Birchwood Keystone Ford has closed, Chipman will turn his attention to further expansion. His goal is to have 15 stand-alone dealerships by 2015.
"We're in growth mode. We'd like to grow and expand our business. We've always been pretty loyal to the Winnipeg market. We enjoy the city and what it brings to us and we've always believed we should invest in our own city," he said.
If opportunities don't present themselves within the Perimeter Highway, Chipman said he will look elsewhere in the province.
"Our first choice is in Winnipeg and in Manitoba is our next choice. We've looked elsewhere but it hasn't made any financial sense to us," he said.
Chipman said Birchwood is remodelling its Nissan Infiniti dealership in the Pointe West Auto Park and he hopes to begin the expansion of its BMW Mini dealership later this year.
While it might appear as if Kozminski is looking to stay in the game by buying into the Jaguar Land Rover Volvo dealership, he said that's not the case. Matthew Kozminski has already been appointed general manager and he is scheduled to buy out his parents' share within the next five years.
"I'll be on the board and advising but I won't be active at all," Kozminski said.
The automotive landscape has changed substantially since the Ford Taurus ruled the road when Bob Kozminski got into the dealership business more than a quarter-century ago.
First, the average transaction during his first year of ownership in 1986 was $18,000. Today, it has more than doubled to nearly $38,000.
Second, the engines in today's vehicles are nothing like the ones students used to work on in high school shops class. They don't have fuel pumps anymore but they do have electronic fuel injection.
"Our technicians today are brain surgeons. They're not mechanics turning wrenches. They spend a lot of time on their computers doing diagnostic work," Kozminski said.