Rainy day fund buoys dealerships' employees

A rainy day fund has helped ease the financial worries of employees at Bill Penney Toyota and Bill Penney Mitsubishi during the coronavirus outbreak.

For the past seven years that Ryan Hensley has been CFO of the Huntsville, Ala., dealerships, he has transferred 50 to 60 percent of the previous month's net profit into the fund each month.

That foresight means that, despite a 30 percent drop in sales last month, the dealerships' 200 employees will receive all or most of their pay while many competitors are laying off staff. The fund will cover employees' compensation through April, Hensley said.

Bill Penney Toyota even advertised a service technician opening on its Facebook page March 25: "With all the layoffs, furloughs, unemployment or just no business, Bill Penney Toyota is always looking for top talent," the post said. "We're still open and doing business!!"

On March 23, the stores started scheduling employees for three days of work alternating with three days off, but hourly employees were still paid for at least 32 hours and salaried employees received their full compensation.

"We wanted to take away some of the anxiety. That's why we rolled that out when we did," Hensley said. "We think it's better than what the government would pay if you had to furlough."

As of Thursday, April 2, Alabama had not ordered residents to shelter in place, but public schools are closed for the rest of the academic year. Management restructured the schedule to give employees more time with their families without worrying about missing a paycheck. Plus, operating with half of the staff "gives everybody a chance to sell a car and to fix a car," even when business is slow, Hensley said.

When the dealerships restructured the schedule, the coronavirus had not hit Alabama as hard as it had many other states. There were 167 cases statewide then, according to the Alabama Department of Health. As of Wednesday, April 1, more than 1,300 residents had contracted the virus.

In the past year, Hensley had been especially diligent about contributing to the savings fund as the dealership prepared to build a 65,000-square-foot body shop.

But now, "we just feel like our 200 employees are more important than starting construction. We've got the building. We've got our architecture plans," he said.

"We'd rather take the money from savings and pay our employees than get to work on that. The backbone of the store is the employees. That's what makes it go."

The two dealerships, which sold about 5,000 new and used vehicles in 2019, previously have directed cash from the fund toward tax payments, but they've never had to rely on it to cope with a crisis such as the coronavirus pandemic.

When the fund starts to run dry, management will consider other options. But for now, Hensley said, "we've got the money and we're going to … hang onto our employees."