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A smooth transition

The next generation of DeBoers takes on more responsibility at Lithia Motors

When Lithia Motors announced new executive titles for Dick Heimann and Bryan DeBoer earlier this month, it was little more than public acknowledgment of a transition begun two years earlier.

Who leads a publicly traded company is taken seriously on Wall Street, so the matter of succession has been close to Lithia Chairman and Chief Executive Officer Sid DeBoer's heart.

I'm a 10-year person, DeBoer says. When we first went public (in December 1996), Dick and I set in motion the things we needed to do to train the next generation.

The next generation officially stepped forward Jan. 9 when Bryan DeBoer was named president and chief operating officer, while Heimann, the longtime No. 2 man in the organization, was named president of corporate affairs.

Sid DeBoer, 62, took over the family's Chrysler dealership in 1968 and moved it to Medford from Ashland in 1970, the year Heimann joined as sales manager. Heimann became president of the company in 1997.

— DeBoer's philosophy has been to expand the company so there is plenty of opportunity for all the key players.

That way no one feels like something is being taken away from them when someone is promoted, the CEO says.

Although he's not ready to retire or step aside, DeBoer has long thought about how his sons did or didn't fit into the auto retailer's plans.

When Jeff, Bryan and Mark DeBoer were teenagers, their dad told them not to plan on working for Lithia.

I was 15 or 16 when he told us none of us could be in the car business ' ever, recalls Bryan DeBoer. I think part of it was to get us to go to college and mature.

It was a shrewd move on Sid DeBoer's part because it encouraged his sons to develop skills that might otherwise remain latent.

Today, two of the three hold senior executive roles and the third oversees the company's construction and real estate projects.

Jeff DeBoer, 41, has been senior vice president and chief financial officer since March 2000.

Bryan DeBoer, 39, was named chief operating officer in 2003 and retained that title as well after being named president.

Mark DeBoer, 36, is now vice president of real estate.

A lot of times family business people are there without having been out on their own, says Jeff DeBoer. All of us demonstrated we can do things on our own very capably.

The eldest son had a gift for numbers and earned a master's in business administration from the London Business School in 1994, with a specialty in finance and investment management. He was a credit officer for Fuji Bank, Ltd. in Tokyo from 1988 to 1992 and became an equity analyst and sector fund manager for Fidelity Investment Japan from 1994 to 1997.

I didn't always plan to come back, Jeff DeBoer says. Lithia was a private company when I grew up and there wasn't a big need for my skills at Lithia. It was all about independence and success on my own in Japan, and I was doing well all on my own.

When the company went public that changed. All of a sudden, there was a need for someone used to dealing with investors and investment banking.

I had an opportunity to add value and fit into Lithia, he says.

Bryan DeBoer was a double major at Southern Oregon University, in marketing and technology. He was ready to move out of the area, he says, when his father decided his skills might be useful to the company.

I put him to work for Dick Heimann, says Sid DeBoer.

Heimann shepherded his apprentice through a variety of roles, from finance manager and general sales manager at the dealership level to becoming general manager of the Medford Honda Isuzu Suzuki Pontiac Volkswagen dealership.

Normally, it's not healthy when a father tutors their own adult children, Heimann says. Sid's sons all called me Uncle Dick. It's easier to take something from an uncle than parents. On that basis, there was immediate trust because he knew there was no hidden agenda. He was a significant owner of the company and never felt threatened.

In 1996, Bryan DeBoer became senior vice president of mergers and acquisitions as well as operations. Among the initiatives he's worked on recently is a &

36;1.5 million project to get a computer on every sales person's desk to improve customer service.

Bryan's people skills have really, really improved, Heimann says. He's got a lot of charm and he's made some very good friends, influential friends and those people help grow you also.

The middle son is now the heir apparent to leading the company, a decision with which the older brother is comfortable.

I've never run an automobile store and never worked in a car dealership, Jeff DeBoer says. It's something I always understood, I wouldn't run the company. Sid has laid the plans very clearly; if I had problems with it I would've said something a long time ago. If there weren't clear lines of demarcation, there could have been problems. But we all have our own areas of expertise. As chief financial officer, I have quite a bit of responsibility and there is no shortage of challenges for me.

Mark DeBoer was a golf professional for a while before starting his own construction company. MD Construction has handled Lithia Motors' remodels and new construction throughout the West. Recently, the decision was made to move the construction inside the corporate structure.

Sid DeBoer is still in charge and considers himself the senior strategic planner, who takes part in every major decision.

The main thing I do is say 'no' to all the things we shouldn't do, the CEO says. I become the skeptic and develop the vision of what the company should do.

A smooth transition "business@mailtribune.com.

Dick Heimann continues in company with new role

Dick Heimann may have graduated Lithia Motors' future chief executive from his personal school of auto retailing, but the longtime car dealer still has plenty of irons in the fire.

Heimann, 62, is now president of corporate affairs in charge of manufacturer relations, legal affairs and special projects. He also remains on the company's board.

The title fits what Dick has been doing all along perfectly, says Lithia Chairman and Chief Executive Officer Sid DeBoer. I hope people don't think Dick's retiring, because he's not.

Heimann joined Lithia in 1970 after a three-year stint as a district manager for Chrysler Corporation.

Heimann mentored DeBoer's son Bryan from the time the newly named company president joined the company in 1989.

Sid and I have had a succession plan in place for the last five years, says Heimann. It's not something decided a week ago or over dinner. It was a plan we all felt comfortable with. If someone can learn the easier way rather than the hard way, the whole company will benefit.

Heimann's stamp on the company has been continuity: Top managers rarely leave the organization.

It isn't that one of our top executives couldn't get a job somewhere else and make as much or more money, he says. They don't need Dick or Sid but they want to be here.

Heimann says the most significant change is that he no longer closely follows middle management.

As the company grows, there are plenty of other details to tend to, such as legal issues.

Someone has to be there to guard the gates to make sure we do things right and to defend the company, Heimann says.

To sustain growth, the company will have to guard its relationships with manufacturers as well.

We have to be in position to have relationships with each and every manufacturer that looks at Lithia as a true partner and to buy the very best franchises.

About Lithia Motors

Lithia Motors Inc. operates 94 stores and 186 franchises in 12 Western states and over the Internet. It had revenues of &

36;2.7 billion in 2004.

The company is scheduled to report its fourth-quarter 2005 earnings Feb. 8. Through the first three quarters of 2005, revenues were more than &

36;2.3 billion.

It employs nearly 6,000 people, including several hundred at its Medford headquarters.

From left, Sid DeBoer, sons Bryan, Jeff and Mark DeBoer and Dick Heimann head the $2.7 billion company Lithia Motors Inc., headquartered in Medford. Mail Tribune / Roy Musitelli - Mail Tribune Roy Musitelli