"Bill's expertise is more aligned with building a platform," Antony said in March. "And at this time, the more immediate need is to build a sustainable foundation with the U.S. assets we currently own that can withstand the economic climate over the next few years."
Darvish was hired to be a "hands-on operator," Antony told analysts. He said she moved to Chicago and would be in the stores daily until they were profitable. He praised her experience at DARCARS and her ability to maximize store operations.
Darvish, in that March call, told analysts she was focused on renegotiating contracts with vendors and partners, including floorplan lenders and finance and insurance companies.
AutoCanada, which operates 66 franchises, in March 2018 said it would spend $86 million to buy the Grossinger stores. But in its first-quarter 2018 earnings released in May, the company disclosed the purchase price was higher, at $105.6 million. The deal included about $7.8 million in land and buildings and gave the company its first Toyota, Honda, Lincoln and Volvo stores.
Former AutoCanada CFO Raj Juneja in the March 2019 call told analysts that the Grossinger dealership group was profitable on a whole before AutoCanada bought it, though some stores weren't. He said that after the purchase, the stores' "expense structure changed," and "that's become the issue."
Grossinger Auto ranked No. 95 on Automotive News' 2016 list of the top 150 dealership groups based in the U.S. — its last year on the list —based on 10,733 new-vehicle retail sales in 2015.
AutoCanada's U.S. management changes are only part of the executive shuffle.
Shortly after the Grossinger deal was announced, AutoCanada CEO Steven Landry stepped down into an advisory role, COO Mark Warsaba resigned, and AutoCanada overhauled its board following a strategic review initiated at the urging of an activist investor. AutoCanada also named a new president in June and has gone through two CFOs; a search continues for a new finance chief.
Last year, U.S. operating expenses exceeded gross profit, for a U.S. operating loss of $7.7 million. That included $1.5 million in management transition costs.
First-quarter results weren't better, as the U.S. unit posted an operating loss of $5.4 million. The struggles in the U.S. were a drag on the company, which posted a net loss in the three-month period.
Antony, in the first-quarter earnings call this month, said Darvish had completed an evaluation of the U.S. dealerships and put together a plan centered on cutting expenses and growing revenue.