Penske dealerships slammed by hurricanes

Roger Penske

Penske Automotive Group Inc. estimates that storm-related losses, expenses and the cost of business interruptions will result in a $6 million pretax profit decline in the third quarter, said Tony Pordon, Penske's executive vice president of investor relations.

Hurricanes Harvey, Irma and Maria hit the operations of 19 dealerships and three collision centers in Texas, Florida, Georgia and Puerto Rico, which together comprise about 9 percent of the auto retailer's first-half revenue, the company said in a statement released Thursday.

But "this isn't about business," it's about people, Pordon told Automotive News.

Bloomfield Hills-based Penske, the nation's second-largest new-vehicle retailer, employs 429 people at its seven stores in Puerto Rico and "every one of our associates in Puerto Rico have been impacted. We can't even reach them all" to check on their welfare, Pordon said.

In the statement, Chairman Roger Penske said: "We are directly assisting those employees who suffered storm-related damages and have paid employees who were unable to work because of these hurricanes.

"The efforts of our employees in preparing our dealerships for the storms in the affected areas prevented significant losses and I thank them for their outstanding efforts."

Hurricane Maria damaged the power grid and communication systems in Puerto Rico, forcing Penske to suspend operations at all of its dealerships there. Those stores are "expected to remain impacted for the immediate future," the statement said. Penske is still assessing the damage and will know more as basic services to the island resume, it said.

Harvey disrupted Penske's operations at its two dealerships and one collision center in Houstonfor nearly a week, Pordon said. Irma shuttered Penske's six dealerships and one collision center in Florida, also for about a week.

In Atlanta, four of Penske's dealerships and one collision center experienced a one- to two-day disruption to business.

All businesses in all three states have resumed operations, Pordon said.

Further information will be provided when the company reports its third-quarter results, Penske said.

Penske Automotive Group Inc. ranks No. 2 on Automotive News' list of the top 150 dealership groups based in the U.S., with retail sales of 249,695 new vehicles in 2016.