Lithia Layoffs, Virginia Ditches Cali EV Standards, IKEA Pays Roblox Workers

Paul J Daly: 0:00

Yo yo, is Thursday, June 6. That's some fun stuff to talk about today. I've just realized like my hats been backwards all week. It's just that kind of week Lithia layoffs, Virginia ditching EV standards and IKEA paying Roblox workers. So the people really want to know, I said that that's a real statement. So real statement, it's really happening. And we're really going to talk about it. journey,

‍Kyle Mountsier: 0:38

a journey around the unknown. You know, it's kind of the way that I would say, just

Paul J Daly: 0:42

all I can hear us frozen in my head now because I'm a dad.

Kyle Mountsier: 0:46

No, no, my so it's over. It's over for you know, this about me. I'm this guy, like, I don't know, a massive variety of music. But for some reason, like my natural brain, just takes the majority of phrases and turns them into some song

Paul J Daly: 1:06

a lot of output.

Kyle Mountsier: 1:09

The other night, my, my daughter was like, she just said airplanes. And I was like airplanes, and the night sky is just like you and me both, you know. So good. Oh, I

Paul J Daly: 1:26

was watching yesterday. So all of our breakout sessions are now live on YouTube. So you can go to our channel. So tube ASOTU dot B e.com. Or just go to YouTube and search asoto all the breakout sessions from the soda con are up. So I've been trying to like, watch them as I can. And the the session on use car acquisition with you and Bob Hollinshead and Brian Kramer. Who else was on there? There's Oh, Cho Bassam, my goodness. First of all, I've never met Bob Hollinshead. He was out there and I crossed paths we'd never spoke. And I just realized that Philly is so strong in him. It is I forgot about it. And I fell in love, like total broke crush. Oh, Baba. After I heard her just reminded me of home. And then I'm like, do he and Greg CO can know each other. If not, they need to

Kyle Mountsier: 2:17

my goodness, they would they would rage. But the session was

Paul J Daly: 2:21

unbelievable. I literally was watching it. And I looked at it. And I said out loud. In my office by myself. I was like, this is the kind of content we make. Yeah, it was some of the most in depth, insightful, meaningful functional conversation on use car acquisition and the pedigree of the dealer and the pedigree of the used car thinking about it that way. I was like, I'm so happy. Right? It

Kyle Mountsier: 2:46

was it was one of those panels, you know, like, because, you know, we do so much in the industry, and we see so much. And we talked to so many dealers and industry partners about what they're doing. You know, I we have some general insight into most topics. But that was one where, you know, it's it's, it's almost like, even getting the question out from a moderator standpoint. Because it was like, oh, and then where do we go from here? Because there was so much like, practical knowledge on how to get a really, really tight acquisition operation going believable. So yeah, you went

Paul J Daly: 3:25

he was like, I didn't realize this about him when he was like, back when I founded KBB. Ico. Right? I was like, Oh, he's like, and then why we iterated Accu trade in Canada. And when the non compete was up, came up and did it this way. Because we learned all these things. I also want to say this, if you're not, this is not content that just for, like, if you're a used car manager, or purchasing or a wholesaler, this is not this is an unbelievable opportunity to have content that's engaging, where you can learn about the other aspects of the business. And understand how the pieces fit together. It's going to be a big theme of a soda con 2025 is basically how all of these things converge to make a whole thing and understanding all the pieces and their place and why so that's going to be a big theme in 2025. And we're obviously going to ramp up to it but just had to put that out because I watched that one yesterday had it on the side. Go to a so tube ASOTU dot BiII start to watch some sessions. I was thinking man, we should like start live streaming them, and then like having the guests in the comments.

Kyle Mountsier: 4:27

Oh, that's so smart.

Paul J Daly: 4:29

I think we might do that. Okay, we got to talk about some news today. Are we gonna Yeah, we'll just leave it there for right now. Oh, man. Well, I can't give you more than one thing. We're gonna have some another podcast this Otakon sessions. We'll talk about that tomorrow. But uh, so tube ASOTU dot v. All right, let's talk about some news. Lithium. Ion Lithia motors is targeting $150 million in annual savings through strategic layoffs and other employee cost reading auctions primarily focusing on us positions. It's the first we've talked about auto industry layoffs in quite a while. Yeah, obviously Lithia publicly traded company a little bit different operation than the regular franchise dealers that are locally owned. A senior director of finance, Jordan Jaramillo described the cuts as quote, very targeted rather than a broad reduction. As he said, quote, We are not announcing a mass layoff, right, like a skim percentage off the top. These are changes at the store level. And then he gave examples including taking action on underperforming General Manager. So they're really looking at leadership. The layoffs are part of a plan to eliminate a total of $250 million in annual selling general and administrative expenses SG and a additional savings will come from reducing inventory, as well as third part party service provider costs. So if you're Lithia vendor, make sure you call your people changes will include leadership adjustments at the store level, they will also be laying off get this six of their 13 communications employees. So the department's 13 people deep communications department, half of those people are going to be laid off efforts are also being made to improve store wide adoption, they put a lot of focus action on this on lithium online vehicle shopping platform driveway, saying they're looking at the adoption of driveway performance both in the US and the new department. And they're using that as the as the kind of guard or as the guide on who they're targeting for layoffs saying like, hey, we really need to adopt the platform, the people who aren't leaning into it are the people that just aren't down with what we're trying to do. So they really can't be here. 60 day plan launched in May aims to impact their financial results significantly in q3. So a lot of hard news here, a lot of insight into maybe what's happening on like a real broad scale in the big public.

Kyle Mountsier: 6:45

Yeah, but I mean, when you look at this anyone, like if you listen to even listening to we'll get there. Right? And, and his conversation about how to drive a vision, and what your desire is for a company and your go to market strategy and the way that you're, you know, communicating both the customers and employees, Brian abour, has not been shy about driveway over the last six years, and neither has the company in the way that they approach the public market, the way that they have expenses tied to it, the way that they've gone, you know, gone to market, think of like the Amazon boxes, they've not been shy about it. And so you continue to press that down across the organization. And if you have people that are resistant to the change of adopting that mentality of the sales channel, then you can't you can't keep those people on board. That's, that's any organization. So we hear this as lay off, but I hear this is mixed vision. And I mean,

Paul J Daly: 7:44

that's, that's really good. You know, the line, David Long. Many of you know, David Long, you know, he says you can't have your team in a boat when there are one or two people holding a drill, like drilling holes in the boat as you're trying to roll it. Right. And I think this is one of the challenges that all public's face, right? You have all these stores all across the country, all these general managers that have all different levels of experience and success, meaning they probably were very successful somewhere else doing things a different way. And it's hard to change for them, and they're not fully bought in. So there's probably a better fit for them somewhere else as well. I will say this, that for everyone who may be affected by this. Make sure you stay close to us reach out to us, let us know who you are. If it's not it's a list isn't like ended up being public because we always try to have find placements for the people who get laid off like this happened with room Lithia. Same thing. There are a lot of good talented people that probably just aren't a good fit for whatever the system is at this moment. But they know the industry they love the industry. Stay close to us. We will do our very best to help you find the best fit moving forward with that at

Kyle Mountsier: 8:49

that because we'd love any dealers out there the fans,

Paul J Daly: 8:52

your family always take care of the family. Speaking of taking care of the family. There's like a little ghost of Don Hall floating over my shoulder. As Virginia's Governor Glen Younkin announced the state's withdrawal from California's stringent Evie standards, citing a lack of legal obligation and insufficient consumer demand. It's nice to be talking about the customer. Oh, I heard the applause button there. Virginia initially adopted California's Evie standards in 2021. Under former governor Ralph Northam, who was a Democrat, Governor Younkin whose Republican argues the government shouldn't dictate vehicle choices advocating for less strict federal emissions rules and giving consumers choice over what vehicle they want to buy. Over 9% of vehicles sold in Virginia and 2023 were electric, reflecting weak consumer demand. The Alliance for automotive innovation they support the move. Not a surprise they're stating Californians evey standards may not suit other states due to varying consumer demand. On the other side, environmental groups and Virginia Democrats criticized the move as undemocratic and potentially illegal. Here's a quote from Governor Duncan he says Virginians deserve the freedom to choose which vehicles best fit the needs of their families and

Kyle Mountsier: 10:05

their businesses. Can you see my smile through the mic? You know what I mean? Like, I think that's what I'm asking here. This is I mean, we've been talking about this for a couple years like let consumers decide voice as a consumer, you, Nikki

Paul J Daly: 10:20

Anderson,

Kyle Mountsier: 10:21

lead, yes. The EVs are coming. You know, I love this move, because it sets a precedent for other states to decide whether they're in or out on what California is doing. And we've seen this like, oh, California, did it, we'll do it too. Especially on the on the far east coast. And I just think, you know, like, I always I always relate this to, like, imagine if Norway did everything that Spain did. Right, which is actually less distance traveled. Then Virginia to California as far as like landmass. It's a world. Yeah. Yeah. So you look at the culture, you look at the landmass, you look at the the way that the infrastructure is built, even the the terrain, the the weather, like making wholesale decisions based on another state in the union, from completely the other side of the country is almost impossible to do. And then making the financial and business decision to put that on families and businesses is somewhat crazy. So kudos to Virginia for, you know, just going, Hey, look, we're not going to stop up production. We're just not going to mandate it. No,

Paul J Daly: 11:34

Don Hall said this, the president of the Virginia Auto Dealers Association, we are pro Evie. He's like we often get painted like we're anti industry. He's like we're not we love the new technology. We want to adopt the new technology, but we want to do it in a way that consumers actually are ready for it. Right? Because it needs to be a healthy way. So yeah, thanks some good news coming out of Virginia. When the consumer wins, I think everybody wins. So it's good for us.

Kyle Mountsier: 12:02

Speaking of new people winning

Paul J Daly: 12:05

please, please.

Kyle Mountsier: 12:10

Over in Europe, we got some euros floating around because I IKEA is launching a virtual store in Roblox and will pay players 1315 euros an hour or 1480 per hour to work there. The store dubbed quote the co worker is the stores name will offer an immersive career experience. Players can create virtual homes using Ikea furniture and items. Only a limited number of players will be able to apply for paid career roles with applications open from June 3 to June 16. So you only got 10 more days if you live in the in Europe, want some extra euros in the pocket, you still do have to be 18 years or older and you do have to reside in the UK or Ireland. The the applicants will complete virtual interviews and receive a purely hourly IKEA coworker rate for their time. This is crazy. Darren Taylor IKEA is country people and culture manager said basically highlighted a unique career philosophy at IKEA emphasizing this as a part of their derece diverse career growth growth paths. He said we're excited to be the first brand to launch paid work on Roblox there are many ways to learn and grow at IKEA and that's what IKEA on Roblox is all about. Like IKEA you got career pathing and Roblox Facebook.

Paul J Daly: 13:35

Well, first of all, I mean, do you think people care about career pathing this first and foremost like IKEA is doubling down on this in Roblox very progressive in their move to do this. IKEA is just generally known for a lot of horizontal and vertical movement within the organization from people who just started as cashiers and clerks. Does that sound familiar to any other industry? We might know? And so they're leaning into this and they're obviously embracing new technology it's a great brand play. My kids love building stuff on Roblox miles. My son has been building stuff on Roblox for like eight, nine years. He doesn't anymore, but he started that way. They can build houses, they decorate their houses, and for IKEA to just realize that their product contextualise is so well to this, like, do you think then you can pick whatever you want and make your house and like that doesn't actually translate to real world when you can have the actual stuff. And then actual work that transacts actual money? I think this is just a great play from a company who historically has been incredibly innovative. They were one of the companies highlighted in Jim McKelvey his book The Innovation stack that was like one of the reasons we think about things that we think about so IKEA was doing that back then they're still doing it now. So hats off to them. Lots of learning off

Kyle Mountsier: 14:47

someone draft on that genius, genius move.

Paul J Daly: 14:51

Right everybody, you gotta Thursday, got to Thursday to do whatever you want with you get to choose you're going to do this or that whatever you do, sell some cars. Go love some people. Do you love cars and we will see you here tomorrow?

Unknown: 15:19

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