When Katrina made landfall near New Orleans in August 2005, many Group 1 Automotive staffers in the region were still receiving paper paychecks. This meant they couldn't get paid in the turbulent aftermath of one of the most destructive natural disasters in U.S. history. Group 1 tried wiring them money but realized it needed a more modern payment system.
When disaster strikes, experience helps
The dealership group has since moved all of its employees to electronic payments to ensure displaced or stranded workers don't have one more thing to worry about.
It's just one of the lessons Houston-based Group 1 learned from Hurricane Katrina's chaos that helped it prepare better for Harvey, the latest weather disaster to strike the Gulf Coast, said Pete DeLongchamps, the company's vice president of manufacturer relations, financial services and public affairs.
Jeff DykeExecutive vice president of operations, Sonic Automotive
"Having a risk team makes a huge difference for us, and they are leading the way for us on the ground in Houston."
"We had a playbook for what happens for when a hurricane is coming," DeLongchamps told Automotive News last week. "We've utilized that in Florida and we sprung into action last week with all of the protocols that you have to do at the operational and corporate level to be ready for it."
Other big retailers are also counting on well-honed disaster protocols and risk-management efforts to get their stores and their employees through the worst of Harvey, which spread destruction along the Texas Gulf Coast and flooded large sections of the Houston area last week before moving on to Louisiana.
Experience has taught them well.
"We have had this situation before, and we have to make sure there is a coordinated effort to make sure everything gets there," said Tony Pordon, executive vice president of investor relations and corporate development at Penske Automotive Group. "We're in the process of making sure we can do that."
Penske, which has two Honda stores and a collision center in Houston that are affected, was mobilizing teams last week to help its nearly 240 employees in Houston who need it, Pordon said.
DeLongchamps said Group 1 has an emergency response team composed of many of its executives and risk management staffers.
Group 1 begins discussions when it learns a storm is about to form, and DeLongchamps said preparations were moving "full speed ahead" two days before Harvey began to wreak havoc on the night of Aug. 25. Leading up to the storm, the company held conference calls with general managers to talk about the storm response.
He said stores were moving inventory to the highest ground on their properties before Harvey hit. Group 1 has 28 stores in the Houston area.
At AutoNation, which has 18 stores in Houston, planning was under way four days before the storm hit, under a protocol that involves monitoring the early phases of a storm and moving into action.
Employees who weren't essential to closing and locking up stores were sent home early on Aug. 25. The company didn't want anyone in the stores when Harvey's high wind and heavy rain began moving through the region.
CEO Mike Jackson "made the decision [on Aug. 24] that all preparations would go into full circle, which means making sure our employees are safe. Making sure our stores are battened down, making sure we can protect whatever inventory the best [we] can," AutoNation CMO Marc Cannon told Automotive News. "Our stores were shut tightly on [Aug. 25] in Corpus Christi and Houston."
AutoNation, whose stores are concentrated in the South, has "developed some expertise on these types of things because obviously, this is not the first one we've been through," Cannon said. "We've had storms in Florida and hurricanes in other spots, so we have a plan that we mobilize."
Cannon said the company reviews and updates its action plans each year. He recommends that stores start preparations as soon as they can. This allows staffers to get their personal affairs in order as well as the dealership's.
Sonic Automotive, which has 19 dealerships in Houston with 1,500 to 2,000 employees, is also applying lessons learned from past crises. The dealership group started a risk management department 10 years ago, said Jeff Dyke, Sonic's executive vice president of operations.
The department prepares and handles basically any catastrophe from hailstorms to hurricanes to tornadoes, and "anything when it comes to risk in a dealership" from how lifts are inspected to various operations, Dyke told Automotive News. "Having a risk team makes a huge difference for us, and they are leading the way for us on the ground in Houston."
For instance, Sonic's employees put more expensive vehicles on lifts to protect them from water damage, he said. Likewise, computers were bagged and stored high up on desks and computer systems were powered down, but some store lights were left on so if Dyke and his team could get near a store, they could see if power was on.
Dyke said Sonic has cameras installed in most of its Houston stores, "so we have live video footage. Even if we can't get there, we can see what's going on and we can stop looters and talk them down if they're on the lot and immediately call the police." Sonic started installing the cameras about seven years ago and uses a vendor to administer and monitor them.
"Houston's been hit with two 500-year storms," Dyke said. "We had Allison that came and smacked the city as well, so we've learned from all of this over time," said Dyke. "We could not have been more prepared. I'm so proud of our team. While we can't stop the storm, we could bring more sunny skies for our team because of how prepared we were."
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