2008 and 2009 were to put it mildly difficult years for the automotive industry. Both General Motors and Chrysler depended on unprecedented levels of
government intervention to stay viable. Meanwhile thousands of dealerships around the country were forced to close their doors for good. This challenging
external environment threw some serious punches at CarMax.
In the midst of these challenging times CarMax CEO Tom Folliard communicated optimistically and nondefensively with shareholders and employees alike. His
blend of realistic optimism communicated his vision of the path through the difficult challenges in the industry. He set out an active response to help
position CarMax for the economic rebound to come. Several actions helped the company endure the tough economy while making it stronger for the future. For
example by cutting $100 per vehicle in reconditioning costs CarMax would save $30 million annually on the 300000 or more cars they sell. And while CarMax
did have to cut jobs to endure the very tough economy much of the reduction in staffing came through attrition and labor-hour savings. Those who lost their
jobs permanently were given a generous severance package of 4 to 26 weeks%u2019 pay. That sends a message to those who stay as well as those who must
leave.
How CarMax treats employees in difficult times is one element of its internal business integrity a trait that the company exhibits in its dealing in the
marketplace and with customer. For example the Better Business Bureau awarded CarMax its Torch Award for Marketplace Integrity in seven markets: Virginia;
Chicago and Northern Illinois; Louisville southern Indiana and Western Kentucky; greater Maryland; central Ohio; greater Houston and south Texas; and metro
Atlanta Athens and northeast Georgia. These awards are presented regionally to companies that practice fair honest and ethical business practices.
In addition CarMax launched a new web-based search tool to provide better service to potential customers. The Advanced Search feature allows customers to
enter any combination of makes features colors and more can be entered into one search field with an update instantly available. This flexible
full-featured online vehicle search makes the process quick and easy for customers. Successfully meeting the challenge of difficult times requires optimism
empathy for employees ethics and integrity in the marketplace. That is the CarMax way.
Respond to the following short essay questions.