Morrie Wagener, longtime owner of Morrie’s Automotive Group, is selling his business of 11 dealerships to the company’s chief executive and a New York-based investment firm.
Karl Schmidt, 52, the CEO since 2009 and Fremont Private Holdings are purchasing the auto group, body shops and the real estate in a sale expected to occur late this year or early 2016. Morrie’s does not plan to make any material changes to the staffing, management or dealerships, according to a company statement.
“The Morrie’s name will continue to be used, and Morrie’s will continue to lead the way in customer service,” Wagener said in a statement.
The purchase allows Morrie’s to add more dealerships, expand brand offerings and hire more staff.
“We love the Upper Midwest,” said Schmidt, who started with the company as an assistant used car manager in 1988. “We’re not limited to this market, but our primary focus will be the Twin Cities and Minnesota and parts of Wisconsin.”
Morrie’s was founded in 1960 by Wagener, now 78, a former auto mechanic and tinkerer who graduated from Dunwoody College of Technology. Wagener had Saab and Citroen dealerships initially under the name Morrie’s Imports and expanded with Cadillac, Lincoln, Ford, Hyundai, Mazda, Nissan and Subaru.
A Bentley, Maserati, Aston Martin luxury dealership opened in July in Golden Valley. Other dealerships are located in Minnetonka, Brooklyn Park, St. Louis Park, Inver Grove Heights, Buffalo and Chippewa Falls, Wis.
Morrie’s was one of the leaders of the now common “no hassle, no negotiation” method of selling vehicles, said Scott Lambert, executive vice president of the Minnesota Auto Dealers Association.
“It was one of the changes that everyone thought would never work, and now so many dealers have it,” he said.
Wagener, Schmidt and their ad agency enhanced the customer-centric focus by introducing a “buy happy” enrollment with free oil changes, carwashes and a lifetime powertrain warranty for new car buyers. The goal is consistency among the brands and dealerships so that customers who cross brands, such as moving from Ford to Chevrolet, have similar experiences.
The company, which expects to sell 26,000 cars and trucks this year, resulting in $650 million to $700 million in sales, now employs 850 people full time.
This is the first time that Fremont Private Holdings has invested in the car business, although the investment firm has been considering it for several years.
“They’re in it to learn, not teach,” Lambert said.
Fremont typically makes initial investments of $25 million to $100 million, according to the company’s website. Schmidt said Fremont is a significant investor that is likely to become the majority investor.