Australia’s largest car dealership chain says it laid off 1,200 employees last month as an initial response to the COVID-19 pandemic and associated lockdowns.
Its 229 new car dealerships in Australia are operating as an essential service but with reduced operations, under social distancing protocols.
AP Eagers said on Thursday it was applying for the federal government’s JobKeeper assistance program in a bid to retain as many of its remaining 8,200 employees as possible, while moving to a temporary rostering arrangement across much of its business.
Its senior executives have cut their pay in half and its landlords have agreed to cut the value of rental outgoings for the next three months.
AP Eagers said the layoffs will save it $6 million a month and it is taking a number of other measures to preserve cash including deferring tax payments, reviewing advertising expenditures and freezing non-essential capital expenditures.
It has also secured an additional $122 million in financing from its automaking partners.
“We are confident these actions have established a liquidity profile that will ensure the Company can navigate through the current crisis and is well positioned should the situation worsen,” AP Eagers said.
Chief executive Martin Ward said the company had been forced to make “difficult decisions” he was proud of his people who had been “remarkably agile, responsive and resilient in the face of unprecedented adversity”.
On Thursday, AP Eagers agreed to reduce the price of Automotive Holding Group’s refrigerated logistics division from $100 million to $75 million as a means to complete the deal following fallout from the coronavirus crisis.
AP Eagers is selling the business, which it acquired when it merged with AHG last year, to Sydney-based private equity firm Anchorage Capital Partners.
At 1332 AEDT, AP Eagers shares were up 22.3 per cent to $5, still down by more than half since the start of the year.