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An Interview with Henry Coffeen III

Meet Henry Coffeen III. This entrepreneur’s story is one of hills and valleys. After an exceptionally successful run in the dealership world, Coffeen faced devastating obstacles. He overcame adversity and today runs a tremendously successful Texas agency.
By: Staff Writer

An Interview with Henry Coffeen III

Henry Coffeen was raised in Oklahoma City and grew up in the car business. His grandfather was an Oklahoma car dealer and his father worked in sales. However, by the time Coffeen graduated from the University of Texas in Austin, his grandfather had passed away and his family had gotten out of the business. The 80’s real estate scene was booming, so upon graduation Coffeen took a job with a real estate company – a company that promptly bounced his first check. Coffeen says he was broke and in trouble. He stared cleaning apartments to stay afloat.

After learning of Coffeen’s bad luck, his best friend’s father and the owner of a Cadillac dealership in Plano, Texas, offered Coffeen a job at his dealership. This launched Coffeen’s career path into the automotive world. Starting out in used car sales, Coffeen quickly moved through the dealership ranks, eventually becoming the sales manager at his boss’s Hyundai dealership.

Coffeen says he was lucky enough to attend a Karl Singer and Associates finance and insurance school in Dallas before Singer sold to Pat Ryan and Associates. “Some people don’t know this, but Singer and Ryan were best friends. Karl Singer’s approach was focused on sales, whereas Ryan’s focus was strictly F&I,” recalls Coffeen. He was offered a job as a trainer at the school, and stayed there for about five years. It was at the end of that time that he met Red McCombs.

“I pitched Red on our program but then he figured out a way to get me to come work for him.” Coffeen became the COO of Red McComb’s Automotive Group. By the age of 30, Coffeen was running 39 dealerships for McCombs. “McCombs was heavily in debt at that time,” recalls Coffeen, “He owned the San Antonio Spurs and the real estate market had sort of crashed. His dealerships were not making a lot of money, so it was good timing for me. I was 29 years old and I pitched him our training program – what we were able to do and how we did it. During the course of the next month, Red agreed to pretty much give me the keys to all his dealerships and let me do what I needed to do. We did a phenomenal job and soon he became the fourth largest car dealer in America, with over a billion-four in sales.”

Coffeen says this all happened in the early 90’s when publically held companies had just come on the scene. He describes his time working for McCombs as a lot of fun. “We bought a bunch of dealerships. We sold a bunch of dealerships. Then, I realized I had done all I could do for Red. He gave me equity in our management company, but he wouldn’t give me equity in the stores, which is what our deal was supposed to have been.” Coffeen says when he realized McCombs was not going to make good on their deal, he decided it was time to start his own company.

Coffeen Management Company began in 1997, offering sales management and finance and insurance training. For the first year and a half, the company did not sell any F&I products. “I would go into dealerships and would basically work for free,” says Coffeen, “What I got paid was based on a percentage of improvement in the dealership’s front and back end gross.”

Eventually, Coffeen was approached by a general agency that needed help increasing their penetration in certain dealerships. This led to the company’s first dip into the product side of the business. They began selling GE service contracts. Soon, Coffeen grew the agency to become the largest GE agency in the US. “I found that dealers did not like writing checks for training,” recalls Coffeen, “but they didn’t mind selling your products.”

The mission Coffeen Management Company was founded on was providing quality training that resulted in measurable improvement in dealership profit. “We would go into dealerships that were struggling and improve their bottom line. Our pitch was ‘we will do the training and improve your bottom line, but you have to sell all of our products – ancillary products, service contracts, and so forth.’”

Today, Coffeen Management Company is a vibrant, full service agency. They provide compliance training, sales management training, and they offer an F&I school. “We do everything,” says Coffeen, “We are one of the largest agencies in the country for Allstate. Last year we were the largest agency in the country for National Automotive Experts (NAE). We have about 22 people who work for us at Coffeen Management Company and we are nationwide, doing business coast to coast.” In addition to his role at Coffeen Management Company, Coffeen also serves as the co-chairman of the advisory board for Allstate.

Business Today

Henry Coffeen has not slowed down. Recently, he purchased a Yamaha Dealership. In 2008, he was given a Texas Honda Dealership through American Honda. He built it into a 70,000 square foot, state of the art facility, and was a Gold LEED Certified Dealer, before selling it to his partner in 2013.

What Coffeen says he dislikes most about the industry today is the perception many hold that the auto industry is a shady business to be in. “Run properly, it is a great business. I was lucky enough to be partnered with the only dealership in America to ever win the Malcom Baldrige National Quality Award, so I got to go through all their training programs and understand, from a business perspective, what it means to do things right. I learned how to run a dealership differently – to do things the right way.”

The Malcom Baldrige National Quality Award was established by Congress in 1987. It is the only formal recognition of the performance excellence of both public and private US organizations given by the President of the United States. It recognizes US companies that are built on quality management and that demonstrate outstanding performance excellence. Coffeen considers himself fortunate to have been a part of such an organization; its effect on him has been long lasting.

From an agency perspective, Coffeen says if you don’t have a full service agency today – doing all the training, compliance, monitoring, technology – you are probably going to go away. “Dealers are leaning on their agents today for their growth and to help train their managers.”

Coffeen believes the publicly held companies’ and Berkshire Hathaway’s recent involvement in the industry is a good thing for the industry. “It’s making people become students of our business instead of doing things as a knee jerk reaction, which is the way most people ran their dealerships. It has given us a little more credibility, which I’m happy about.”

Tragedy to Triumph

When he isn’t working, you might need to look up to find Coffeen; he has been flying since he was nineteen years old. Today, Coffeen says his piloting abilities make doing business all over the US that much easier. But flying hasn’t been all blue skies for Coffeen.

After ten years of flying airshows professionally, Coffeen was in a serious plane wreck. In 1998, he parachuted from his airplane as it blew up inflight during an airshow practice. He suffered from 3rd degree burns on a third of his body. The burns resulted in a year and a half of of hospital stays and rehabs. “It changed my world quite a bit. I was lucky enough to be able to go to Brooke Army Medical Center in San Antonio, which is a burn unit at a military hospital close in proximity to the accident. Nonmilitary are only admitted in emergency situations. I met a lady there who did charity work. Once I was out of the hospital, I partnered with her to cofound the Moonlight Fund, a nonprofit that provides money and support for burn survivors and their families.” And the Moonlight Fund is making a difference in many lives today, as they provide 24/7 financial, emotional, and physical assistance to burn survivors and their family members, through private donations and corporate sponsorships of their annual fundraising airshows, galas and other events. Their outreach is to veterans and private citizens alike who have sustained serious burn injuries.

As if his accident were not enough bad luck, only a month before the crash, Coffeen’s house was completely destroyed when the hundred-year flood of the Guadalupe River filled his home with 16 feet of water. “It was a rough time between losing everything to the flood and then my extended recovery from the plane accident,” says Coffeen, “I had some great dealers who stuck by me at that time.”

Fast forward to 2015 – life is good and business is booming. Today, Coffeen’s free time centers around his two kids – a 14-year-old son and a 13-year-old daughter. They live on a Texas ranch in the Fort Worth area. The ranch is a cutting horse ranch where they do breeding and training. Cutting horses are agile saddle horses trained to separate individual animals from a cattle herd.

Coffeen and his family are also regular boaters and water-skiers. “My kids grew up water skiing and they are now both ski instructors in the summer at water skiing camp.”

Advice

“We all have to be a student of the business,” says Coffeen, “If you aren’t constantly monitoring what’s going on in our industry and staying on top of it, it’s going to pass you by. With technology advancing at a crazy speed, things are happening fast right now. You have to be really focused on what’s gong on and what’s there to help so you can funnel it into something that’s going to make money.”

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One Response to “An Interview with Henry Coffeen III”

  1. Great story on how to build and maintain a successful agency. Congrats Henry!

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