"Hear Every Point of View": An Interview with Atlanta Fed Board Chair Michael Jackson
Michael Jackson. Photo by David Fine
Michael Jackson, who is chairman, president, and chief executive officer of Fort Lauderdale, Florida-based AutoNation Inc., is also chairman of the Atlanta Fed's board of directors. In this interview, he discusses his management philosophy, what persuaded him to join the Bank's board of directors, and what he regards as the central bank's most important asset.
Charles Davidson: Why were you interested in joining the Atlanta Fed's board?
Michael Jackson: I have tremendous admiration for the Federal Reserve. It's an organization that's trying to get it right for the American people, American society, and the American economy. So for me to contribute some of my time as public service, I'm honored and thrilled to do it.
Davidson: What's your leadership style, and how did it come to be?
Jackson: My bedrock, secret sauce is I run a participatory management system. It's not a consensus system. I like bright, accomplished people to be in my executive circle. I like broad-minded people who are open to other points of view. And then we have a very vibrant discussion on any issue, and I expect everyone to participate. I'm responsible for who's at the table and the quality of the discussion. I'm responsible to drive it to a decision.
The first thing you do is eliminate mistakes. So when I put a particularly awful idea on the table, everybody says, "That's the stupidest idea we've ever heard." And I say, "You're right." So if I had made a unilateral decision, I would've made a stupid decision. But it's hard for eight people to all agree to do something stupid.
Davidson: How did you come to this approach?
Jackson: I guess I was never a know-it-all. I always enjoyed working with smart, talented people. And if they were smarter than me, all the better. I never viewed that as a threat.
Davidson: You worked as a mechanic at a car dealership early on. What about the car business intrigued you?
Jackson: I graduated with a degree in political science and moved to Washington, DC. I had an old Mercedes that broke down, and I had no money to fix it. I became a mechanic. Lo and behold, I had an aptitude for it. My father was a mechanical engineer, and I grew up holding the flashlight when he fixed stuff.
And I liked the business. I came up on the technical side of the business. Then I saw sales and marketing, and I figured that's where I belong. Then at age 29, I put a deal together to buy the dealership where I started as an apprentice mechanic.
Davidson: Your job gives you an interesting view of economic activity. Can you talk about how that adds value to what you bring to the Atlanta Fed's board?
Jackson: We are originating the financing for 85 percent of our customers. So we see their credit applications, and we work with 150 financial institutions. We see the reaction of the financial institutions, we see the parameters of what is approved and not approved. We see the payment records and credit profile of everyone.
We are from coast to coast. So it's a tremendous window into what the American consumer is thinking. For instance, in 2006–07 we had customers telling us they wanted to buy a car or two for their new house. We looked at the credit app and said you're not going to get approved. And they would say, "What do you mean? I just bought a house with no credit app and no down payment."
So this was a huge red flag to us that something was out of whack. And it was happening every day. We had certain markets where it was 50 percent of the people who walked in—couldn't afford a house, couldn't afford a car. Got the house; we said no on the car.
Davidson: Outside the current economy, what other challenges do you see facing the Atlanta Fed and the Federal Reserve System?
Jackson: The Fed needs to be vigilant on its independence. When you have a crisis, you need institutions that can make decisions without the political process crippling it.
Davidson: Why is that?
Jackson: Look at 2008, '09, '10, '11. Decisions and programs the Federal Reserve made and put in place were beyond any contingency plan. They needed to be done quickly, with tremendous credibility. I think, if you strip it all away, credibility is the power of the Federal Reserve. That is what moves the markets here and around the world. That is your currency.
They had to make many innovative, ambitious steps that only succeeded because it was the Federal Reserve, and people looked at it and said, "They really know what they're doing." The American economy really was staring into the abyss.
Independence is essential so that in crises you can make decisions, and you're not whipsawed according to political whims. It is fact-based, informed by data combined with input from everyday people living in the economy.
Davidson: How do you see ride-sharing services and technologies like self-driving cars affecting the auto industry?
Jackson: There'll be more change in the next 10 to 20 years than there's been in the last 100 years. You have a convergence of technologies—electrification, autonomous cars, the connected car, and this sharing concept—that are all at inflection points at the same time. If you combine them—and there is an interdependence among them—the industry for the first time in its history is going to be able to comprehensively address its two major societal costs, namely fatalities and the quality of the air.
Now, it is going to take longer than what I read in newspapers because the economics on each of those technologies is upside down and will be for the next 10 years. By 2030, maybe 10 percent of vehicles sold will be some kind of electric, autonomous vehicle that goes into sharing usage.