Struggling GM plans beefed-up effort to boost minority-owned dealerships

December 12, 1990|By Kim Clark

Although slumping car sales are squeezing many existing dealerships out of business, the General Motors Corp. said yesterday it would step up its efforts to increase the number of minority-owned dealerships.

The nation's largest carmaker said it would like to increase the percentage of minority-owned GM dealerships to 3 percent from 2 percent by 1993 by boosting its special training and financial-assistance programs.

GM said it would beef up its year-long training school for minority dealers and provide more money to help reduce the cash requirements needed for a dealership.

With a GM loan, minority business people can open a dealership for as little as $80,000, less than 10 percent of the $1 million sometimes required of prospective dealerships.

GM's new program targets cities with large minority populations, but GM officials no specific cities have been chosen.

The move comes at the end of a year the National Automobile Dealers Association described as "horrible."

Association economist Tom Webb said profitability for car dealers will be about half the typical level in 1990 and that the total number of dealers has dropped by 400, to 24,100, this year.

Baltimore-area GM dealers questioned the timing of the move, saying that newcomers to the industry probably will find it difficult to succeed when established businesses are struggling.

"Things are very tight. It is very tough to sell cars in this market," said Stan Walker, general manager of Seidel Chevrolet in Lanham, one of the few minority-owned dealerships in Maryland.

Chuck Boyle, owner of Boyle Buick in Harford County, said dealers realize that there ought to be more minority-owned dealerships but think the total number of dealers probably ought to be allowed to continue to decline.

"I can understand concern for wanting increased minority representation," Mr. Boyle said.

But some dealers, in the belief that there is not enough business to go around, want to start lobbying GM not to reopen closed dealerships, he said.

Fred Rasheed, economic-development director for the National Association for the Advancement of Colored People, also questioned the timing of the move, saying that he would prefer to see GM support the minorities who are already in the business.

"This seems to be the absolutely worst time to bring any dealers in," Mr. Rasheed said.

"When the auto industry is booming, I don't see this big rush to bring in minority dealers. It seems to be the same old story. When the economy is going bad and everyone else is bailing out . . . there is an effort to identify minority dealers."

Harold Jackson, a spokesman for GM, said the company was concerned by a recent decline in the number of minority-owned GM dealerships, from a high of 208 in 1989 to 192 this year, and wanted to boost the financial and managerial assistance it gives to existing minority dealers.

GM, which has a smaller percentage of minority dealers than Ford and Chrysler, said yesterday's announcement was made despite, not because of, the weak economy.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.