OPINION

Thompson: Summit seeks to speed auto industry diversity

Bankole Thompson
The Detroit News

The auto industry’s apparent dwindling numbers of minority vendors and dealers is sure to be a top priority at the annual Rainbow PUSH Global Automotive Summit on Diversity next week.

The two-day gathering — Oct. 8-9 at Detroit MGM Grand Hotel — will draw top automotive executives, suppliers, dealers and government officials who are scheduled to discuss ways to strengthen and create opportunities in the auto industry for people of color.

Bill Perkins, owner of the Eastpointe-based Merollis Chevrolet dealership, has been in the industry for 40 years, 28 of which he spent purchasing dealerships.

The Rev. Jesse Jackson Sr., who founded the annual conference now in its 16th year, said: “Many of our award-winning minority companies are at an economic crossroad that is hinged on a plan for growth.”

The theme this year is “Shifting into High Gear: Commitment, Access and Accountability,” and Jackson, in prepared remarks to be given at the conference, said forging a mutually beneficial trade relationship between African-American businesses and the auto industry is today’s challenge.

“Minority companies need a short-term plan for survival and a long-term critical path to success with measurable goals, targets and timetables,” Jackson added.

He challenges the automakers for their lack of effort to increase the levels of diversity in the various levels of the industry.

“There is not a talent deficit among minority companies; there is an access and commitment deficit from auto manufacturers,” Jackson said. “It is time to shift the paradigm and hold the automotive industry accountable.”

Damon Lester, president of the National Association of Minority Automobile Dealers, said that out of 18,000 dealerships in the nation five percent are owned by minorities. That number translates into 252 African-American-owned dealerships. Hispanics and Asians are at 529 and 245, respectively.

Lester noted that before the General Motors and Chrysler bankruptcies there were 400 black dealerships, half of which went under during the financial crisis.

“Our challenges have been and continue to be access to capital. In order for us to increase our numbers we have to do more acquisitions, sustain the number of stores we currently have and continue to urge every manufacturer to incorporate diversity as a business imperative,” Lester said. “We have to come up with create ways of financing deals by utilizing private equity and forging partnerships with one another.”

Lester said his organization continues to meet with all manufacturers regarding their diversity initiatives.

“We urge them to come up with attainable annual goals for appointments and also present the case that 30 percent of all new cars and trucks are purchased by an ethnic minority,” Lester explained.

The business leaders said diversity is a work in progress in terms of the number of suppliers who create vehicle parts and dealers who sell the cars.

“As a supplier, I believe that there are unlimited opportunities in the industry. The problems lie in the challenges that present themselves in order to realize the opportunities,” said Louis James, CEO of JASCO International, a logistics, energy and transportation company.

“While there seemingly is a very strong commitment by upper (auto industry) management to create and expand supplier opportunities, this effort appears to be stymied by middle management, and it is perceived that the ‘diversity divisions’ of the industry do not have the authority to implement corporate policy,” he said.

Louis James is CEO of JASCO International, a logistics, energy and transportation firm, which has been an auto supplier for over 30 years.

James, who has been a supplier for more than three decades, added: “Today the definition of diversity is so broad that it includes businesses that are not disadvantaged nor are they small. It is just good business to source business to diverse companies that represent consumers and that can contribute to the growth of our economy.”

The buying power of minorities cannot be ignored, according to Rainbow PUSH, because in 2013 alone, ethnic-minority consumers purchased 24 percent of vehicle sales, with African-Americans making up 8 percent of those new vehicle sales.

Jackson said minority consumers led new vehicle purchases faster than the rest of the marketplace with a growth rate of 56 percent, and African-Americans making up 33 percent of that growth rate. Toyota topped the list for the top brand for U.S. ethnic-minority consumers in 2013 with 18 percent of the market share; Honda with 13 percent; and Nissan with 10 percent. Those numbers were provided by IHS Automotive, a Southfield-based business management consulting firm.

Bill Perkins, owner of the Eastpointe-based Merollis Chevrolet dealership, has been in the industry for 40 years.

“The main challenge to ownership of dealerships is capital. It takes substantial capital to acquire and operate dealerships,” Perkins said. “Manufacturers have programs to assist, however there are limitations and strict qualifications.”

Perkins, who served as chairman of the 2012 North American International Auto Show, added: “Diversity is an important cornerstone in the auto industry if corporations want to expand and increase demand for their products that a higher percentage of diverse customers will be purchasing in the future.”

Jackson said Rainbow PUSH will continue to engage with the auto manufacturers.

“New problems have arisen — the wave of auto safety recalls, the accidents and disasters and deaths, a result of neglect and inaction when manufacturing defects were found. And despite the industry operating at full throttle, minority suppliers and dealerships are stuck in neutral or jammed in reverse, unable to fully recover as the rest of the industry has recovered,” Jackson said.

At the conference Rainbow PUSH will issue its bi-annual automotive scorecard that identifies companies that are receptive to and implementing diversity initiatives. The scorecard focuses on corporate leadership and human resources; suppliers and procurement, dealers, advertising and marketing, philanthropy and community reinvestment.

BMW, Chrysler Group, Ford, General Motors, Honda, Hyundai, Kia, Mercedes Benz, Nissan, Subaru, Toyota and Volkswagen participated in the 2013 survey. Only Mercedes Benz did not take part in the survey.

“All we ask for — what we demand — is an even playing field, and we can all grow and succeed. Minority communities and businesses must be empowered to grow as the auto industry revs up again,” Jackson said.

bankole@bankolethompson.com

Bankole Thompson is the host of “Redline with Bankole Thompson,” on WDET-101.9FM at 11 a.m. Thursdays. His column appears Thursdays.

What: 16th Annual Rainbow PUSH Global Automotive Summit

Theme: Shifting into High Gear: Commitment, Access and Accountability

Venue: MGM Grand Detroit, 1777 3rd St

Date & Time: 6-9 p.m. Oct. 8; 7 a.m.-5 p.m. Oct. 9

Information: (313) 842-3883

Website: http://www.automotiveproject.org