How Ford compares
Number of Big 3 dealerships owned by ethnic minoritiesFord's dealer development program: An American dream maker
Reprints
Print
Respond
The Big 3 were the pioneers in this area, and Ford Motor Co. was at the forefront.
Ford has invested in 1,718 dealer development stores since it started the program in 1950 - when it was focused on white males. About 750 individuals have graduated from the training program, including about 250 members of ethnic minorities.
George Frame, director of Ford's dealer development program, calls the half-century-old program a "roaring success."
"If you look at the people who have run the dealer councils for Ford and Lincoln Mercury, an overwhelming proportion have come from the dealer development program," Frame says. "This program has produced people who have become leaders and assumed leadership."
Steve Ewing, president of the Ford Lincoln Mercury Minority Dealer Association and owner of Wade Ford in Smyrna, Ga., applauds Ford for its efforts to help all dealers. "The program has changed my life and my family's lives," says Ewing, 43, who is black. He has been a dealer since 1989.
"The bottom line is that not every dealer who goes through dealer development has been successful, but Ford has created the opportunity for people to own their own dealerships. Now they've expanded it to their other (import) brands like Jaguar and Volvo, and that's exciting."
Created for white males
Though dealer development is associated with minority dealers, in the beginning the programs had nothing to do with ethnic groups.
"The (Ford) program was created for white males," says Rusty Restuccia, who wrote 50 Years of Opportunity & Partnership: The Dealer Development Program, 1950-2000, for the company to commemorate the program's 50th anniversary.
Dave Sinclair, who is white, has two Ford and three Lincoln-Mercury stores in St. Louis. He became a Ford dealer in 1966 after Ford lent him $250,000 to get started.
He was a 37-year-old sales manager at Costello-Kunze Ford in St. Louis. Sinclair didn't know that his boss, Tom Costello, had recommended to Ford that it consider helping Sinclair become a dealer.
"I'm forever grateful to Tom Costello. Ford and dealer development were the best," says the 75-year-old father of seven and grandfather of 37 who still works in his dealerships with his three sons and four sons-in-law.
According to Restuccia, the typical dealership in 1950 cost about $100,000. Banks, he said, generally could provide $50,000 loans, but the other $50,000 was out of reach of most candidates, whose average income in those days was about $3,400.
So on July 25, 1950, with the blessings of Henry Ford II, Ford Motor Co.'s board approved the dealer development plan and set aside $1 million to fund it.
The dealer development program stipulated:
"In 1950, based on annual earnings of $50,000, the dealer development operator was expected to buy out Ford's investment in approximately six years," Restuccia writes.
The program had a sluggish start. Two dealer development stores were started in 1950, and 14 were added in 1951. Of the 16, 10 successfully bought out Ford's interest under the program, Restuccia says. During the 1950s 66 Ford and 43 Lincoln-Mercury dealerships were established under the dealer development program.
The program continued to grow. The number of Ford Division dealer development dealers increased from 42 in 1962 to 208 in 1970. The Lincoln-Mercury numbers increased from 24 to 117.
Changing emphasis
Then something happened that had a major impact on Ford's dealer development program: the civil rights movement.
Detroit, the auto capital of the world, was rocked by of one of the nation's most violent civil disturbances. On July 23, 1967, police officers raided a speakeasy in a poor black neighborhood, setting off five days of civil unrest. Forty-three people died and thousands were arrested, and the city sustained $50 million in property damage.
In January 1968, Henry Ford II issued a directive saying, "Opportunities for becoming a Ford dealer or supplier, for example, must be as open and as equal as the opportunities for becoming a successful employee."
Ford created Minority Dealer Operations and appointed Levi Jackson, a black man, who had joined the company in the 1950s, as its manager.
Jackson was charged with helping identify and recruit black candidates. The problem was that there were few candidates.
In an effort to develop its own candidates, Ford established its minority dealer training program in 1974. But "even with the training and in-dealership opportunities, few minorities had the financial capability to acquire a dealership on a private capital basis," Restuccia writes.
In 1984, Ford issued a directive reaffirming its commitment to increase substantially its minority dealer count. Ford said that dealer development would play a significant role in that initiative.
In 1984 there were 95 minority-owned Ford and Lincoln-Mercury dealerships.
At the beginning of 2003, 360 of Ford Motor Co.'s 4,588 dealerships were owned by minorities.
You can reach Arlena Sawyers at asawyers@crain.com.
