Jesse Jackson: Blacks still 'sharecropping' in automotive industry

Rainbow PUSH targets new imbalance with Japan

Jesse Jackson: Blacks still 'sharecropping' in automotive industry

Jesse Jackson: "We need a balance of trade."

Photo credit: Bloomberg
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YOKOHAMA, Japan -- Mention trade deficits with Japan, and the phrase usually conjures the 1980s trade wars with Tokyo over the flood of made-in-Japan imports to the United States.

But for civil rights leader Jesse Jackson, there is a new trade gap with Japan.

This time it is an underrepresentation of minorities at the U.S. automotive operations of Japanese automakers. Toyota, Honda and Nissan are the top three brands for minority shoppers, yet minorities are sorely missing on the selling side of the transaction.

“We need a balance of trade,” Jackson said today at the end of a Rainbow PUSH Coalition trade mission to drum up minority business with Japan’s leading carmakers. “We’ve been reduced to either assembly workers or purchasers. But we’re into dealerships, suppliers, manufacturing, sales, advertising, marketing and design.”

Jackson took the message to the Japan offices of Honda, Nissan and Toyota during the six-day tour. With a group of minority-owned U.S. auto suppliers in tow, he pushed executives and purchasing departments to set targets for expanding business with minority-run manufacturers and dealers.

Japan lagging

Jackson’s campaign targets Japanese automakers for two main reasons.

First, the Japanese are expanding in North America, opening new opportunities for minority businesses. Second, the Japanese still trail the Detroit 3 in Rainbow PUSH’s Automotive Diversity Scorecard, which ranks companies’ inclusiveness of minorities.

None of the carmakers publicly committed to any diversity targets after the meetings.

“Since we feel our supplier base should represent the diversity of our customers, we are honored to have been one of the hosts for this visit and other supplier diversity initiatives,” Toyota spokesman Brian Lyons said. He noted that Toyota already hosts an Opportunity Exchange that allows minority-owned businesses to network with Toyota’s direct suppliers.

Still, delegates said the visit put their companies on the radar.

'Knocking on doors'

“We have been knocking on doors for a number of years and have never gotten beyond the iron curtain,” said Stephen Hightower, CEO of Hightowers Petroleum Co. in Middletown, Ohio. “A lot of doors were opened to us in the past few days.”

Hightower’s company supplies gasoline and diesel fuel to all General Motors manufacturing sites in the United States and Mexico, as well as to Ford Motor Co. and Chrysler Group. He has no Japanese customers.

Another supplier, Emma Hill Manufacturing, makes floor mats for Honda Motor Co. in Georgia. But owner Jeffrey Willis says the Honda executives he met in Tokyo were surprised to learn his company was black owned: “That was a real eye-opener.”

Last in, first out

The 2009 financial crisis disproportionally hurt minority businesses, Jackson said. Of close to 20,000 dealerships nationwide, the number of African-American-owned dealerships plunged to 200 from 700, he said, adding, “We were last in and first out.”

The U.S. system of allotting dealerships and territory “puts us in kind of a sharecropping relationship,” he said. “It’s normal to expect balanced trade -- reciprocal, beneficial trade. And the history of our struggle is that we’ve been locked out of the equation.”

The Japanese need to better align minority opportunities with sales, Rainbow PUSH says.

The top three brands for ethnic minority consumers in the United States last year were Toyota, with 18 percent of minority market share; Honda, with 13 percent; and Nissan, with 10 percent.

Minority consumers

Also last year, ethnic minority consumers accounted for 24 percent of all U.S. sales, with African-Americans making up 8 percent of new-vehicle customers. And, according to Rainbow PUSH, sales to minorities grew faster than the rest of the marketplace, with total minority sales expanding 56 percent, and sales to African-Americans growing 33 percent.

“Look at the amount of the product that we purchase and our impact upon their bottom line. We want a reasonable reflection of our investment,” Jackson said.

“They have goals for units of production. They should have goals for units of participation in legal services, accounting, advertising and marketing, dealerships and manufacturing.”

Rainbow PUSH is pursuing a parallel campaign with American automakers. But the advocacy group says the Japanese brands trail their U.S. rivals in diversity.

Scorecard

Its latest Automotive Diversity Scorecard, issued in 2012, evaluates carmakers in six areas, including employment, advertising, procurement, dealers and philanthropy.

Ford and Toyota tied for No.1, followed by GM and Chrysler.

Other Japanese brands fared in the middle of the pack, with Honda and Subaru further ahead of Nissan, which scored second-to-last. At the bottom was Mercedes, which Rainbow PUSH said didn’t complete the survey.

“Minority suppliers took it a bit harder in the downturn than other suppliers and dealers, and we recognize what they are telling us,” Nissan spokesman Jeff Kuhlman said.

Going global

John Henderson, president of automotive logistics company AEL Span in Belleville, Mich., counts Toyota and Nissan among his customers. But he joined the trade mission because he wants to do business with those companies outside the United States.

“We are focused on becoming a global entity,” Henderson said. “Do we get the consideration we think we should in Mexico or Istanbul? When it comes to doing business in other countries, we don’t even get considered.”

You can reach Hans Greimel at hgreimel@crain.com. -- Follow Hans on Twitter


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