Civil rights leader Jesse Jackson wants General Motors and Ford Motor Co. to declare a moratorium on the closing of minority dealerships until his organization can meet with the automakers to discuss how to stop financial losses at many minority dealerships.
On Thursday, May 8, Jackson faxed letters to top executives at GM and Ford asking them to:
Provide dealers 'facing termination or severe operating challenges' ... 'an appropriate infusion of capital that would sustain the dealers until a workout plan has been implemented.'
Abate floorplan interest for overstocked product that is in low demand, and consider providing dealers with additional allotments of hot products.
Abate debt service interest until a plan has been implemented.
Jackson met with about 40 African-American dealers April 26 at the Rainbow/PUSH Coalition headquarters in Chicago to discuss the dealers' plight.
Jackson wrote in his letter: 'The ethnic minority dealer bodies are concerned about the systematic removals and have asked the Rainbow/PUSH Coalition to represent them in this current crisis.'
About 45 percent of GM's 275 minority dealers and more than half of Ford's 235 minority dealers are unprofitable, dealers say.
The letter was not sent to Chrysler Corp.
In February, Winston Pittman, president of the 90-member Chrysler Minority Dealers Association, said 94 percent of his members were profitable. Pittman, owner of Cardinal Dodge in Louisville, Ky., also is the president of the National Association of Minority Automobile Dealers.
Lee McDaniel, general director of minority dealer development at GM, said he has seen the letter from Jackson. McDaniel said his company has had for some time a plan in place to provide troubled dealers with financial and technical support, and is committed to increasing the number of minority dealers from the present 275 to 303 by Jan. 1.
He said that there is no campaign to terminate minority and African-American dealers, and that the company is working on 'improving the operation, not removing the operator.' He said: 'We can't guarantee success, but the company remains committed.'
Jackson is scheduled to meet with dealers and hold a press conference today, May 12.
Jackson said the situation with some minority dealers is 'a retreat from parity' on the part of some auto manufacturers.
Jackson said adequate representation of minorities in the dealership and executive ranks has not even begun with import auto companies. He noted the exception of Mitsubishi Motor Sales of America Inc., which has hired two African-American executives as a first step toward bringing more minorities into its corporate and dealer networks.
Jackson said he is planning trips to Germany and Sweden to talk to executives at Mercedes-Benz and Volvo about their lack of minority dealers.
Jackson's letters, dated May 8, were directed to General Motors Chairman Jack Smith and Ford Executive Vice President Peter Pestillo.