Diversity is more than an ideal at General Motors. It is a business policy, GM Chairman Jack Smith said.
Smith, the keynote speaker at the GM Minority Dealers Association banquet in San Francisco, said GM is committed to assisting and supporting its minority dealers.
'You have my personal commitment that we will do everything we can within reason to lower barriers and improve the odds for minority dealers - current and future - so that they will have a full and fair opportunity to succeed,' Smith said.
Martin Cumba, chairman of GM's Minority Dealer Advisory Council, commended Smith. Cumba then challenged GM to become the first auto company to have a dealer network that mirrors the ethnic makeup of the country, and he challenged minority dealers do more to help one another.
'We must take an active role in mentoring our own; we're only one generation from extinction,' said Cumba, who owns Fairfax Pontiac-GMC in Fairfax, Va., and Northtowne Chevrolet in Temperance, Mich.
In his presentation, Smith pointed to accomplishments of GM's minority dealer program:
GM's 294 minority dealers generated $8 billion in sales in 1998.
The number of minority-owned dealerships increased 57 percent since 1992, while the total dealer network decreased 11 percent during that period.
Still, the program has experienced trying times. In August 1997, GM hired Weldon Latham, a senior partner at Shaw Pittman Potts and Trowbridge in Washington, to review the program and find out why many minority dealers were failing. Almost a year later, in June 1998, Latham presented his conclusions, which included 215 recommended changes to the program.
In an interview, Eric Peterson, general director of minority dealer development, said 201 of the recommendations have been implemented, and 12 are under study.
Two recommendations were rejected. One sought to establish a dealership dedicated to training minority dealer candidates, Peterson said.
As a result of the study, GM has made the minority dealer selection, training and the review process more rigorous to try to assure candidates have a good chance to succeed, Peterson said. At the recommendation of dealers, GM has increased the investment of dealer candidates in the program from $85,000 to $125,000, Peter-son said.
Ten recommendations involved GM's finance company, General Motors Acceptance Corp. Peterson said the report indicated there is a misconception among minority dealers that GMAC looks more favorably on the customers of white dealers than the customers of minority dealers. He said GMAC is conducting workshops for minority dealers around the country to explain the finance process.