Sheila Vaden-Williams: NAMAD has repeatedly asked for a meeting with GM CEO Rick Wagoner.
GM would not confirm NAMAD's claim. GM says the number of its minority-owned U.S. dealerships dropped from 382 to 362 between Jan. 1 and Sept. 30. That decrease partly reflects a change in the way GM counts minority dealerships, the company says.
A dealership may operate several franchises. GM declined to specify changes in the number of its minority-owned franchises.
GM insists that its commitment to its minority dealer program is "unwavering." But NAMAD, the nation's largest minority dealer group, says GM could not have expected the terminated franchises to have performed effectively in a "chaotic environment" of the company's making.
Impossible to survive
Several former dealers say GM awarded them financially troubled dealerships. They say that made it virtually impossible for them to survive.
In an Oct. 31 letter to GM CEO Rick Wagoner, NAMAD seeks a six-month moratorium on further terminations of minority franchises. The letter, signed by NAMAD Chairman Jay Park and President Sheila Vaden-Williams, cites GM's declining market share.
Park and Vaden-Williams told Automotive News they repeatedly have asked to meet with Wagoner. GM did not grant any of their requests, they say.
Referring to GM's current problems, Vaden-Williams says: "How can you in good faith, with all of that going on, take out your ethnic minority dealers?
"GM is not functioning in a profitable way," she says. "So how can they expect the people who have had the least opportunity to sit at the table and learn the game to operate profitably?"
William Powell, GM's vice president of industry dealer affairs, said in a statement that the number of minority-owned GM dealerships rose by 36.4 percent from 1997 through 2004. In the same period, Powell said, GM's total dealership count declined by 12.3 percent, to 7,591.
Powell said GM works closely with its Minority Dealer Advisory Council, a group that is part of GM's dealer council structure. Its members are elected by minority dealers. The company also consults the GM Minority Dealers Association, an independent group, he said.
"Rick Wagoner has met with these groups periodically and is scheduled to meet with their representatives" this month, Powell said.
The executives who run GM's minority dealer program can answer NAMAD's questions, he said. But Vaden-Williams says her group wants to meet directly with Wagoner.
"In difficult times, it is up to the leader to keep the troops motivated," she says.
Park, NAMAD's first Asian-American chairman, says GM has not kept its promise to embrace his group's "Fifteen Percent Formula for Success." The plan asks each automaker to consider minority dealer candidates for new and open points until 15 percent of its dealerships are minority-owned. Nearly every automaker has agreed.
NAMAD's timetable is open-ended. But Park, a Cadillac dealer in Beachwood, Ohio, says GM has not increased its minority dealer count since it endorsed the plan two years ago.
3 former dealers sue
Three former GM minority dealers sued the company in February. They allege that GM discriminates against minority dealers by providing them with failing stores to run. GM uses the dealers' "inability to overcome the problems as a pretext to terminate them," the suit charges.
Ricardo Sanchez, who is Hispanic, and Chandler Lee, who is black , are among the plaintiffs. Both say they believe GM wants to end its minority dealer program.
Sanchez bought a Chevrolet and Buick dealership in Bay City, Texas, in 2002. He says the previous owner filed for bankruptcy protection for the dealership while Sanchez was closing on the store.
"GM knew it and let me buy it anyway," Sanchez says.
GM removed him as the dealership's president in January.
Lee says GM ran a Buick-Pontiac-GMC store in Ellicott City, Md., from 1997 until he bought it in 2003. He says a January 2004 audit determined that the store lost $7.5 million during GM's ownership. That amount was charged back to Lee, he alleges. GM removed him as president in October 2004.
Lee estimates that 80 percent of the dealerships GM offers minority dealers are financially troubled.
Says Lee: "They wouldn't be for sale if they weren't problem stores."
You may e-mail Arlena Sawyers at [email protected]