The automotive industry's great recession has many casualties. But the declining number of minority-owned dealerships merits special attention.
In a story in the Nov. 16 issue of Automotive News, a spokeswoman for a minority dealers association said the number of minority-owned General Motors stores is likely to fall to "1980s numbers." Do automakers want to see two decades of progress undone?
Certainly, minority dealers have been hit by the same shocks felt by the industry as a whole: abysmal sales, abrupt terminations in the Chrysler bankruptcy, termination notices from GM, difficulty in finding financing.
But minority dealers are uniquely vulnerable. Many are first-generation dealers who were brought into the business through Detroit 3 dealer development programs. Often, a minority dealer owns a single Detroit 3 store and has been dependent on a captive finance company for floorplan and capital loans.
Beyond that, the Detroit 3's traditional support programs are operating in low gear. There has been marginal growth in import-brand minority stores, but it doesn't begin to offset the loss in domestic-brand stores.
It's hard to ask much from GM and Chrysler right now. But Atlanta dealer Lou Sobh had a good idea. A federal requirement that one-half or one-quarter percent of those companies' federal bailout funds be used to help minority dealerships would be a relatively modest step that could save some stores. Healthier automakers, such as Ford and imports, need to step up.
This is as tough a stretch as the industry has seen in a long time. We know plenty of nonminority dealers also are feeling the pain.
But if supporting minority dealers was a priority in good times, it must be a priority in hard times, too.