The breeze rustles the flashy red and silver streamers over the few cars in the lot out front. Much to Boyd Jarrell`s disappointment, that is nearly all that is stirring at Jarrell Pontiac Toyota on Chicago`s South Side.
No telephone calls. No car buyers to keep the few remaining salesmen busy. And hardly any money for new cars, advertising or what it takes to comfortably run the time-worn dealership at 7600 S. Stony Island Ave.
But Jarrell has a gritty determination to hang on, at least for the time being. ”I`m hoping to stabilize,” says Jarrell, 42, a soft-spoken man who stoically looks back on the last five years as a dealer as bad luck heaped on top of hard-learned lessons.
He thinks he will survive the auto industry`s latest sales slump. But he and many others flatly predict that minority-owned auto dealerships such as his will suffer heavy losses and a number of closings because of the soft market, stiff competition and the added problems they say they face.
”It`s tough and the market has made it more difficult; we are losing dealers,” says Rusty Restuccia, director of marketing services and training for Ford Motor Co. in Dearborn, Mich.
After having gained the barest toehold in the auto industry in the 1980s, minority dealers` situation is not encouraging. Among the domestic automakers` more than 20,000 dealerships, blacks, Hispanics and Asians hold around 600 franchises, nearly 3 percent of the total. Their ranks shrank 5 percent, or 37 dealerships, last year.
Minorities` presence is even more marginal among foreign automakers. According to the 404-member, Detroit-based National Association of Minority Dealers, there are only 19 minority dealers out of an estimated 5,200 franchises nationwide. (Foreign automakers say the figure is slightly higher.) Once the Chicago area had 20 minority dealers, but there are only 11 now, according to officials of the minority dealers` organization. In Detroit, the auto industry`s capital, the closing of a black-owned dealership last week drew some attention; it was the fourth to go under this year.
To some in the black and Hispanic communities, an auto dealership is more than just a matter of pride. It is a foot in the door in the upper ranks of the auto industry, where there have been few minorities. And minority dealers also are more likely to hire minorities, as well as to contribute heavily to community charities and fund drives.
The biggest obstacles to their success have been a lack of experience, lack of capital to weather the industry`s periodic slumps and the fact that the only dealerships available to them usually are troubled or marginal ones. ”The average minority dealer has been in the business about three years,” says Tony March, 39, who has been a Buick dealer in Hartford, Conn., for five years. ”Most of them haven`t been in the business for enough good times to put meat on their bones, so they are not about to weather the storm.”
There is also the problem of finding and keeping qualified personnel, says Restuccia of Ford. Experienced staffers are reluctant to join a new dealership, wondering how long it will survive, he says, and they also are frequently lured away by more successful dealers.
Many minority dealers are faced with another problem that especially rankles them: Other members of minority groups often skip them by shopping in the suburbs, thinking they can get better bargains or service from white suburban dealers.
It`s disheartening for Jarrell, nearly all of whose customers come from the black community. ”People in the city shop in the suburbs, and the suburban people don`t shop in the city,” says Jarrell. The typical minority buyer doesn`t understand the impact of shopping elsewhere, adds March, chairman of General Motors Corp.`s Minority Dealers Advisory Council.
U.S. automakers do have programs to recruit, train and help minorities start franchies, but the dealers give them mixed reviews. The dealers group singles out GM for criticism, noting that though GM has nearly twice as many dealers as Ford, it has half as many minority dealers-163 compared to Ford`s 306.
The criticism angers GM officials, who say they are committed to increasing the number of minority dealers for good business reasons as well as their belief in equal opportunity.
”A lot of criticism, but damm few solid ideas, are put forth to help,”
grumbles Joseph Vasquez, GM`s director of dealer business and development in Detroit. ”You spend considerable time and effort to train, and it is hard to measure . . . whether this guy will get up in the morning and do his best.”
Like the other automakers, GM pays minority dealers a stipend while it puts them through a training program, in its case for 12 months. Ford and Chrysler Corp. require dealers to go through two years of training.
Nearly all of the foreign automakers take a different stance. They say there is a high demand for their franchises, and they do not see a need to recruit and train minorities.
Officials with Mazda Motor Corp. in Taylor, Mich., say the firm has been considering programs aimed at helping minority dealers, but they haven`t reached a decision. The firm says it has 19 minority dealers, but the National Association of Minority Auto Dealers disputes that.
Toyota Motor Sales U.S.A. does not have specific training or financing programs for minorities, but company officials in Torrance, Calif., say their equal-opportunity program has helped their seven minority dealerships.
”We are looking for more minority dealers,” adds company official Mindy Geller, who says that the firm could not add dealers until recently because it did not have enough available cars to stock new franchises.
When Jarrell started at his dealership five years ago, he thought he was well prepared. He had worked with his family`s realty business, earned a master`s degree in business administration from the University of Chicago and believed he was a savvy businessman.
If he made any mistakes, he says, he may have tried to train too many people instead of going after experienced staff. But he says he wanted to open chances for minorities.
The dealership`s downfall, he says, was a 50 percent slump in auto sales in late 1988. It created a downward spiral that has forced dramatic cuts. He cut his staff by more than half, leaving him with 12 members. He now sells about 15 cars a month, down from 70.
It is not the same business as when he started, but he doesn`t want to let it go. He is counting on help from GM or Toyota-and his skill-to survive. Toyota spokesman Jim Olson says Jarrell is ”caught in a down market, and black dealers are the first to get bitten in a declining market.” He says Toyota will work with Jarrell ”every way we can,” but the company cannot set a precedent by bailing him out. If his business survives, Olson says, Toyota can reward him by moving him to a dealership in a more financially stable area.
Jarrell intends to keep his business alive.
”I`m looking at what it will take to run a small, clean business,” he says, his arms folded, as he sits behind a large desk in his office away from the hushed salesroom.
But there is an uncertainty in his voice, and he doesn`t hide it.
