Black GM Auto Dealer Comes To Harlem Will this move get minority-owner watchdogs off General Motors back?

2005-12-07 - Newsday, Melville, N.Y.

http://www.blackenterprise.com/

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Dec. 8-Occupying a block in upper Manhattan, the Harlem Auto Mall will be a major milestone when it opens early next month in one of America's best known African-American neighborhoods.

The two dealerships in it, handling four General Motors brands, will be the neighborhood's first new-car dealerships in about 50 years. And both will be run by African-Americans, Otis Thornton, who owns a GM dealership in New Jersey, and Craig Lee, who works for the Potamkin Auto Group on 11th Avenue in Manhattan.

But as the finishing touches are put on the Harlem complex, an organization representing minority new car retailers is criticizing General Motors and other carmakers for, in its view, not doing enough to ethnically and racially diversify their dealer ranks.

The National Association of Minority Automobile Dealers, based in Lanham, Md., says on its Web site, "People of color represent more than 32 percent of the population purchase 15 percent of new and certified used cars and trucks in America and yet ethnic minorities represent less than 5 percent of the majority owners of dealerships in the United States."

The group wants carmakers to commit to a "blueprint" for reaching a 15 percent majority-ownership of their retail network by minorities.

Thornton, a veteran of about two decades in the car business, will sell Chevrolets and Saturns in one of the Harlem mall's two buildings while Lee, in partnership with the Potamkin family, will sell Cadillacs and Hummers in another.

"It's important to have minority management in general," said Robert Potamkin, a co-owner of the retailing empire that bears his family name, "but in Harlem in particular."

Even without the Harlem mall, GM is ahead of its competitors in diversifying its dealer ranks locally. Five of GM's 47 Long Island stores, or 9.4 percent, are minority-owned. Three are Saturn outlets, in Hicksville, Medford and Massapequa, owned by DCH Inc., a private company with roots in Hong Kong and now headquartered in New Jersey.

Sun Auto Group, handling five GM brands at locations in Wantagh and Bohemia, is owned by Patrick R. Cassino, a 20-year veteran in auto sales whose ethnic background is Puerto Rican.

The fifth, Huntington Chevrolet in Huntington Station, is owned by Gregory Williams, an African-American.

In the city, GM said, four of its 25 dealerships are minority-owned -- two each in Brooklyn and Staten Island.

Ford Motor Co. has no minority dealers on Long Island or in the city, although 364, or 7.1 percent, of its dealers nationally are minorities. Chrysler Group, a unit of DaimlerChrysler, has no minority dealers on the Island or in the city, either, though it has 150 nationally -- or 3.8 percent of its total.

Toyota says 6.1 percent of its 1,212 dealers nationally are minorities, but none on Long Island or in the city. Nissan says 62 of its U.S. dealers or 5.8 percent are minorities, but none on the Island and one in the city, Cox Nissan in the Bronx.

Shau-wai Lam, president and chief executive officer of DCH, said he believes carmakers are sincere in their efforts to recruit more minority dealers, but that it's much easier said than done. "It's not easy to find minority candidates who have the skill and the experience," he said.

Cassino speaks highly of GM's efforts in diversification. "I don't think anyone can do much more than GM has, short of giving away the stores for free," he said.

GM says it's doing its best. "We think our dealer body should be reflective of the communities we sell into," said Dawin Wright, who, as General Motors' executive director of dealer development for the past three months, oversees the company's efforts to attract minority and female dealers. "We think that makes good business sense."

By its own figures, though, GM isn't even close to its stated goal of a dealer body 15 percent minority; only about 5 percent of its 7,300 dealers are minority owned.

GM officials say that the number of its minority-owned dealerships rose 36 percent from 1997 through 2004, from 280 to 382 nationally. The improvement Wright notes, came as GM's total dealer body declined by 12 percent.

Getting minorities into dealerships is one thing; keeping them is another. Some of GM's relationships with minority dealers have ended unpleasantly. Early this year, four, including one who ran a dealership on Long Island, filed suit in federal court in New Jersey against GM, claiming it violated their civil rights by denying them pertinent financial information before they took over the dealerships and taking other actions that, in effect, set the minorities up for failure. The suit also claimed minority dealership agreements were terminated "at a rate grossly and glaringly disparate" from those with non-minorities.

In a 152-page answer, GM denied any wrongdoing and noted that it has made ongoing changes in the program that have improved its success rate.

One of the plaintiffs, Chandler Lee, an African-American, operated two GM dealerships successively in North Carolina, then ran one in Hicksville for a time in the late 1990s called Classic Pontiac-Buick-GMC. He later ran a fourth in Ellicott City, Md. He claims he was forced to sell the first three and, in court papers, said he was "physically removed" from the Maryland dealership and his franchise agreement terminated, purportedly because the businesses weren't profitable. The suit is pending. Lee didn't return a call seeking comment.

Another suit is pending over the former Palanker Chevrolet in West Babylon, run for several years starting in about 1994 by William Adkins, an African-American. It was taken back by GM in 2005 and sold to another, non-minority principal. GM wouldn't discuss details of why its relationship ended with Adkins, citing the pending litigation. According to court papers, Adkins claimed GM refused to help him collect on an insurance claim he filed to cover a loss of more than $2 million from an alleged theft scheme by two dealership employees.

Adkins attorney Richard Burton said a federal jury in Central Islip last year awarded Adkins $2.39 million from GM, which the carmaker is appealing.

Thornton, of the Harlem Auto Mall, says he is confident the venture will succeed with GM's help. "It's a growing area and it does need a dealership," he said. "It'll be successful if GM supports me and if the community supports it."

Cassino says his dealerships are thriving and his relationship with GM has, in the main, been positive. "I like the way GM operates," he said. "And I guess I feel indebted to them for giving me a chance."

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