HOLLYWOOD, Fla. – After working 37 years for General Motors, it is not unusual for Eric Peterson, vice president of Diversity Dealer Relations, to walk into an African-American dealership and be introduced to one of the owner’s children.
“See that man there,” a dealer recently told his son, pointing to Peterson. “He helped me get started. And if you do what you’re supposed to do, he’ll help you, too.”
Peterson has helped many African-American dealers for nearly four decades. Not only has he helped them get started, he has helped keep them grow their business.
“Everyone has a story,” Peterson recounted. “My passion is helping people realize their dream. It makes me feel good about what we’re doing.”
And GM has done a lot.
“GM has a long history of diversity and inclusion before it became popular,” Peterson explained. “We started the first minority supplier program in ’68. We started the first minority dealer program in ’72. Rev. Leon Sullivan was the first African American on a major board and that was GM. We started the first dedicated women’s program in 2001. No other manufacturer has done that. Diversity and inclusion has been in GM’s DNA.”
At its peak, there were 400 dealers of color, approximately 150 of them African American. Like the overall figures, the number of minority dealers has also sharply declined. In 2013, there were 208 minority dealerships, tops in the industry. That figure is 211 minority dealers, 44 of them African American.
The company continues to rebound after going through a government-backed bankruptcy in 2009. As part of that Chapter 11 reorganization, the company discontinued its Hummer, Pontiac and Saturn brands and sold Saab to a Dutch automaker.
“When we went through bankruptcy, we downsized our overall dealer portfolio,” Peterson recounted. “We lost about 25 percent of our dealers. Part of it was going through the downturn of ’08 and ’09 – a lot of guys just couldn’t make it because business was off 50 percent. We lost about 25 percent overall, we lost about 28 percent of our minority dealers. Among African Americans, we lost about 33 percent.”
He said GM’s decision to ditch four of its eight brands hit African-American dealers especially hard.
“When we put Saturn dealerships in, when we put Hummer dealerships in, we put a lot of African Americans in because those were the new points of opportunity,” Peterson said. “Unfortunately, when we had to downsize and consolidate our network, we went down by four brands – from eight to four – and unfortunately, we lost Hummer, we lost Saturn, we lost Pontiac and we lost Saab. So when we lost those, we lost a lot of those dealers.”
Looking back on that period, Peterson said, “While it wasn’t pretty for anyone, we were trying to survive.”
Even in the best of times, it’s not easy to survive.
In order to be successful as a dealer, Peterson said, one has to be what he calls a student of the game, realizing, for example, that a dealer may make a sale, but it is the service department’s reputation that drives customers back for repeat business.
“A lot of them are starting to grow their portfolios,” Peterson said, referring to African-American dealers. “Tony March and Ernie Hodge have like 18 different franchises. Very few people know about them because they just work, they just make it happen. It is not uncommon for our dealers to have multiple stores.
“Most of our dealers are first generation [owners] and that’s a challenge when you competing against other dealerships, which are mostly family-owned. It’s not uncommon for them to have second-, third-, or fourth-generation dealers in place, where they’ve just passed it down. We haven’t had that luxury yet.”
But he encourages more African Americans to consider becoming dealers, noting that a business person has to come up with 15 percent of the fee needed to open a dealership [a minimum of $350,000]. Because GM has its own finance and mortgage company, it can provide the rest of the startup capital and finance inventory. In addition, the company pairs future owners with mentors for a year before they operate a dealership.
Sometimes dealers fail before succeeding. Pamela Rodgers, who owns Rodgers Chevrolet in Woodhaven, Mich., is a case in point.
“When she first started, she was working for Ford in accounting or something of that nature,” Peterson recalled. “She heard about our program – it cost about $70,000 at the time, which tells you how long ago it was. She said, ‘I’m going to try that.’ The first time, she wasn’t successful.”
That was in the 1980s. Now, Rodgers is clearly successful, seeing her sales grow from $14 million to $80 million and recently being named Black Enterprise magazine’s Dealer of the Year.
Most of GMs minority dealers — nearly 86 percent – are profitable, just below the company-wide figure of 89 percent. They sold 126,617 new vehicles in 2013, brought in $8.5 billion in revenue, employed more than 12,000 people and 68 minority dealerships earned $1 million or more in net profit.
Though his title encompasses the word “diversity,” Peterson is clear that Blacks must not get marginalized as companies shift from favoring affirmative action, primarily for African Americans and women, to diversity, which is a broader term that can encompass a variety of groups.
“Now, everything is becoming more multicultural, everything is becoming more minority and diversity focused and is taking attention away from ethnic groups,” he said. “From my perspective, we get lost in that shuffle.”
To avoid that, Peterson makes the business case from growing the number of dealers who look like him.
“A lot of people say, ‘It’s a nice thing to have minority dealers.’ This is a business imperative. With GM, 25 percent of our cars are bought by African Americans, Hispanics, Asians and Native Americans; my perspective is that we need to grow that.
“As I tell people I work with, increasing the number of minority dealers, minority suppliers, minority agencies, minorities that work for GM is a business imperative because you need the right people at the table that can relate to this growing segment we have out there. If we don’t do this, someone else will. I want to increase our market share. It’s all about business.”
Peterson started in the mailroom of GM and successfully climbed the corporate ladder. But after moving 10 times and holding a variety of jobs, he gets the most satisfaction from increasing the number of African American dealers.
“The better days of my life outside of God and my family is putting dealers in,” he said. “On the day they are signing that agreement, they have this big smile on their face and say, ‘I finally made it.’”