Minority Auto Dealers Webcast Transcript 2022
DEREK COMESTRO: All right. Good morning, everybody, and/or afternoon. On behalf of the Chrysler Minority Dealers Association and Bank of America, I would like to welcome everyone to today's webcast. I'm Derek Comestro, Regional Market Executive for Dealer Financial Services at Bank of America.
I'm joined by Mitch Mitchell, who is the Executive Director of the Chrysler Minority Dealers Association. Mitch, the B of A team, and our dealer panel have been working on this very important project for the past several months and are excited to share it with everybody today. Mitch, I'm going to turn it over to you to provide our listeners with some background on yourself, as well as introduce our dealer panel.
MITCH MITCHELL: Thank you, Derek. First of all, I'd like to say thanks to Bank of America, and thank you to you as well, for hosting the Chrysler Minority Dealers Association and this event today. We're really pleased to be joining you and really pleased to share our thoughts and insights on our world in terms of minority dealers.
So as Derek mentioned, my name is Mitch Mitchell. I'm the Executive Director here at the Chrysler Minority Dealers Association. Our Association has been going for about 35 years now, so that's pretty amazing. We're located in Troy, Michigan, and that's about 10 miles south of OEM Stellantis. That's our OEM partner south of their North American headquarters and about 15 miles north of Detroit.
I've been the Executive Director here for the last three years. And prior to that, I actually worked for Stellantis, which was actually FCA at the time. I worked for them for 20 years in various roles, including finance, sales, and dealer network and franchising, so I've been around for quite a while. And one other thing that I'm always proud to say is, I'm also a military veteran, having served in the military for 23 years. So I'm always glad to mention that as well. But enough about me.
I'm also joined by three other very prestigious individuals, and that's some dealers of ours who also happen to be members of our Association. And so today we have Mr. Jay Gill, who's the President of Gill Auto Group in Fresno, California. We also have Mrs. Shannon Inukai-Cuffee, who's the President of Dick's Auto Sales in Hillsboro, Oregon. And last and certainly not least, we have Mr. Ken Thomas, who is the Operating Partner at Northland Chrysler Dodge Jeep Ram in Oak Park, Michigan.
So again, I'd like to say thanks, Derek, for having us, and thanks, Bank of America. We really appreciate it, and we're looking forward to the discussion.
DEREK COMESTRO: Perfect. Great, thank you, Mitch. And welcome, Shannon, Jay, and Ken. Before we jump into the panel interview, I'd just like to take a quick minute to cover a few housekeeping items. First and foremost, we have allotted some time today for Q&A, so if you have a question for any of our speakers today, simply click on the Ask the Question tab on your screen, and we'll get to as many as we possibly can. In addition, just a reminder, a replay of today's webcast will be available along with our full report out on today's topic.
All right. So let's get started. As mentioned already, this has been a joint project between the Chrysler Minority Dealers Association, B of A, and our dealer partners, with a simple but very important objective: to bring more awareness on the importance of minority management and ownership within the dealership industry. As a result, we'll spend the bulk of our time today outlining the main challenges and roadblocks, discussing potential solutions; as well as highlighting the additional support needed.
Mitch, as a jumping off point, maybe you can start by providing our audience with a high level overview of where we are today and how we are doing overall.
MITCH MITCHELL: OK, I can do that. But before I do that, let me really briefly just talk about CMDA's mission in terms of this minority dealer landscape. When I typically talk to people, I always mention the minority dealer funnel. And if you picture a funnel, it's got a wide opening at the top and a small opening at the bottom. So our mission here at CMDA is to-- pardon the expression-- cram the top of that funnel with as many ethnic minority dealers and ethnic minority dealer candidates as possible. We want that thing overflowing if we can get it.
Secondly, there's an opening at the bottom, and that's where dealers fall out. So our second mission is to make sure that that opening at the bottom is as small as possible, so that we lose as few dealers as possible. Again, making certain if we're cramming them in at the top and losing as few at the bottom as possible, that the overall minority dealer population is robust all the time.
And so primarily, the mission of the Association and what I do every day is really focused on those two things, just to put it very succinctly. If it's not in one of those two parameters, it's not a priority of the Association. So I wanted to start with that so that everybody understands what the Association does.
But then, secondly, let me pivot to talk about the minority dealer landscape. Like most things, it's always in a state of perpetual evolution, always changing. And the Association is here to help our dealers, the OEMs, and our third party stakeholders deal with that evolution. The evolution started with the creation of the dealer development programs that the OEMs had back in the late '70s, early '80s. That's how the first couple of generations of minority dealers came to be. So those programs were pretty robust, and they produced a lot of good dealers out of those programs.
Since that time, the minority dealer numbers have kind of ebbed and flowed over the years. In 2005, we kind of hit our peak. We had about 1,800 dealers across the national landscape. And then when the recession came in 2008, '09, '10, we lost a significant number of dealers. Since that time, we've seen a slight resurgence in those numbers, and we're back at about 1,300 dealers today, or about 7% of the overall population. And so while that resurgence is good, we'd love to see those numbers to continue to increase.
And so to help that increase, we've also seen somewhat of a resurgence from the OEMs with their dealer development programs, because those programs were sundown during that recession that I mentioned. But now, they're coming back. They're standing them up again, and that's a lot of help. Additionally, the OEMs continue to understand that maintaining a robust ethnic minority dealer network is not only good for minority dealers, but it's also good for their businesses because ethnic minority dealers are great businessmen as well.
And most importantly, Derek, we still see a great level of interest from minority dealer candidates who want to enter in this business because they know that it's a great business to stake your future on. So I think the landscape is great right now. It's not without its challenges, but I do think we still have a great landscape to look out on, and minority dealers play an important role on that.
So with that, I'm going to pivot just a bit and get Jay Gill involved here in the conversation. So Jay, I just want to ask you, in your opinion, why do you think minority dealers are important for the automotive industry?
JAY GILL: Yeah, [INAUDIBLE] Bank of America for putting on this conference. So first of all, as an entire population of the US becomes more and more diverse, I think the new majority is the minority. And all these OEMs need to realize that if they want customers they're targeting and communities they're targeting, what better way to target those communities than to have dealers that look like them that understand their culture? And more and more, they are more involved. They understand the community.
All across our enterprise, all of dealerships that we own, every time we've taken over a store and the community is involved, our sales automatically go up 20% to 30% just to the minorities. So I think the minority network has played a really important role in the OEMs, and I think they're going to continue to play even a bigger role because the entire population is becoming more and more diverse. And I think corporate America is starting to realize the buying power of these minorities, and I think that they're finally understanding that it's a good win-win situation for everybody involved.
MITCH MITCHELL: I agree with you, Jay, on the role of minority dealers. But let's expand that a little bit. Ken, do you want to add anything, any different perspective to what Jay has mentioned for us?
KEN THOMAS: Honestly, I agree with everything that Jay said regarding that people want to deal with people that look like them. And whether they're personally dealing with them or not, they just want to know that there's someone like them in the room. And I'm here in Detroit. I'm the only minority-owned Chrysler dealer in Detroit or on this side of the state of Michigan. And I get a big draw from the customers just because they know it's minority.
And it's not minorities only that's coming to see me. It's all aspects of the customers just coming to see me, just because they see that there's a minority dealer in the area, and they want to give us a shot. Since we took over almost three years ago, we've seen our new car sales double year over year from what we took over. We've seen our used car business quadruple actually from when we first took over. And it's just getting the word out, letting them know that there's a new face in town.
And people are coming in just because they want to be a part of it, and that's where having-- again, it's 2021. I'm the only minority in a majority minority city in this market. And that's a sad statement. So there needs to be more in this market to begin with, and that gets these customers engaged. They want to do business with us. They want to do business with minorities, and it's being proven right now.
MITCH MITCHELL: Well, that's a living testament, Ken, that customers want to do business with people who look like them. And I think that's also a testament to the importance of why you need minority dealers. Again, it's not just from a gratuity sake. It's good business to have dealers in the community so that they can serve communities that look like them, and customers can do business with people who look like them as well.
I'm going to pivot over to Shannon. Shannon, you're the lone female on our panel, so I want you to address the general challenges that you see in our business. But also, specifically, I'd like you to address the challenges that you see women facing who are in this business as well.
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SHANNON INUKAI-CUFFEE: Sorry about that. Well, thanks for having me here. It's great to be representing the females out there. I mean, I think I'd like to echo the challenges that both Jay and Ken mentioned, in that people do want to buy from people that look like them. And we all know that half of our buyers are females, so it's good to have that representation. And I know there's still too few of us. And I think that that's one of the challenges, is that just getting the word out there for other women that there are lots of opportunities in what has typically been known as a male-dominated field.
And I think that both the manufacturers, the OEMs and us as dealers, if we do a better job of recruiting and letting women know that there's a lot of opportunity out there, specifically in leadership roles and letting them know that we are a good place for careers, and that we offer a lot of training and opportunity-- and if we do a better job of that and maybe of mentoring as well, I think that we could hopefully attract more females in our business. I know Ken had mentioned that-- I think it was Ken that had mentioned maybe one of his top salespeople is a female and that she's a veteran salesperson.
KEN THOMAS: Yes, that was me. Yeah, just for that point, not only is she a veteran, she's a 70-year-old veteran who pretty much has not walked inside of our building since COVID hit. She's doing all of her business outside and sends her customers in, and she's our top salesperson every month, month in and month out.
MITCH MITCHELL: Wow, that's awesome. Well, that again, that's a microcosm of what we just discussed, right? About people who want to do business with people who look like them. I mean, I think, especially in the dealership space, you know, women, when they walk into that space, it's a space that historically speaking has been dominated and is still dominated by men. And that can be an intimidating aspect for a female customer.
So if you walk in and you see a female salesperson, you see a female. More importantly, you see a female dealer principal. I mean, that just makes you happy to do business with that dealership.
JAY GILL: So if I can add on briefly on that, I think some of the residual effects of having minority dealers in our communities, we don't even realize. I was in my showroom the other day, and a young kid asked if I was the owner. And he was so, so surprised, and he didn't realize that minorities actually could own dealerships. So I think just aside from corporate America getting the product out there, I think the residual effects of the impact it's having on young people, I think it's great for the communities.
MITCH MITCHELL: That's great. That's great. Thank you, guys, for asking that question. So Derek, I'm going to turn it back over to you to talk about some of our challenges.
DEREK COMESTRO: Sure. All right. So thanks, guys, and great insight. I mean, I think you guys covered the why it makes sense and the win-win for everybody, manufacturers, all the partners within the industry, the dealers, and even the consumers. But we all know that there's still challenges out there. So let's spend the next 10 minutes or so talking about what those challenges might-- at least the top two or three challenges from your perspective. So let's start with Ken.
KEN THOMAS: Well, I think that Shannon kind of mentioned it already. The biggest challenge right now for minorities to get in this business is opportunity. I have been in this business now for well over 30 years. I won't say how many more than that. But at every level through management, every conference I went to, every training event that I went to, I was always the only African American in the room, I was the only minority in the room.
And again, I'm in Detroit. It's a majority minority in this entire metro Detroit market, and I was the only minority in that room. And as I went through, I went through Mitch. Mitch was in charge, actually, of the minority program when I went through Chrysler's minority program, and even he mentioned at that point, when they were scanning the country finding qualified people to even put into the program, it was difficult. So the first issue is that we have to be able to bring more people into this business to begin with and get them trained up to go. There's more than enough people in the business, but they're not seeing the same opportunities.
And again, Detroit market is mainly family-owned business, family-owned car dealerships. So the minorities aren't getting that opportunity to move into management to begin with so that we can put them in a position where they become qualified, and they're on a bench ready when that opportunity does show up. So that's got to be our biggest challenge right now, and that's something that we have to challenge ourselves to make a difference with as we go forward. To get more people into the fold, to get more people qualified and trained up so that they can get in that position where, when that opportunity arises, they can take over a business and actually be successful with it.
DEREK COMESTRO: Makes sense. Building that bench, investing in the next generation. Jay, how about from your chair?
JAY GILL: Yeah, so I echo what Ken says. But obviously, there's many, many challenges. One of the biggest challenges is access to capital. And I started my business 25 years ago through an SBA loan, and if that loan didn't exist, I probably wouldn't be here today. And I think it's a very, very important that those programs out there through the government and what have you, we need more and more of those because there's a lot of great operators out there, given the opportunity, and they can do great things.
I think the other challenge-- you know, Ken touched on it-- is the deal flow. As a minority, I think we're the last guys to get an opportunity at the deal because there's a perception out there that minorities won't have the firepower to take down some of these deals. So when sellers are considering exiting the business, first thing they look at, either other guys that have generational wealth, or they go to brokers. And brokers, obviously, they do the same thing. They look for large groups that they know that the capital is not going to be a problem.
But I got to tell, to some extent, it's true that minorities don't always have the capital. But there's a lot of minorities out there across the United States that are very, very well capitalized, that have done an amazing job. And then they're successful, and they can do some of these bigger deals. And I think that's where the OEMs got to come in, and they've got to start steering that business towards more and more minorities, because we always get the deal that nobody wants.
And then when the minority feels like, oh, he didn't do a good job, no, it's the wrong person in the wrong place. So I think it's important that the manufacturer is steering these deals more and more to the minorities.
DEREK COMESTRO: Yeah, absolutely makes sense. Shannon, anything to add?
SHANNON INUKAI-CUFFEE: I mean, when Ken was talking, it made me think about my own experience as a female in this business. I mean, oftentimes-- I mean, always through my career when I was younger, I was always the only female in the room, and still to this day. Even when we were meeting in person, I can recall a meeting not that long ago where I was the only female in the room, not just the only female dealer.
So I mean, I think that both what Ken and Jay were saying about the manufacturers helping to bring us deals, I think some of the manufacturers also not just have specific minority programs, but they also have specific programs for women as well. And so I think that's just another avenue for us to get more women into the business, and then continuing on that mentorship and helping those women succeed in our own dealerships will help us create that bench for those leadership roles.
DEREK COMESTRO: Yeah, makes complete sense. Makes complete sense. All right, well, good. So we outlined some challenges, and if we're being fair and honest, particularly for those have been industry a long time, some of these challenges we've been talking about for the better part of a decade or two, right? But there's also some newer challenges as well. So why don't we turn our attention, then, to potentially some of the solutions that might help solve some of these, or at least improve situations.
Because we know it's not an overnight solution. We know it's not a one week or two week or a year type of thing. It's something that we just got to keep working on and keep making progression. So why don't we start by talking about what we think might be the top one or two solutions that would have the biggest impact. So Ken, let's start with you again.
KEN THOMAS: Well, as far as my point with the opportunity, it's got to start with us. When I took over this business, I made sure that my goal was to give everybody equal opportunity to move into management positions. So I've got a very diverse staff. It's probably 50-50, the overall mix of-- I've got male, female, Black, white, Albanian. I can't remember all the other nationalities.
The way I was brought up in the business, the main person that promoted me through all the different ranks, he looked at me and said, here, I don't see your race or your color, I only see what you can do for me. So that's the outlook that I have when I'm evaluating the talent. It's what can you bring to the company. What can you do for us? It's not a question of identity. It's just all about what you can do in the job, and are you the best person for it.
And if everyone looks at it in that way, I think we'll see a little bit more of a diverse management group out there. And we'll have more people naturally rising to that position where they can get into their own business.
DEREK COMESTRO: I think we lost a little bit at the end, Ken, but thank you.
KEN THOMAS: Oh, sorry about that.
DEREK COMESTRO: We got you back now. That's all fine. That's OK. Shannon, how about from your perspective?
SHANNON INUKAI-CUFFEE: Well, I think one of the things that we do really well probably as dealer operators is promote from within. And so I know from our perspective, or at least at our dealerships, we have-- one of our general managers started out as a detail person, like 30 years ago. So I mean, and has worked his way up the ranks. So I think, back to what Ken was saying, it is up to us to create those opportunities to get into those roles.
I think one of the things that we could maybe do a better job of or help each other with is finding new outlets for that talent and getting the word out there how great the car business is, how many opportunities there are, and what a great living and all the things you think about. People often will say, I didn't know that car dealers had the opportunity to travel as much. I mean, we get the opportunity to go to lots of different meetings and meet new people and network and all of those things that maybe people don't really associate with the car business. So I think that that's finding more talent and then creating those opportunities for them.
DEREK COMESTRO: Yeah. Jay, how about your thoughts?
JAY GILL: So, I mean, those are all great points. Every GM that I have, I try to sit down with them and, of course, find out where do they want to go, what are their aspirations, and what are their goals in life. And obviously, a lot of them want to become a dealer principals themselves. And I've had many people that started as salespeople and worked their way up to-- I got a 30-year-old kid right now. He's a GM running one of my stores, and he'll be a dealer one day.
So we sit down. We outline my goals and their goals. And over the last 25 years, I have helped three other minorities purchase their own dealerships, and not just minority interest, 100% of their own owned dealerships. So I agree, we have an obligation as guys that have been there and done that to help these young people. And we have just as much responsibility as the OEMs do.
Now, I think we can train these people, get them up to candidate ready. We can do all these things, but there's got to be a true partnership from the OEMs to really believe in the concept of having more diversity. And I think if you look at it across all the OEMs, they really are embracing this concept. But the problem that I see is there's a disconnect. The opportunity to talk to the CEOs all the way at Ford, Jim Farley, and some of his lieutenants, and what have you, I think one of the biggest issues I see, they really believe in the idea.
But when it gets all the way down to field level, those guys they like the concept, but they're really going through the motions as opposed to being emotionally involved for a number of reasons. They have so many other responsibilities, and they have so many other targets to make. This is just one of the things that's on the back burner. So I think the OEMs got to be more and more resourceful. They've got to provide these guys more resources, and they got to have individuals in each market and each region to make sure that they have a dedicated person that is going out and creating these opportunities.
Because as dealers, we can help young minorities get ready for those roles. The opportunity's got to be there because that's been-- one of the biggest challenges is we've got people that have been ready for 10 years, and there's not an opportunity that they have. So I think it's got to be a partnership between us dealers and also the OEMs.
DEREK COMESTRO: Well said. Mitch, how about from the Association's perspective?
MITCH MITCHELL: So from the Association's perspective and my perspective personally, I think we also need to make certain that candidates are educated. And when I say educated, I mean from two different perspectives, Derek. First of all, is the candidates who currently work in dealerships who are looking to purchase a dealership in the near term-- let's say, near term is one to three years-- those candidates, we have to make certain that they not only understand the business of selling cars, but they understand the business of running a business.
Because I think that is so important. We have a lot of guys, a lot of women, but they also need to understand financial statement analysis. They need to understand cash flow analysis. They need to understand capital and debt structure, legal issues, how to negotiate contracts, and things like that, because those things are just as important as knowing how to sell a car, just as important as knowing how to sell a finance contract, just as important as knowing how to sell service.
And I may even say that not understanding those things may bring your business down even faster than not understanding how to sell a car. Because you have a sales staff, you have a service staff, you have an F&I staff within your store, who's going to do all those other things, but it's up to you as the dealer principal to understand what's happening at a high level with that business, not with the dealership, but with that business. And so I think it's incumbent upon us to make certain that we educate the next wave of dealers on the business principles, first of all.
And then the second perspective in terms of education, it's educating young people about this business, especially minorities about this business. It's making certain that they understand it's more than just selling cars. It's being a pillar in your community. It's providing for or helping to provide for-- I don't know-- 50, 100 families who work for your dealership. It's about understanding that being in the dealership game isn't just wearing a plaid sport coat, trying to sell somebody a car that they don't want. It's about establishing a lucrative future for yourself. I don't think people understand how lucrative this business can be if done the right way.
And then the other reason why it's really important to train that piece of the population, Derek, is because if they know about what owning a dealership does, what it can do for others, what it can do for the community, they can become more intentional about entering the business. They can become more intentional about forming a plan to enter the business, as opposed to getting an idea about owning a dealership further on in their career when they're ready to own one and not really being prepared, not understanding the capital intensity, not understanding the business aspects.
If you tell them and you teach them very young about all this stuff, then when they do get older, when they do get to the point, they'll be well prepared financially, from a business savvy standpoint, and from a network standpoint. They'll be ready to go, and they'll increase their chances of success. So I think that's important.
And then also to touch upon another thing that Jay mentioned, is the relationship with the OEMs. I think that's key, and I think the OEMs can do a better job with establishing relationships with a broad spectrum of minority dealers. I will say, in my experience, and this is just my personal experience having worked with a OEM, you tend to do business with people that you have a relationship with. You tend to form relationships with people who you are comfortable with. And in my experience, minority dealers have not been put in that comfort-- going back to my analogy-- in that comfort funnel.
And so right, wrong, or indifferently, they don't get the first calls on the deal. They may get the second call or third call, but they don't get the first calls on a deal. And if minorities do get the call on a deal, typically it's with the same minority dealers who are already in the network. So I think the OEM field reps need to do a better job of getting out to know minority dealers in general, and then specifically, new minority dealers and new minority dealer candidates who are coming up on the landscape. And I think that will help with a lot of our issues.
DEREK COMESTRO: Yeah. Well said. So that kind of leads us into one of my next questions. And we talked about challenges. We talked about potential solutions. Now, really talking about, OK, where do we need additional support from our product partners and stakeholders in this industry. And, Jay and Mitch, you both spoke about the OEMs. And then, Mitch, you brought up the point in regards to helping from an educational perspective in terms of running the business on the back end from an accounting perspective, cash management, cash flow, legal perspective. How can some of the other partners help in that regard?
MITCH MITCHELL: So you want me to address that, Derek?
DEREK COMESTRO: Yeah, if you could. I mean, from my perspective, you know, I'm thinking certainly lenders can play a role in that. I'm thinking the dealer CPA firms in the industry can play a role in that. Is there anything else that comes your mind or that you're maybe already starting to work on where we can continue more focus and support from our product partners in the industry?
MITCH MITCHELL: Yeah. So I'll start out with the capital partners since we're on the line with a bank. I think we need to be more intentional about focusing programs specifically for minority dealers. And those programs don't necessarily-- well, we want them to be financial first. That's the first priority. So uncovering the specific issues that minority dealers face in terms of capital acquisition, in terms of understanding the capital structure. I don't think it's all financial. It can also be educational.
Again, going back to what I said earlier, when you talk about a debt-to-equity structure, why is it so important to make certain that your debt-to-equity structure is one-to-one or even less? Most people, the OEMs, they throw out that number, but they don't talk about why that's important. Well, if you've got a heavy debt load to service, whether you sell one car or 1,000, that debt's not walking away. You've still got to service that debt, so that puts you under a huge burden as a dealer.
So understanding things like that and educating our dealers, coming to-- not self-promoting here-- but coming to our membership meetings and educating our guys on things like that, educating them on things like estate planning and succession planning and things like that, so they have something to pass down to the next generation. Because if you don't understand that, if I pass away tomorrow and I don't have a will, I don't have trusts, I don't have those things built up, even if I pass it to the next generation, the government may tax the heck out of it. And by the time something is passed, it's 50% of what I thought it was. And so it's educating our dealers on things like that.
From the OEM perspective, we've already talked about building the relationship, but I think on a second tier, they need to continue to increase their dealer development programs. And with our OEM partner, Stellantis, they've started up a program again that-- it's coming along. It's not what it used to be, but it's coming along. And they're helping some dealers out.
But more importantly, what they're doing, they also have a program on the education side called the Future Dealers Program. And that program teaches dealers about business. That program teaches dealers about financial statement analysis and things like that, and it's mirrored after the training that dealers get from NADA. And so it's almost like a mini NADA Academy, if you will. So I think that's very good because I think our dealers need to do that.
And then support from an Association's perspective, I think from an Association perspective, we need to continue to aggressively fight for opportunities for minority dealers. We need to continue to make sure that we're brokering relationships for our minority dealers so that when we come together, they're allowed to really talk to, communicate with, these third-party stakeholders and senior executive decision makers within those companies, so that they understand the minority dealer perspective. And I think that's what we need to do as an Association.
And so with that, I won't hog all the airtime. I'll give the other dealers on the panel a chance to speak as well.
JAY GILL: Derek, if I could just briefly piggyback on Mitch's comments. So I think there's a misconception out there by financial institutions that minorities are riskier to lend to. But let me tell you, although minorities may not have the bigger net worth than majority dealers, but all across all OEMs and all brands, by far, minority dealers always outperform the majority of dealers in sales effectiveness and profitability. So why wouldn't a Bank of America and other institutions not want to develop a program to target that group of people, because it's a win-win situation for everybody?
DEREK COMESTRO: Well said. I think that goes back to my earlier comment that some of these challenges. Let's be honest, the cost of capital entry to business has always been an issue. It just has escalated obviously as blue sky values and profitability has increased, so it's even more of an issue today. And I do think it's very ripe right now for lenders and the industry to sit down and try to figure out what else in terms of metrics and mitigants we can look at besides just equity in network, Jay, so I think that's a very good point.
Shannon or Ken, anything to add in regards to where partners and stakeholders and industry can come and play a role?
SHANNON INUKAI-CUFFEE: Well, I think kind of what Mitch was saying about the education piece. I mean, part of it is on us to go out there and be part of all of those opportunities to really show up. The manufacturers offer so much training. There's so much out there for us as dealers and that we can offer to our employees as well. And as far as 20 groups and other state associations, all of those things that we can be part of, the minority associations, the national minority associations, I mean, there's lots of educational opportunities. And the business acumen is really the critical mass for us as dealers to be successful.
KEN THOMAS: Yeah. I want to say two major things that happened for me in my career in order to get me to this point was the Chrysler Minority Dealer Program that I went through back in 2014, and then joining NAMAD in 2015. Obviously, Mitch was head of that program when I went through it, but that was the educational part. I had been in dealerships my entire career, but no one really ever sat down with me and told me how to drill into the numbers and how to go into the expenses and how to really break a statement down and understand what's really affecting every one of these numbers on that statement.
So I went through that program, and it took me through every aspect of it. And it was partnered with NADA at that point. But then also, joining NAMAD is really what got me here, because that's how I really got-- even though I've known my partner for most of my life-- that's what got me introduced to him as a partner in the first place. Because suddenly, now, you're meeting other people that have the same interests as you. You're meeting with the banks. You're meeting with the OEMs. And so, now, that conversation is really happening where you can take it to the next level, instead of having that dream, which, is great.
Suddenly, somebody's putting it in front of what you can do to get to that dream. And this is a game plan for you of how we can get you there. And if I didn't have that support with NAMAD, it would have never really came through. Because it wasn't just-- it could have been Chrysler, it could have been General Motors, could have been Ford. I had the introductions and had opportunities with every one of them, and this is the store that I wound up falling into as the first store. But it took that network, the support network, to actually get me to that point where I could actually see the light at the end of the tunnel. So that's it for me.
DEREK COMESTRO: Thank you. So as we've gone through this project, we've had a lot of conversations offline preparing for this for the last couple of months. The one thing that occurred to me-- and I know it's not a solution for everybody because some people want to own their own deal, and I absolutely get that, but it might be a solution for others. And I guess where I'm going with this is, lenders, probably brokers, I know brokers, talking to them, we get calls a couple of times a week from outside money that wants to get into this space, whether it's PE, family offices, former athletes, doctors, lawyers.
And it just feels like there should be some type of connection, networking between minority dealers that are up and coming, whether they're general managers or even an existing owner of a store that really has the ability and business model to scale and scope to partner up with that money. And again, probably not a solution for everybody, but it just seems like there's a better way to connect those two parties. And I'm just curious if anybody has any thoughts on how best to do that.
MITCH MITCHELL: So I'll take a stab at that there. Being here at the Association, we have the advantage of, one, being in conversations with a lot of dealers, a lot of dealer candidates; two, we have a lot of conversations with OEM representatives and with the Chrysler Minority Dealers Association. Fortunately, I get to talk to the people at Stellantis who control the franchise decisions. And so we have a relationship with those guys. And then thirdly, we get to talk to people such as yourself. So we kind of have relationships with the full spectrum of people.
So to answer your question, I think if you came to us, if you came to me and you said, hey, Mitch, I've got this high net worth individual who really doesn't understand a lot about the retail automotive space, is looking to park some funds somewhere in a good investment in that area, do you know anybody that he might be able to speak to, I can then go through my Rolodex of dealers and candidates and recent calls that I've just gotten. I can talk to the OEMs and see what they have on the board, what buy sales they are aware of, and help you put that deal together because I do have all of those relationships.
Secondarily, I think you can partner up with the OEMs and let them know that you have high net worth individuals just like me, they have a lot of conversations with a lot of dealers, dealer candidates, who are looking to get deals as well. So I think that's probably a great place to start. In terms of Chrysler deals, now, Ken mentioned NAMAD. You can do the same at NAMAD on the national level that controls all the OEM relationships across the board. We're responsible for the OEM relationships nationally with Stellantis, but NAMAD has relationships with all the other manufacturers as well. So I think by utilizing, leveraging, the relationships that the associations have, I think that's a really good start.
DEREK COMESTRO: Yeah. that makes good sense. We'll do just that.
SHANNON INUKAI-CUFFEE: And if I might add, Derek, I think it just reiterates why as current dealers or whatever to continue those relationships with people like yourself and Bank of America and NAMAD and Mitch and having those ongoing relationships, that those are the people that you'll call. You'll call Jay first. Mitch will call me or Ken first. Developing and cultivating all of those relationships at all of those levels with our finance partners, with our OEM partners, with the trade associations, all of those things. Developing those strong networks are what help all of us succeed in our business and are able to help the next generation of dealers.
DEREK COMESTRO: Well said. Well said. Thanks, Shannon. All right. So we covered a lot so far. And I see some questions that are coming in, so why don't we move into our Q&A part of the event. And just a reminder for all our audience, if you have a question for today's panel or Mitch, you can submit that question by clicking on the Ask the Question tab on your screen. Seeing where we are in terms of time, I don't think we'll get to all of them, but if we don't get to your question, I promise that we will circle back with the panel and discuss the question with them and get back to you via email or phone call.
All right. So our first question is coming in, and this question is for our dealers panel. And the question is, what are some best practices you use to build out your personal network that help you open up doors or provide some sound device to help you succeed. And, Ken, I think you've kind of already talked about this in terms of NAMAD. So is there anything else you would add in terms of just developing that personal network?
KEN THOMAS: Well, I guess the first part of it is just being accessible in general is how you build that personal network. You never know who you're going to meet, but I look for every opportunity to meet someone new to begin with and just find out what they're about, make sure they know what I'm about. And it's amazing how you can find that you have so many things in common with different people that you never met before. And I guess part of that is just the salesperson in me anyway that makes me talk a lot.
But that's how you build that network. It's just through communication, through talking to different people, being accessible, listening to everyone else's questions, not being afraid to ask them questions as well. That's how you build it. But again, through NAMAD, CMDA, through all those networks, that's really-- you're in a buffet just filled with different people that you can really talk to, where you share the same interest. And they're interested in helping you. You can find interest in helping them.
That's where that network comes from. And every time I go to one of those conferences, I come back with a ton of business cards. And when I get done, I don't just throw them in my drawer. I actually use them. I actually do contact a lot of those people and build relationships with them over time. And that's one of those things that you just do through life. It's not something that's just going to happen because you just want to build a network today. It's something that you got to live and walk and talk every single day.
DEREK COMESTRO: Jay, Shannon, anything to add?
JAY GILL: Yes. You know, my philosophy is, especially for people that are just getting into business, find somebody that's doing it bigger and somebody who's doing it better. Because you'll be surprised the doors that will open up for you. And I always say this about life. Business is a contact sport, so the more people you know, the more people you network, the more doors that's going to open for you. 90% of all deals out there that are made is because of the relationship, the connection, the network.
Most of the stores that I were able to purchase in the past wasn't through OEM, wasn't through brokers. It was a personal contact that I had with an individual because that person can have a succession plan, second, third generation, kids didn't want to do it anymore. And you build that relationship. And sometimes, it doesn't come to fruition for years and years, but when it does, it pays off big. And that's the easiest way, and it's the cheapest way, too. And I think it's so, so important. Just in life, I think you've got to build relationships and have those contacts out there.
DEREK COMESTRO: Yeah. Shannon?
SHANNON INUKAI-CUFFEE: This is a people business, right. So I think it's about just engaging, not just in all the things that we do for business, but also in our communities, which I know all of us are active members at the Chamber of Commerce. I've been on the Boys and Girls Club board for 10 years to do all the different things that we do in the community, where we're engaging and building the networks, not just in the automotive business, but obviously outside and in our community with other businesses at large. As car dealers, I think we're good at that.
DEREK COMESTRO: Yeah. One thing I can say, having the luxury of sitting down with hundreds and thousands of car dealers over my career across the country-- and there's some big personalities that [INAUDIBLE] a lot of credit. But I will say this, almost all of them all give credit to somebody that helped them in their career and helped them get started in management and then ownership. I won't say 100%, but it's probably pretty close though.
So any young entrepreneurs out there that are looking to get into management, ownership, I would say, just to repeat what Shannon, Ken, and Jay say, put yourself out there. Get yourself out of your comfort zone. Expand that personal network, and you're going to find somebody along the way that's looking for somebody to help them and find that win-win.
All right. I think we have time for another question or two. So let's jump into this question. What advice would you give-- I'm sorry. Again, this is for our dealer panel. What advice would you give someone looking to become a dealer today and starting their career? So this last question talked a little about building that personal network, but maybe let's talk about someone who's in that general manager position or sales manager position, kind of in that next two to five years of really wanting to try to find an ownership stake in a company. So let's start with you, Shannon.
SHANNON INUKAI-CUFFEE: Well, I think let it be known. I know for in my role, if I have somebody that I know wants to advance, if I know what their goals are, if we're able to sit down, like Jay said, talk about that. What are your goals? And then we can help somebody. We can mentor them. We can connect them with the right people. We can help introduce them to people. And like you said, we all have that person that has helped us get to this place in our career. So if we can do that for the next generation, then that, I think, it's about leaning in and participating and letting somebody know that that's what you want to do.
DEREK COMESTRO: What advice would you provide, Jay?
JAY GILL: You say Jay? I'm sorry.
DEREK COMESTRO: Yeah, sorry.
JAY GILL: Yeah, so this is a very interesting topic. I always tell people, find your path or let your path find you. OK. I never wanted to be a car dealer. My education background is in engineering. But through necessity and through supporting my family, I knew that I was good at selling cars. So I'm not a big believer when people say follow your passion. Well, we all want to be an NBA star. We all want to be a magician. We all want to be an actor or actress. So follow what's in your path. And it's not always what your passion is.
And one of the biggest problems that I see with young people in our industry, and I think Shannon and Ken will concur, is I call them jumpers. And they get distracted so easily. The minute things start getting difficult and somebody offers them a little bit more incentive, a little bit more money, they jump. And I tell people, if you want to get somewhere, if you want to be successful, you need to stay. You need to find an organization, an individual that you believe in that's going to help you achieve your goals, and you stick there.
It's not always going to be great. It's not always going to be perfect. There are going to be times that are going to be difficult. But if you stick with that person through thick and thin, they will get you to that promised land. As I said earlier, I've helped three other individuals purchase their own dealership, not because those individuals were smarter than everybody else, but they had one thing in common: resilient, loyal, hard workers. And to me, as a business owner, as somebody that when I mentor other people, I put that on top of the list. Hard work and loyalty is very, very important to me.
So you got to find out that path, or if that path happened to find you accidentally, then just stick with it. Because otherwise, there's going to be so much other noise. There's only so much other distraction. And people jump, either from place to place or industry to industry, and they never really get anywhere.
SHANNON INUKAI-CUFFEE: I think, like what Jay is saying, if you're in our role, if we have somebody that comes to us and says, this is what I really want to do, I want to be a dealer, or I want to be the service manager or the parts manager or whatever it is, and they're washing cars or they're doing something else, I mean, I love that. That's awesome. That's a real opportunity for us to be able to know that we would have somebody in the store like, look, this is somebody that we can tag.
We already know that this is somebody that we can promote, that we can bring along. When the education opportunities come up, we go to that person and we say, hey, we have this, do you want to participate. Because it's hard to find talent. It's hard to find employees. So if we know that there's somebody already out there that's hungry to do this, then that's great for us. So you got to raise your hand and then, like Jay said, work hard.
KEN THOMAS: Yeah, I love everything you guys both just said. My first dream was that I was going to be a mechanic, and so that was all I cared about. I just wanted to work on cars. My very first job was right here at the dealership I own now, as a mechanic. And I did it for two years before I realized I hated it, but I still wanted to be in the car business.
And I went to the owner and said, hey, I really want to try being a service advisor. He let me do it. I did it for two years. I hated it. And I said, hey, how about if I try sales. He let me try sales, and I got into sales and I loved it. And that was where I started to excel. I had no idea that my path would lead me to owning a dealership, because all I thought at 18 was, I want to work on cars. I like getting my hands dirty. Until I did it, and then I realized I didn't like it anymore.
It takes someone that's willing to let you make those different moves. So having an owner or a dealer that was willing to say, hey, you come to work every day and you do what we ask you to do it, and I'm willing to let you try what you want to do, that's the first part. But then, the fact that, for me, that I was brave enough to actually go to them and say, hey, do you mind if I try this.
And that's one of those things that we are missing with the younger people right now. And they get frustrated, and they throw that wrench in the air and say, I'm done or whatever. And they're not willing to give themselves a chance to figure out really what they want to do. And like Jay said, they suddenly start hopping, hopping, hopping, instead of staying put and actually try and figure out where's my center. What do I want to do? And it doesn't matter which business we're talking about. That's for any part of life. They have to be able to commit themselves to something in order to figure out what they really truly want to do.
And that other part of that, the guy that wants to be a dealer, the other part we got to tell him is make sure you save money because it's going to take cash in order to actually get into this business and actually be able to sustain yourself. But it takes a full commitment all the way through in order to be successful in this business. And you've got to really have a passion.
DEREK COMESTRO: Great advice. First, I heard from Shannon, hey, let it be known. Let people know what your career aspirations are. And I heard from Jay, you've got to be persistent. You've got to persevere. You've got to be resilient, got to be adaptable. And Ken's point, financial. Start putting some money away because it's going to be a part of it as well. So great advice.
We're coming to the top of the hour here, so let me close by saying this. I first and foremost want to thank Mitch and the Chrysler Minority Dealers Association for their continued advocacy and leadership on this important topic. In addition, I want to thank our dealer panel, Jay, Ken, and Shannon, for their time today, sharing their experiences, their insights and ideas with us today.
While I have personally many takeaways from this experience over the last couple of months, the most important takeaway for me is, like with most continuous challenges and opportunities, there's a role for everybody to play in the solution. And more importantly, how much more effective we are when we collaborate our resources and ideas. And my hope, our hope, is that we use today as a starting point to do just that. I know one of the things we're doing internally right now is grabbing the team together and talking about some of the issues that were brought today in terms of additional support lenders can play when it comes to equity, when it comes to the credit side, when it comes to the training side.
So I think that's something we need to do, whether it's once or twice a year, or at least annually, sit down and say, how is your program working. What are the success stories? Where is it working? Where is it falling short? And make those tweaks and adjustment and continue to push forward.
Lastly, I want to thank all our audience today for attending, as well as encourage all to read our full report out on growing the minority dealer base that will be sent out shortly following this call. Thank you again. And have a great rest of your day. Bye now.
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