It Takes More Than Desire to Be a Car Dealer Trainee
In an effort to recruit and develop more minority car dealers, Detroit’s Big Three auto makers all have extensive training programs. But the challenge, auto makers say, is to know what personality traits and experience make for a good dealer and to find individuals to match.
All three companies offer paid, 18-month courses that include some classes plus temporary jobs in the parts and service, used car, truck and new car sales divisions of current dealerships. The courses last 18 months at General Motors and Chrysler and 24 months at Ford. Trainees make $28,000 to $36,000 a year at Ford.
One major entrance requirement: money. GM demands an applicant have $60,000 in personal funds to invest in a dealership, while Ford and Chrysler each demand $50,000. The applicant cannot borrow the money. The car makers then help graduate trainees buy their first dealership by lending up to seven times the graduate’s funds.
Finding minority applicants with both ready cash and the entrepreneurial ambition needed to survive as a car dealer can be difficult, directors of the Big Three programs said.
No Guarantee of Success
At the 16-year-old program run by General Motors, 22 of the 174 graduates have gone under as dealers. About 90 are still in business, while the rest never got a franchise or have sold theirs, said Joseph J. Vasquez, director of dealer business management and development. About two-thirds of the failures graduated during the program’s first four years.
“We really didn’t know how to screen guys . . . we didn’t know where do you get candidates,” he acknowledges. GM now interviews training program applicants extensively in Detroit, while Ford even flies them to a Florida center for a day and a half of psychological and aptitude tests.
GM looks for aggressive men and women who already have done well in other fields, particularly sales, Vasquez said. The company is not interested in, “a guy who’s gone to work for a company and has had one promotion in 12 years,” he said. GM currently has 14 trainees, compared to 21 at Chrysler and 40 at Ford.
Graduating from a trainee program is no guarantee of success. The best dealership territories tend to be handed down within families, and seldom come on the market. As a result, 28 of the 36 minority dealers currently financed by Chrysler are in so-called open points--areas where the previous dealer failed or where the market is so small that it has never been tapped before.
Even then, a trainee can wait months for a dealership. “Some have been in the training program quite a while waiting for a store,” said Joseph J. Shady, Chrysler’s director of marketing investment and dealer development. “Some get impatient and move on.”
