Diversity Driven by the Dollar
Visit Longo Toyota during the Saturday afternoon rush and you can hear the sound of money being made in today’s Southern California.
At three tables, salesmen Ray Cai, Nelson Temores and Butch Gabutina are closing deals with customers--in Mandarin, Spanish and Tagalog.
While they haggle, a receptionist sounds a plea, in English, over the loudspeaker: “Korean-speaking salesman to the floor, please.” David Ahn, who’s on the phone with a customer, hears the announcement and wraps up the call--in Korean--to greet the client waiting at the reception desk.
The El Monte car dealership has adeptly ridden the current immigration wave, deploying 60 sales people who speak more than 20 languages, from Arabic to Vietnamese. The strategy has helped Longo become the top-grossing car dealership in the state, and possibly the country, with about $350 million in annual revenues, said Chuck Bohon, editor of Ward’s Dealer Business. Longo won’t divulge its sales figures or ranking.
Other car dealers target the region’s growing base of immigrant and minority customers, but no dealer has done so on Longo’s scale. In addition to the rank-and-file staff, two-thirds of Longo Toyota’s managers are minorities, a record unmatched by many large corporations with aggressive affirmative action programs. Many of the supervisors are also immigrants.
The 500-employee car dealership is the kind of place that is overlooked in the raging debates over immigration and the evolving multicultural society. We sometimes forget, even as President Clinton urges Americans to confront racial divisions, that many Californians’ lives are integrated to a degree that would have been remarkable, if not unthinkable, a generation ago.
The change in day-to-day life is often missed by pundits and politicians who focus on urban racial conflicts. Some of the most dramatic changes, said Joel Kotkin, an economist at the Pepperdine Institute for Public Policy, are often hidden by the mundane camouflage of strip shopping centers and tract houses.
“The vast middle class of Los Angeles is made up of people who live in [places like] the San Gabriel Valley and is incredibly diverse. The real L.A. is where people buy things, make a living and do things.”
That “real L.A.,” Kotkin said, is a place where “There is a pragmatic, street-level multiculturalism that works remarkably well.”
California’s largest car dealership might well be a good place to see what that street-level view might mean for America. This is, after all, a nation of cars and immigrants--and California has the most of both.
Bounded by two superhighways and sharing a lot with a Home Base hardware mega-store, Longo Toyota looks every bit like a bulwark of suburban consumerism, and not at all like an agent of social change.
The look fits. Longo Toyota was integrated not by social engineering, but the invisible hand of the market.
The dealership has no affirmative action program. Its staff simply evolved to serve its customers, 80% of whom are Asian Americans and Latinos, said Greg Penske, Longo’s president and the son of former race car driver Roger Penske, who is head of a multibillion-dollar empire of dealerships and race tracks.
Influx of Immigrants
When the younger Penske, 35, joined the dealership in 1987, the San Gabriel Valley was in the midst of its own turnaround, from a collection of suburbs to a center of Asian and Latino immigration.
Although the immigrant influx prompted an early backlash among some residents and business owners, who pushed for things like bans on non-English signs, Penske saw a chance to boost sales.
Then 24 years old and Longo’s general sales manager, Penske began to build up Longo’s bilingual staff and place ads in the ethnic newspapers, radio and television stations that were rapidly growing in the Los Angeles area. “A lot of people in business don’t like change. I love change, “ he said. “I saw it coming and I went after it.”
Penske asked the handful of immigrants who were on his sales staff to recruit others they knew. At the same time, he blanketed ethnic media with advertising, commissioning radio, television and newspaper ads in Mandarin, Cantonese, Korean, Spanish, Farsi and Tagalog.
For an early television commercial, Penske even learned to mouth out “Welcome to Longo Toyota,” in Mandarin. The sight of Penske--a college jock whose close-cropped haircut makes him look like one of the 1969 Baltimore Colts--speaking Chinese brought a lot of chuckles from workers. But the ad was a hit with Chinese television viewers, and ran for nearly eight years.
Today, along with broadcast and print ads, Longo also has about 400 billboards placed from the Westside to the San Fernando Valley. In English, Spanish, Chinese and Korean, the yellow-and-black signs tout Longo’s used cars.
Multilingual ad campaigns are not new. Large corporations sell everything from beer to phone service with ads targeted to different ethnic groups.
But local businesses like car dealerships have tended to target a single immigrant community or two, with few setting up operations as ambitious and elaborate as Longo Toyota.
Jason Shea, who leads a sales team that focuses on Asian customers, points out that his 17-member squad can handle car shoppers from almost any Asian country. “I have four Koreans. I have Vietnamese. I have Chinese. They speak Mandarin, Cantonese, Shanghainese, you name it, I got it.”
Saleswoman Philomina Walker, an African immigrant, picked up extra sales by convincing the dealership to advertise in a local newsletter for immigrants from her home region of Nigeria.
Longo Toyota’s ability to sell to so many different ethnic groups puts it “definitely out front,” said Donald L. Kiethly of the automotive market research firm J.D. Power and Associates. “You can lead on something like this or be dragged along. This is the leading edge.”
By taking the lead in diversifying his staff, Penske capitalized on demographic shifts in Longo’s market. In the 12 ZIP Code areas in which it sells the most cars (all but one is in the San Gabriel Valley), Latinos make up 44% of the population, with Asian Americans making up the next-largest group at 31%, followed by whites (22%) and African Americans (3%), according to U.S. census estimates.
The dealership’s ability to survive by willingly reinventing itself, notes economist Jack Kyser, underscores that “Southern California is an ultra-competitive market. You have to change and innovate. If you don’t, you’re going to die.”
Although building a sales staff that is fluent in different languages has long been part of Longo’s business strategy, Penske said he did not make a special effort to promote minorities into management. “It never even came into my thinking,” he said.
Whether planned or not, most of Longo’s managers are now minorities and immigrants. At America’s largest corporations, minorities make up just 3% of managers, according to a 1995 study by the federal Glass Ceiling Commission.
Penske explains his dealership’s progress as simply the result of hiring good people and treating them fairly. Reverting as he often does to the language of sports, Penske insists that equal opportunity follows good day-to-day management. “You’ve got to block and tackle well, and do it consistently. We’ve just got to show that we don’t tolerate employees who put other people down.”
Others, however, believe Longo’s record of minority advancement is due to some unique factors.
With a customer base that is mainly minority and immigrant, those with bigoted attitudes would either have to know how to hide them or be punished economically.
Jules Weisberg, who was the second-leading salesman last year and has worked at Longo for 12 years, said that prejudiced salesmen turned off customers and eventually quit because they weren’t selling cars.
“We’ve had some whose attitudes haven’t been good,” he said. “But when that attitude controls your mind, you’re not nice to people. To sell cars you have to have a good frame of mind and be upbeat, or you’re not going to treat people well.”
Weisberg said that even though he speaks only a smattering of Spanish and Hebrew, he has been able to win over immigrant customers by being patient and polite. “If the market’s changing you have to change along with it, or change careers,” he said.
Unlike many jobs, a car salesperson’s performance also is easily measured. One either sells a lot of cars or doesn’t.
Longo managers are usually chosen from the ranks of the top sellers, leaving little room for bias or resentment from those passed over. “It’s a quantifiable business, there’s no need for politics,” Kenneth Rankin, Longo’s personnel manager said.
Employee stability is another advantage. In an industry in which stores often turn over half their sales staff in a year, only about 10% of Longo Toyota’s salespeople quit annually, general manager Ken Hunt said. Because of that retention rate, and the dealership’s practice of promoting from within, many of the minority and immigrant sales force brought in over the last decade are now managers.
Many employees, therefore, have minority supervisors who set examples for all. “I feel more at home in this environment [where there are black managers] than at a place where I am the only black,” said Walker. “I know that if I work hard and work smart I can be very successful.”
To help employees “work smart,” Longo Toyota runs an unusually rigorous mandatory training program for new salespeople. New hires spend two weeks rotating through numerous jobs. They work answering phones as receptionists, wash cars and attend classes taught by managers.
They are critiqued on everything from phone etiquette to their understanding of lease agreements, and must pass a 40-question written test before setting foot on the showroom floor. The training and test are offered only in English.
“I want people who can talk to every type of customer. I don’t want a Chinese salesman to have to speak only to a Chinese customer,” Penske said.
A Laboratory for Diversity
Longo Toyota may be a good example of how to manage diversity in an era in which affirmative action programs are under attack, said Frederick Lynch, a government professor at Claremont McKenna College. “It sounds like a lab for preference-free diversity,” he said. “Being culturally aware and sensitive under universal standards, with equal treatment and training is the way to go.”
The emphasis on setting tough standards while training employees to meet them mirrors another institution seen as a leader in race relations, the U.S. Army.
Charles Moskos, a Northwestern University sociologist and coauthor of a landmark study of racial integration in the Army, said that for civilian organizations to emulate the Army’s success, they must “spend more time training people, have standards that are clear-cut and be willing to devote extra resources to bringing people up to those standards.”
Even before training, many of the immigrants who work at Longo are unusually well-qualified for a field that has not traditionally required much formal education. They often have college or advanced degrees, but found their credentials unrecognized in this country.
“A lot of the people we’ve gotten in had very high technical expertise, training and education, but have had to start over,” Hunt said. “Over the years we’ve gotten a very highly educated group.”
Women Fail to Make Gains
For many immigrant professionals, the $80,000 a year average income for Longo salespeople secures the upper middle-class life for which they studied.
But in one area, Hunt admits the free flow of the market has not worked. Longo Toyota has only four women on its sales staff, and only one of its 15 top-level managers is a woman.
In an industry dominated by men, Longo’s reliance on word-of-mouth recruiting brings few women through the door. “We just don’t get women applying,” Hunt conceded.
Hunt said Longo needs to hire more women, but acknowledged that “we haven’t figured out how to do that yet. We can’t put an ad out that says we want women.”
Bending its usual practice of hiring experienced car salespeople, the dealership recently hired a woman who had sales experience but had never sold cars. Hunt said Longo is also considering recruiting women who are enrolled in a training program run by the Greater Los Angeles New Car Dealers Assn.
Like its move toward ethnic diversity, Longo’s goal of hiring more women is driven not by social forces, but economic ones. Hunt points out that according to market research, 70% of car purchasing decisions are made by women, either as direct buyers or in cooperation with spouses. “To succeed and keep going forward, we have to actively recruit [women],” he said.
