FCA to Co-Sign Loans, Advance Diversity
Fiat Chrysler Automobiles (FCA) recently rolled out a program that would help students refinance loans. They partnered with CommonBond for Business to offer a way for salaried employees to refinance their student loan debt.
And, FCA is also working toward its commitment to be a diverse company by offering to co-sign loans for all those interested, including minority leaders, to become dealership principals. Chrysler Capital and Ally Financial provide startup funding in this program—Dealer Market Investment Program.
Other OEMs have programs that offer capital, but FCA wanted to offer a solution where they give owners access to capital but it would be 100 percent their own venture, says Bashar Cholagh, senior manager of U.S. market representation, dealer network diversity and technologies.
FCA will provide 85 percent of the funds needed to cover a dealership’s working capital through low-interest loans, while the potential dealer covers the remaining 15 percent. For the real estate investment, Chrysler Capital and Ally Financial will provide 80 percent of the funding, FCA will provide 15 percent, and the potential dealer will cover the remaining 5 percent.
Currently, FCA is in the process of pilot deals and has approval to do 10 over the next few years, he says.
The company has been meeting with minority and general manager candidates over the last four years. Right now, there is one dealership, Northland Chrysler-Jeep-Dodge-Ram, active in the program.
The dealership is located in Detroit, and since the minority leader took over, Cholagh says sales at the dealership have increased by 80 percent. With the deal complete, Northland is now the only African-American owned Chrysler-Jeep-Dodge-Ram dealership in metro Detroit.
Inside the Program
To choose an ideal candidate, FCA will place the candidate through a three-day assessment program. The program simulates the person running a dealership over five-months. He or she is measured on cash flow problems, customer service, inventory issues and dealing with factory issues. FCA hands a report card back to the person at the end of the assessment.
Over the last four years, FCA has grown its minority dealership representation by 20 percent.
“We’ve been the fastest growing OEM in promoting diversity over that time frame,” Cholagh says.