Farr, Mel

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Mel Farr
1944–

Football player, automobile dealership owner

Melvin Farr was born on November 3, 1944, in Beaumont, Texas, the younger of two sons of Miller and Dorthea Farr. Dorthea Farr did domestic work; Miller Farr drove a cement truck and sold used cars to provide a second income. In 1960, he had opened a car dealership, Farr's New and Used. Both sons, Miller Jr. and Melvin, worked part-time in their father's used car business. Melvin, later known as Mel, and Miller Jr. helped their father look for old cars that could be repaired and sold for a profit. They would clean cars and make an initial showing of the cars to customers while Miller Sr. handled the actual sales. From his father, Mel gained experience in running a car dealership and the belief that determination and hard work allow people to overcome obstacles and succeed.

A versatile athlete, Farr graduated from Beaumont's Herbert High School in 1963, receiving All-State honors in track and football and All-District honors in basket-ball. Awarded a scholarship to UCLA, Farr was an outstanding tailback and was named a consensus All-American in his junior and senior years. He was inducted into the UCLA Hall of Fame in 1988. In 1967, Farr was the seventh player chosen overall in the National Football League draft and the first choice of the Detroit Lions. He was given a three-year $94,000 contract. Outstanding in his first season, he was named NFL Rookie of the Year and Offensive MVP of the Year. Farr's assumption that his first year success would enable him to earn a higher salary met with the Detroit Lion's flat refusal to negotiate. Farr's agent was unable to attract contracts for him to endorse commercial products, though he did receive $500 as Rookie of the Year.

Farr had an exceptional record with the Lions, becoming a top all-time scorer with thirty-six career touchdowns. Though an injury caused Farr to miss half of the 1968 season, he was again named MVP and chosen for the Pro-Bowl. In 1969, Farr was named co-captain of the Lions and in 1971 was again selected for the Pro-Bowl. In Farr's last season, 1973, his older brother, Miller Farr Jr., formerly an all-star in the American Football League, also played for the Detroit Lions. Traded to Houston in 1974, Mel Farr instead chose retirement from professional football.

While hospitalized at age twenty-three in his second season, Farr realized that professional football might not be a long-term career or make him rich. He began to plan for a business career after football. Farr entered Ford Motor Company's dealer development program. Working in football's off season, Farr sought to identify blacks who could qualify as future Ford auto dealers but could only find a handful, none of whom had the needed financial resources. After discussion among top executives, Ford Motor Company started a black dealer development program. Farr spent several years in the program, learning the details of managing a dealership, including methods of cost accounting for each vehicle in the inventory. It was necessary to keep track of all costs associated with acquiring, maintaining, and selling each vehicle in order to determine the necessary selling price to keep the dealership profitable. Farr continued playing football in order to save enough cash to purchase an auto dealership. He also enrolled in evening classes at the University of Detroit, completing his bachelor's degree in political science in 1971.

Farr married Mae R. Forbes with whom he had three children, sons Melvin Jr. and Michael, and daughter Monet. Both sons later played football at the University of California, Los Angeles, and in the National Football League. Farr remained married to Mae for over thirty-five years, sharing interests in tennis, golf, and travel. Farr was divorced in 2002, and in 2004, he married Linda Johnson Rice, president and chief executive officer of Johnson Publishing Co., publisher of Ebony and Jet magazines and owner of the Ebony Fashion Fair cosmetic line and touring fashion show.

Becomes Automobile Dealer

Farr became an auto dealer in 1975, when he formed a partnership with John Cook, a retired dealer with whom Farr worked while in the dealer development program. Cook and Farr invested $40,000 each to purchase a Ford franchise in Oak Park, Michigan, a small town on the northern border of Detroit. When Cook-Farr Ford, Inc. opened for business, Farr took sales as his primary responsibility while Cook was in charge of the finances. In 1977, Black Enterprise listed Cook-Farr Ford in its top 100 companies, having $9.8 million in gross income. Its 1978 revenues of $14.6 million made it sixteenth on the list of the largest black-owned businesses in the United States.

However, problems loomed. The partners disagreed about how to run the business with Farr wanting a bigger and wider marketing approach than did Cook. Farr bought Cook's share of the business in 1978 and found out that the dealership had serious financial problems.

In 1979 an economic recession occurred in the United States due to the Iranian hostage crisis and rising oil prices. The situation caused long lines at gasoline stations and spiked the public's desire for fuel efficient cars, few of which were available from Ford automobile dealers. While many automobile dealers, black and white, went out of business, Farr took aggressive and innovative actions to survive. Farr reduced his employees by half and did both sales and janitorial work. Needing loans to keep his business operating, Farr energized other blacks to start the Black Ford-Lincoln-Mercury Dealers Association in order to lobby the federal government for loans to black auto dealers. Successful, Farr borrowed $200,000 each from the Small Business Administration and Ford Motor Company. Farr also was a co-founder of the National Association of Minority Auto Dealers, serving for a time as chairman of its board of directors.

In addition, Farr initiated a television advertising campaign, using his football persona, "Mel Farr, Superstar," to attract customers to his dealership. Lacking money to pay an ad agency, Farr planned, wrote, and appeared in each commercial, even using his own video camera to film them. Tough, low-budget, and amateurish, the commercials appealed to the public. Farr added a red cape to his business suit and imitated Superman flying through the air. His message was "Mel Farr to the Rescue," combating high prices, guaranteeing payment for any vehicle traded in, regardless of condition, and offering a "Farr Better Deal." Farr's business rebounded and the commercials became a trademark and a key to his long-term survival and to his unusual success as one of a few who owned multiple dealerships.

Chronology

1944: Born in Beaumont, Texas on November 3
1967: Drafted by the Detroit Lions
1968: Named NFL Rookie of the Year and Offensive MVP of the Year
1971: Completes B.A in political science, University of Detroit
1974: Retires from professional football
1975: Purchases Ford franchise in Oak Park, Michigan, with John Cook
1977: Cook-Farr Ford listed as one of the Top 100 Companies by Black Enterprise
1978: Buys out Cook's share of the dealership
1988: Inducted into the UCLA Hall of Fame
1990: Establishes Triple M Financing Co.
1992: Named the Black Enterprise Auto Dealer of the Year
1999: Acquires a loan of $36.5 million
2000: Begins selling his Ford and Lincoln-Mercury franchises when his loan payments fall behind
2002: Divorces Mae Forbes
2004: Marries Linda Johnson Rice

As Farr's success and revenues grew in his Oak Park location, he wanted to acquire ownership of franchises in other locations and become the largest African Amer-ican business owner in the nation. Using loans from banks and from Ford Motor Co. credit department, Farr acquired auto dealerships in five states; most of them were either Ford or Lincoln-Mercury dealerships, located in Michigan or Ohio. In 1986, Farr purchased a Lincoln-Mercury dealership in Waterford, Michigan, and named his brother Miller Jr. its general manager. Also in 1986, he acquired a Ford franchise in Aurora, Colorado, but he sold it after thirty months because it was too far away for him to supervise adequately. After six years of effort, in 1989, Farr was awarded a Toyota franchise in Bloomfield Hills, Michigan. In 1993, he added Mazda and Volkswagen franchises to this location. Farr bought a Ford dealership in Fairfield, Ohio, a Cincinnati suburb, and appointed Melvin Jr. the general manager. Farr also acquired Ford dealerships in Grand Blanc, Michigan in 1993, and in Houston, Texas and Baltimore, Maryland in 1996. A Lincoln-Mercury franchise was bought in Dayton, Ohio in 1993. In 1996, Farr opened a Hyundai / Suzuki / Kia dealership and a Used Car Superstore on thirteen acres of land in Ferndale, Michigan.

Wins High Praise

Accolades followed. Black Enterprise named Farr the BE Auto Dealer of the Year in 1992, citing his ability to withstand a 1991 recession with a 16 percent increase in sales to $106 million. According to the magazine, Farr's companies had "the sixth-highest volume of any Ford dealer in 1991 and ranked second in sales in Escort and Festiva economy cars." Farr's 1991 sales placed him fifth among black dealers, but by 1998, Farr Automotive Group was number one among African American auto dealers. That year, Crain's Detroit Business declared Farr's automotive group "the 19th-largest privately held corporation in metro Detroit." A year later, Black Enterprise listed Farr's company as the number one enterprise among all African American-owned companies in the United States with gross sales of $596.6 million in 1998.

Throughout his business career, Farr had shown an unusual willingness to take risks, many of which brought him considerable success. In the 1990s, Farr decided, first, to tap the largely underserved market of those with poor credit, and, second, to open a nationwide chain of used car superstores to serve the so-called "sub-prime" market. Triple M Financing Co. was established by Farr in 1990 to support and expand his businesses. Specializing in high-risk auto loans, Triple M had eighty employees in 1999, over 12,000 clients, and almost $50 million in outstanding loans, according to the Michigan Chronicle. Farr sought to greatly increase the financial resources of Triple M and the number of used cars he could sell nationwide. Triple M employees were trained to monitor their clients' payment record closely. Those whose payments were two days late received phone calls. Vehicles were repossessed if payments were two weeks late. In 1999, Farr began adding to each used car an electronic device that would automatically prevent the car from starting if the customer was not up-to-date with payments. Many praised Farr for enabling people with low incomes to have transportation while some complained about high interest rates and the electronic device, claiming it had shut the engine off while they were driving in traffic. In 2000, Farr settled lawsuits about the devices by issuing coupons worth $200 to 1,500 customers, according to Black Enterprise. Farr's company sponsored workshops on credit and budgeting personal finances to make his customers better consumers.

Farr's efforts to expand his sub-prime auto loan business led to the collapse of his new car dealerships. Farr sought a large loan from a consortium of Wall Street investors to expand his used car business to customers with sub-prime credit. With the help of civil rights leader Jesse Jackson, after fifteen months of negotiations, Farr was given a loan of $36.5 million in August 1999 with 4,500 signed leases of his high-risk credit customers as collateral that the loan would be repaid. By January 2000, the financial arrangements had proved unfavorable to Farr. He was not collecting enough money from his customers to keep up payments to either the Wall Street investors or to Ford Motor Co. Ford Motor Co., stating it wanted to emphasize selling new cars, pressed Farr to sell his Ford and Lincoln-Mercury franchises, all of which were sold between 2000 and early 2002. Eventually, Farr had to dispose of his foreign car franchises also, leaving him with his Triple M Financing Co, his used car superstore in Ferndale, Michigan, and dreams of expanding it into a chain of superstores.