NAACP 2005 Industry Surveys Give Five Major Industries “C” and “D” Grades

Latest Survey of Lodging, Telecommunications, Financial Services, General Merchandising and Automotive Industries Shows Average to Minimal Progress

Milwaukee - The National Association for the Advancement of Colored People (NAACP) today released the 2005 Economic Reciprocity Initiative (ERI) industry report cards grading major corporations in lodging, telecommunications, financial services, general merchandising and automotive for the year 2004. The five industries earned average and below average scores. The (C) and (D) grades, released during the NAACP's 96th Annual Convention in Milwaukee, reflected for most industries a slip in 2004 within the areas of employment, vendor development, advertising/marketing, charitable giving and investing/ franchising.

NAACP Interim President & CEO Dennis Courtland Hayes said: "The report cards are a good indicator for the NAACP to measure efforts or the lack thereof of major corporations in the areas of hiring, promotion, procurement, philanthropy and marketing. We will urge our members and partnering organizations to not patronize businesses and corporations that do not provide meaningful opportunities in the five industries mentioned. The main purpose for the report cards is to ensure a more enlightened consumer base."

Lodging

The lodging industry in the 2004 report cards earned an overall grade of (C), marking no real improvement from the 2003 report card. Wyndham, Hyatt, Adams Mark and Marriott each scored the highest with a (B-). Intercontinental Hotels Group, Loews, Choice Hotel and Omni each scored a (C+) followed by Hilton and Starwood scoring a (C). Cendent and Carlson scored a (C-) and Best Western International, Inc. scored the lowest with a (D) for the second year, denoting a rating between poor and needs improvement.

Since the first review in 1996 there has been little overall improvement in the lodging industry. In that year, the highest score received in the lodging industry was a (C+). This compares to a (B-), the highest score received in 2004.

The performance by 13 hotel chains surveyed for 2004 also showed minimal improvement in the five key areas.

In employment, the industry performed at an average grade of (B-) in 2004. African Americans served on the Board of Directors in eight of the 10 companies surveyed; a decrease seen over the past year. Although the industry continued to show a willingness to explore incentives and establish creative programs to increase African American property ownership, almost no change was recorded overall in the numbers scoring an average grade of (D) in property ownership.

Most companies have established programs to increase vending relationships with minorities; such efforts have yet to translate into actual minority business contracts. The industry scored an average grade of (D+) in this category, with only four out of the 13 companies surveyed scoring higher than a (C-).

Although the lodging industry spent hundreds of millions of dollars in advertising and marketing it scored an average of (C).

Overall the industry scored a (B) in philanthropic giving to African American organizations and programs for the fiscal year 2004. Eight out of 13 companies scored an (A.

Telecommunications

Telecommunications is the second longest surveyed industry and one of the largest industries in the United States. Top providers of long distance, local and cellular telephone services and regional operating bell companies that are Fortune 1000 telecommunications firms with revenues of 1-75 billion dollars were graded.

The 10 telecommunications companies surveyed averaged a (C) with advertising/ marketing and vendor relations still presenting the greatest challenges for the industry overall. Bellsouth, Verizon, and SBC each received a (B). Cincinnati Bell and AT&T each received a (B-). MCI, Alltel and Sprint received a (C+). Quest received a (D+) and Excel, who has not responded in four consecutive years, received an (F).

Seven out of 10 telecommunication companies surveyed used African American advertising agencies. The advertising/marketing area overall averaged a (C-).

Although most companies have established programs to increase vendor relationships with minorities, such mechanisms have yet to translate fully into actual minority business contracts. The telecommunications industry overall scored a grade of (D+) in this category.

In employment, telecommunications industries performed at an average of (C+). African Americans are represented on eight of the boards of directors out of 10 companies graded. Only two out of the 10 companies have more than one African American on their board.

In service deployment, the industry is performing at an average grade of (B-). Seven out of 10 companies received an (A) for their philanthropic programs. Overall the industry is performing at an average grade of (B) for this category. The industry showed a willingness to deploy new services to African American markets when deploying additional services to the general marketplace and showed good in-kind community support.

Financial Services

Eleven full-service, large commercial financial services institutions surveyed during the past year earned a (C). This year, Wachovia Corporation ranked first overall with a grade of (B). SunTrust Banks, Inc. earned the second highest overall score, (B-), the same as the previous year.

The financial services industry was first surveyed in 2000. Collectively, the commercial banking industry received a grade of (C). Companies with revenues of at least $5 billion, including full-service, large commercial and branch banking were surveyed.

In employment, financial services companies earned a (C). African American representation on the board of directors existed in all 11 of the companies surveyed. Five of the companies had more than one African American on their board.

Six out of the 11 companies surveyed used African American advertising agencies. The industry overall averaged a (C-). Two of the companies scored higher than a (B-), Key Corporation and Wachovia Corporation.

In vendor relationships the industry overall scored an average of (D+). Wachovia scored a (B) and SunTrust scored a (C).

Laws mandating community reinvestment and fair lending led to positive results. The industry overall scored an average of (A-). Every company surveyed ranked a (B) or better with seven out of 11 companies scoring an (A) for their activities in servicing communities.

Philanthropic giving to African American organizations and programs in fiscal year 2004 averaged a grade of (B). Four out of the 11 companies received an (A).

General Merchandising

This industry was first surveyed in 2003. Three companies received a grade of (C); Federated Department Stores, Wal-Mart Stores, Inc. and Sears, Roebuck and Co. May Department Stores Co., received a grade of (C-).

Only six out of the 11 companies that were asked to complete the NAACP survey complied with the request. If the companies refuse to complete the survey, the NAACP will ask consumers not to patronize their establishments. Dillard's, Inc., J.C. Penney Company, Inc., Kmart Corp, SAKS Inc., and Target Corp. refused to respond.

Companies with revenues of at least $6 million and with 40,000 employees or more that served diversified neighborhoods were surveyed.

Collectively, the general merchandising industry received a (D) for activity in 2004. In employment, the industry performed at an average grade of (D). There was one African American serving on boards of directors in six of the 11 companies.

In advertising and marketing three of the companies surveyed are used African American advertising agencies. The industry overall scored an average grade of (D-). Nordstrom, Inc. earned a (D+) and Kohl's Department Stores earned a (D).

In community reinvestment, the industry earned a (D). May Department Stores Company and Nordstrom, Inc. received a (B+) in this category.

Philanthropic giving to African American organizations and programs for 2004 earned an average of (C-), Federated Department Stores, Inc., Sears Roebuck and Co., and Wal-Mart Stores Inc.

Automotive

The final industry is automotive, first surveyed in 2003.

Companies that generate 30 million dollars or more in revenue per year and have 300 or more dealerships located in the United States were surveyed. Overall, the automotive industry received a (C) for activity in 2004.

Ford Motor Company and DaimlerChrysler Corporation earned a grade of (B-).

Additional grades include: General Motors Corporation (C+), Nissan North America, Inc. (C), Toyota Motor North America, Inc. (C), BMW (C), Honda (C), Volkswagen of America (D), Hyundai (D) and Mitsubishi Motors North America, Inc. (D).

In vendor relationships this industry scored a (D). Only two companies out of the 10 scored higher than a (C-). Concerning dealerships, the industry earned a (C-). Only one company surveyed scored higher than a (C+), Ford Motor Company.

In charitable giving, the industry received at an average grade of (B). Three out of the 10 companies earned an (A) for their philanthropic programs, BMW Group, DaimlerChrysler Corporation and Ford Motor Company.

Founded in 1909, the National Association for the Advancement of Colored People (NAACP) is the nation's oldest and largest civil rights organization. Its half-million adult and youth members throughout the United States and the world are the premier advocates for civil rights in their communities, conducting voter mobilization and monitoring equal opportunity in the public and private sectors.

CONTACT: NAACP Office of Communications 410.580.5125

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