Thursday, September 11, 2008

Only Two Black Owned Gas Stations Left In MoTown...

Joe Brown and father Earl stand near gas pumps, already wrapped in plastic.

Gas Station Succumbs After 36 years

By Eric T. Campbell
The Michigan Citizen

DETROIT — High gas prices and competition are forcing Earl Brown and his son, Joe, to close their northwest Detroit BP station after 36 years. Their station’s demise leaves only two African American owned gas stations in the entire city of Detroit.

It is not the first time Earl has been forced out of business. Brown operated a service station in 1962 at the corner of Warren and the Chrysler Freeway where the majority of surrounding businesses, including gas stations, were Black-owned and thriving. Then the freeway construction began and demolished what was known as Hastings Street and all the businesses that thrived there.

In 1972, the Browns leased the service station on the southeast corner of Livernois and 8 Mile. It was owned first by Standard Oil, then Amoco and finally British Petroleum. In April of 2002, Earl and Joe Brown established independent ownership of the BP and the struggle to compete in an increasingly imbalanced industry began.

According to Joe Brown, over the last several years gas has gone up from $17,000 per load (a ‘load’ is defined as between 10 and 13 thousand gallons of gas) to around $40,000 per load.

Commuters will interpret $4 gas as high profits for the stations that sell it. But Brown says that in most cases its tougher for sellers to turn profits as the price of a barrel of oil skyrockets. Every station can’t negotiate the same supply agreement and, in an economic climate that sees gas prices changing daily, stations run by gas distributors operate with a definite advantage. They can order and receive the gas quicker—before the price goes up again.

“We may order a load and it goes up in price before it gets there,” Earl told the Michigan Citizen.

“It’s no fault of the distributors themselves, but it makes it an unfair playing field,” adds Joe. “You’ve got over 50 years of experience here, we’re not getting put out because we didn’t know what we’re doing.”

The Browns’ BP sat on a busy intersection, with gas stations on two of the other corners, while the politics of petroleum sales and price watching played out every day.

Joe says he’s witnessed operators employ dubious and misleading bookkeeping practices in order to turn a profit. But it was their ability to keep prices lower for the sake of a larger share of the market that was the most damaging.

“Its tough when you have your competition selling gas at a loss,” Joe says.

Because of the lessening profit margin associated with the selling of gas, the stores that are connected to the gas stations are becoming more and more important, according to Earl Brown. And if your community doesn’t come in and buy products other than gas, you’re not going to survive.

“You have to have people buy something inside the store to make a profit,” Earl says. “The store is what keeps everybody in business.”

In these trying economic times, the Browns have also witnessed consumers trade community loyalty for any amount of savings on gas.

Arab proprietors now overwhelmingly own and operate gas stations in Detroit. Earl says that every aspect of gas station operation in Detroit—light installation, cooler sales, the building of service stations—is run by the Middle Eastern community, most of whom don’t live in the city.

James Robinson, an ex-lieutenant with the Detroit Police, owns one of the last two surviving Black owned gas stations in Detroit—the Mobil station at Woodward and Forest. He says you have to go back to the oil shortage of 1974 to document the beginning of the loss of Black owned gas stations. Black owners were forced to either buy or sell businesses, mostly to residents of Middle Eastern descent, that they had leased for years.

“There’s no reason, in a city that’s 87 percent Black, that the Browns should be going out of business,” Robinson told the Michigan Citizen.

“If you keep your money in the community, you keep your community,” Joe Brown laments.

As the independent gas outlets are squeezed out of business, Joe predicts that the stations that are left will have to hike prices even more to make gas profitable again. He says the state has little incentive to control prices—Michigan has one of the highest gas taxes in the nation.

The devoted neighborhood residents still patronizing the Browns’ BP are shocked and dismayed to hear the news that the property will be on the auction block this Thursday. Joe and Earl, who is almost 79 years old, have been working seven days a week for the past three years trying to stay in business. Now they’ll have to watch someone else run it while they look for employment.

“We’re praying somebody Black gets it,” says Joe.

The 8 Mile and Livernois BP and Food Shoppe will be sold at auction this Thursday, downtown at the Coleman A. Young Municipal Center.

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