Ford Sets Goal To Eliminate 600 Dealerships

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Thread: Ford Sets Goal To Eliminate 600 Dealerships

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    Ford Sets Goal To Eliminate 600 Dealerships

    By DONNA HARRIS | AMY WILSON | AUTOMOTIVE NEWS


    AutoWeek | Published 09/19/06, 8:25 am et


    Ford Motor Co. wants to eliminate as many as 600 Ford, Lincoln and Mercury dealerships over three years through its store consolidation plan, sources close to the plan say.

    Ford is quietly offering some dealers as much as $300,000 in financial aid to encourage dealership mergers and streamline its bloated retail network, dealers say.

    On Jan. 1, Ford Motor had 4,396 U.S. dealerships, according to Automotive News' annual dealer census. Two sources familiar with the plan told Automotive News that the company seeks to trim its retail network by about 600 stores, largely by persuading weaker dealers in some metropolitan markets to sell out to stronger ones.

    Dealers say Ford is offering cash selectively to some dealers in 18 large metropolitan markets, primarily in the Northeast and Midwest. But they say the $100,000 to $300,000 Ford is offering is not enough to compensate for their investments in their franchises, such as dealership upgrades.

    Nor would those amounts compensate for the distressed price another Ford dealer likely would pay for their franchises, dealers say.

    'Chicken feed'

    "It's chicken feed," says a Lincoln-Mercury dealer who asked not to be named. "Ford doesn't appear serious."

    As Ford told of big cuts on Friday, Sept. 15, in jobs and operating costs, Cisco Codina, the company's group vice president of North American marketing, sales and service, briefed dealers about the consolidation plan during a teleconference.

    But Codina did not speak of a formal dealer aid package, nor did he offer new details of the company's plan to "right-size" its dealership network. Codina could not be reached for comment later Friday.

    "I know this is a sensitive issue," Codina told dealers during the broadcast. "And it's primarily a metro dealer issue, not so much single-point and smaller points."

    Ford has prepared a war chest to help promote dealership closures, an inside source says. The aid is likely to be tailored to the circumstances of each region and each proposed deal. In addition to cash incentives, Ford also seeks to speed up deals by providing money to buy back vehicle and parts inventories, sources say.

    Voluntary effort

    Codina told the dealers that Ford wants to pursue consolidation "on a voluntary basis."

    "We understand what's at stake here, and I have no interest in having an adversarial relationship with any of you," he said.

    The Ford national dealer council will meet the week of Oct. 2 in Dearborn, Mich. Council Chairman Tom Addis, dealer principal of Lake City Ford in Coeur d'Alene, Idaho, says he expects Ford to disclose more details of the consolidation plan then.

    The October meeting replaces an August meeting that Ford canceled abruptly after Automotive News first reported Ford's plan for dealership consolidations in 18 U.S. markets. The consolidation markets include New York, Los Angeles, Chicago, San Francisco, Detroit, Boston, Philadelphia and Pittsburgh.

    Despite the massive personnel cutbacks that Ford revealed Friday, Codina told dealers that "you can expect a very high level of service -- we will be available to you." Codina also insisted that Ford would "stay focused on our business."

    But dealers counter that Ford's employees are too busy worrying about their jobs to concentrate on dealers' needs. Says a Ford dealer: "There's a lot of fear behind the cubicles."

    Erin Robinson contributed to this report
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    Re: Ford Sets Goal To Eliminate 600 Dealerships

    As always Ford isn't willing to go the whole distance. Either buy them out or figure out another strategy.

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    Re: Ford Sets Goal To Eliminate 600 Dealerships

    Jeez, I hope they shut down Robin Ford in Glenolden, PA just based on the fact that their TV ads are so freaking annoying.

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    Re: Ford Sets Goal To Eliminate 600 Dealerships

    Despite the massive personnel cutbacks that Ford revealed Friday, Codina told dealers that "you can expect a very high level of service -- we will be available to you." Codina also insisted that Ford would "stay focused on our business."

    Does this mean the people they canned were not needed in the first place, or are they expecting too much from those that are left?

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    Re: Ford Sets Goal To Eliminate 600 Dealerships

    Quote Originally Posted by IROCNROL1
    Despite the massive personnel cutbacks that Ford revealed Friday, Codina told dealers that "you can expect a very high level of service -- we will be available to you." Codina also insisted that Ford would "stay focused on our business."

    Does this mean the people they canned were not needed in the first place, or are they expecting too much from those that are left?
    both - as with GM and other bg corps - there is always too much Fat - especially in the MANY layers of management - why should there be 15 people between the CEO and th edesigner engineer?

    but of course those that stay will have to work harder.

    Igor

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    Re: Ford Sets Goal To Eliminate 600 Dealerships

    Quote Originally Posted by unkillsam
    Jeez, I hope they shut down Robin Ford in Glenolden, PA just based on the fact that their TV ads are so freaking annoying.
    As much as i would Like see that , they have been around 25+ years as a exclusive ford dealer. If they get knocked off it should be because they always have a poor selection of just about product. Including Mustang GT.

    I bought my first white GT there in 1987, I had My choice of white or white. I think it was about $11800 New.

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    Re: Ford Sets Goal To Eliminate 600 Dealerships

    Quote Originally Posted by Dynamic Doug
    As much as i would Like see that , they have been around 25+ years as a exclusive ford dealer. If they get knocked off it should be because they always have a poor selection of just about product. Including Mustang GT.

    I bought my first white GT there in 1987, I had My choice of white or white. I think it was about $11800 New.
    I figured that they would just roll Robin and Springfield Ford together because they are within 2 miles of each other.

    Is it just me or do most Ford dealerships suck.

    When the SVT Focus came out, I couldn't find 1 dealer that would let me test drive the car. One salesman even told me that they lost the keys to the car and offered to let me test drive a base model. Right, they lost both sets of keys

    Well guess what Ford, I waited and saved my money and purchased a Cobalt SS supercharged and you lost a sale. BTW, that was one of the few Ford's I had ever considered buying, that and the Marauder. I dont like Mustangs at all.

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    Re: Ford Sets Goal To Eliminate 600 Dealerships

    Idk maybe they have to many dealerships.. but it seems like it cost so much to get rid of them

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    Re: Ford Sets Goal To Eliminate 600 Dealerships

    "The blood-dimmed tide is loosed, and everywhere the ceremony of innocence is drowned;
    The best lack all conviction, while the worst are full of passionate intensity. "

    W.B. Yeats- 1919



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    Re: Ford Sets Goal To Eliminate 600 Dealerships

    Quote Originally Posted by unkillsam
    Jeez, I hope they shut down Robin Ford in Glenolden, PA just based on the fact that their TV ads are so freaking annoying.
    I've seen them and I do agree that they are quite annoying.
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    Re: Ford Sets Goal To Eliminate 600 Dealerships

    I'm suprised Ford is even considering this after seeing the fiasco that GM dealt with in buying out Oldsmobile dealers.
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    Re: Ford Sets Goal To Eliminate 600 Dealerships

    Quote Originally Posted by SigEpCutlass
    I'm suprised Ford is even considering this after seeing the fiasco that GM dealt with in buying out Oldsmobile dealers.
    that is why it is voluntary .. also the biggest redfuction will come as dealerships will be sold, and franchises should be stranferred, renewed etc ... whenever Ford will have an option of saying - NO - they will to the dealers in North Eeast and Mid West and West Coast

    Igor

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    Re: Ford Sets Goal To Eliminate 600 Dealerships

    They should offer money to a successful area dealership to buy out the unsuccessful one. And as a further incentive, promise them an abundant supply of whatever vehicle they can't get enough of.
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    Re: Ford Sets Goal To Eliminate 600 Dealerships

    Quote Originally Posted by hidden_bull
    As always Ford isn't willing to go the whole distance. Either buy them out or figure out another strategy.
    Do you even know how much that would cost? It's not like Ford is drowning in money.

    In many areas, the PROPERTY could run in the millions of dollars. Assume that it would take 4.5 million dollars to purchase each of the 600 dealers out, it would cost over 2.5 BILLION dollars. Remember, not only would Ford have to pay for the cost of the property, cars and most likely employee severance packages, they would have to throw enough change down so the owners will even consider it.

    Heck, I think 4.5 mill would be a low-ball estimate, considering that Germain spent well over 15 million to buy (and move) a small-time Cadillac dealer here in Columbus.

    So don't blame Ford in this entirely. Blame the US franchising laws that makes it difficult for them to improve their business.

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    Re: Ford Sets Goal To Eliminate 600 Dealerships

    600? Should be 800!

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