Ford turnaround pays dividends for dealers

[TonyV]

Last Updated: February 14. 2010 4:47PM .
Ford turnaround pays dividends for dealers
Bryce G. Hoffman / The Detroit News
Dearborn -- Ford Motor Co. says its turnaround is paying big dividends for its dealers, who it says saw their profits skyrocket in 2009.

According to the automaker, profits for Ford dealers were 15 times higher last year than they were in 2008. Profits at Lincoln-Mercury franchises increased tenfold during the same period.

Now, Ford is launching new initiatives to help its dealers go green, and become even more profitable while doing it.



"We've stopped the downward slide," said Ken Czubay, Ford's head of sales and marketing for the United States.

Ford, Czubay said, is redoubling its efforts to help its dealer body remain profitable -- and go green at the same time.

Today, at the National Automobile Dealers Association's annual convention in Orlando, Ford is expected to announce the formation of a new dealer committee to help the company figure out ways to improve dealer profitability and the customer car-buying experience.

"Our goal is to help our dealers, work with our dealers and learn from our dealers," Czubay said. "Improving dealer profitability is paramount, because without improving their profitability, we can't have a sustainable dealer organization."

Ford also is scheduled to unveil a new, voluntary program aimed at helping its dealers reduce their impact on the environment. For a nominal fee, Ford will send a team of green-building experts to a dealership. They will conduct a comprehensive survey of the site and present the owner with an array of options ranging from simple energy-saving improvements to a complete program for going carbon neutral.

Ford says all of these options will save dealers money in the long run while boosting the company's green credentials with consumers. It comes as the automaker readies the launch of a new generation of battery-powered electric vehicles, hybrids and plug-in hybrids.

While dealers agree that business is improving, some challenge Czubay's impressive figures.

"Business has picked up tremendously, but I find those numbers hard to believe. Things are better, but dealers are still struggling financially," said Michell Van Vorst, executive director of the Ford Dealers Alliance, a dissident dealer organization. "They may be making more money, but it's not on the sale of new cars."

However, even Van Vorst said relations between the company and its dealers are improving.

"They're very grateful for Ford for managing their company much better than their domestic competitors," Van Vorst said, noting that hundreds of General Motors Co. and Chrysler Group LLC dealers lost their franchises after those companies filed for bankruptcy last year. "There's a shift in the way consumers perceive Ford because it didn't file for bankruptcy. That has helped, too."

But even Ford would like to have fewer dealers. Last year, Ford managed to eliminate more than 200 dealerships in the U.S.

"We have a ways to go," Czubay said, referring to Ford's efforts to consolidate its dealer body in several major metropolitan areas.

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