Ford Cutting Dealerships Faster Than Expected

[Deanh]

<sigh> I keep telling you.

 

There were no visions of grandeur.

 

As far as handing franchises to real morons, well, don't forget that, per Ted Sturgeon, 90% of everything is crap.

 

You will always have half of your dealer principals with intelligence below the group's median. If you want to arbitrarily call them morons, go ahead, but you will always have them.

 

I believe in the 50-50 blame thing because self-centered dealers looking out for their own immediate interests have 1) made this problem a problem, by preventing Ford from eliminating franchises, and 2) they have made the problem worse by refusing to cooperate--always insisting that the burden of consolidation be borne by someone else.

I do agree with you to a certain extent, just see it from a different angle thats all, bias perhaps, question for you Rich, say you were a dealer and all of a sudden Big Brother wanted to chop your livelihood off at the knees....would you not put up a fight? Would you just lie down and co-operate? Now Ford seems to have realized they made an error....thats all I'm saying in my own biased manner...... to allow Ford to step in and say you can sell my product but YOU can't, AFTER they handed said persons a franchaise to me just sounds dark ages.....

Edited September 13, 2007 by Deanh

[wescoent]

Some anecdotal observations on the matter. Years ago, I went to school in Scranton, PA, which was part of the Wyoming Valley, a big river valley which was pretty much all the civilization in Northeastern PA. Ford had many franchises. Wilkes Barre had three dealerships within relatively short driving distance of each other, the same with Scranton. Ultimately, there were six dealers within a fairly short distance, where Toyota only has two, soon to be opening another. None were particularly seedy or run down.

 

However, it would make more sense to me in this market to have two large dealers with slick modern showrooms and top-notch service departments, than 6 smaller dealers.

 

On the other hand, we could look at it this way. We'll take Toyota for example. If you lived in Scranton, and the Toyota dealer pissed you off, it would seem unlikely to me that someone would drive a half an hour to Wilkes Barre for purchase and service just to get a Toyota. As opposed to Ford, if Gibbons Ford pissed you off, you could happily drive down the street to Scranton Ford, and deal with them instead.

[RichardJensen]

I do agree with you to a certain extent, just see it from a different angle thats all, bias perhaps, question for you Rich, say you were a dealer and all of a sudden Big Brother wanted to chop your livelihood off at the knees....would you not put up a fight? Would you just lie down and co-operate? Now Ford seems to have realized they made an error....thats all I'm saying in my own biased manner...... to allow Ford to step in and say you can sell my product but YOU can't, AFTER they handed said persons a franchaise to me just sounds dark ages.....

Me? I'd take the money and run.

 

If my dealership was doing well, Ford wouldn't be after me to close. If thing were rough... Like I said, 'take the money and run.'

 

Odds are, if you didn't have too high an impression of yourself, you could make more running a rooftop for another dealer, than you would running your own foundering franchise.

 

Or you could use the pay-off money as seed money for something else.

 

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And again, I don't think you can call what Ford did, expanding their franchise base, an 'error'. Things aren't all black and white.

 

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As far as suspending franchise rights goes, it may sound draconian to -you- but to many other franchisees in many other lines of business, it's de rigeur. It's the way things are done. 'For cause' a franchisor may revoke a franchise, and a franchisor always--in these other businesses--retains the right to cash out a franchise--value to be determined at the time of repurchase.

 

It's only with car dealers that it gets all huffy, with people standing on imaginary rights (what constitutional right is there to sell new cars?).

[Deanh]

Me? I'd take the money and run.

 

If my dealership was doing well, Ford wouldn't be after me to close. If thing were rough... Like I said, 'take the money and run.'

 

Odds are, if you didn't have too high an impression of yourself, you could make more running a rooftop for another dealer, than you would running your own foundering franchise.

 

Or you could use the pay-off money as seed money for something else.

 

----

 

And again, I don't think you can call what Ford did, expanding their franchise base, an 'error'. Things aren't all black and white.

 

----

 

As far as suspending franchise rights goes, it may sound draconian to -you- but to many other franchisees in many other lines of business, it's de rigeur. It's the way things are done. 'For cause' a franchisor may revoke a franchise, and a franchisor always--in these other businesses--retains the right to cash out a franchise--value to be determined at the time of repurchase.

 

It's only with car dealers that it gets all huffy, with people standing on imaginary rights (what constitutional right is there to sell new cars?).

see...now you go and make sense dammit. only thing is that expanding ones base to the extent that it is ( and I am talking specifically my area ) will always run the risk of cannabalizing one or more dealers market share...and it doesn't take a rocket scientist to figure that out....there is only one party to potentially prosper from flooding the market at such...the manufacturer not the seller....don't you agree...thus my heavy handed "Greed" comment.....and NOW Ford seems to be thinking differently and with a bunch more common sense.....

[RichardJensen]

I keep trying to say, at that time it wasn't 'flooding' the market. Car dealerships were like gas stations and grocery stores. One on every corner.

 

You've heard the old Sonny and Cher song "The Beat Goes On", right? "Grocery store's a supermarket uh-huh" Seen those late 60's supermarkets? Most of 'em weren't even 30,000 sf. Today grocery stores are probably 5-10x the size they were in the 50s, and 2-3 times the size they were in the late 60s.

 

Things just changed a lot as far as how we get our necessities, how often we go to car dealers, and what we do there.

[Deanh]

I keep trying to say, at that time it wasn't 'flooding' the market. Car dealerships were like gas stations and grocery stores. One on every corner.

 

You've heard the old Sonny and Cher song "The Beat Goes On", right? "Grocery store's a supermarket uh-huh" Seen those late 60's supermarkets? Most of 'em weren't even 30,000 sf. Today grocery stores are probably 5-10x the size they were in the 50s, and 2-3 times the size they were in the late 60s.

 

Things just changed a lot as far as how we get our necessities, how often we go to car dealers, and what we do there.

funny....and now the catch phrase is "streamline"...my how times have changed.......I think/ hope something good will come out of this...next up...simplify the product line with "packaged" NOT individual options.....another Ford error IMO.

[RichardJensen]

That whole 'packaged' vs 'individual' options seems more a question of balance than dogma. The Mustang sold 600k copies its first year in no small part due to its individual options.

[Deanh]

That whole 'packaged' vs 'individual' options seems more a question of balance than dogma. The Mustang sold 600k copies its first year in no small part due to its individual options.

on the flip side one has trouble stocking the vehicle that is "just right" for the fussy non compromising customer. If one makes a car 1000 different ways their are 999 reasons that the one customer can say "no"....less dealers, packaged options would help put an end to the dreaded dealer locate, the "if I could would you's " and lower the amounts of Factory orders.....heres a doozie....one can get a sunroof in a Hybrid as long as its not White!!!!!!!!!!!!!!!!!! explain THAT!!!!!!! I may pi$$ and moan sometimes but this business never has a dull moment, probably due to the seeming lack of logic sometimes.....

Edited September 13, 2007 by Deanh

[630land]

Me, I have ZERO sympathy for car dealers. They pull any trick to make $$ off buyers, and take advantage of the emotional decision. The ones who are true rip off artists do lose customers, but they use their $$ making tactics for any new "mark" that walks in.

 

This process will kill off the weakest dealers, and get rid of Ford having to make old designed cars since that is the only way to make $$ with too many dealers cut throating to sales.

 

Sure one Ford dealer will give you $100 off the other one 4 miles away, but they sneak in 'hidden charges' to make up the rest.

Edited September 14, 2007 by 630land

[Deanh]

Me, I have ZERO sympathy for car dealers. They pull any trick to make $$ off buyers, and take advantage of the emotional decision. The ones who are true rip off artists do lose customers, but they use their $$ making tactics for any new "mark" that walks in.

 

This process will kill off the weakest dealers, and get rid of Ford having to make old designed cars since that is the only way to make $$ with too many dealers cut throating to sales.

 

Sure one Ford dealer will give you $100 off the other one 4 miles away, but they sneak in 'hidden charges' to make up the rest.

another disgruntled customer whom has obviously had a bad experience and now blankets all dealers as being the same.....answer...then just pay retail.....love sweeping comments like this...typical from people that are wholley interested in nothing but THEIR OWN well being, they ownly give a rats if it DIRECTLY affects them....

Edited September 14, 2007 by Deanh

[sranger]

I would not have a problem on teh reductions if Ford used the customer service satisfaction as their guide for cutting out problem dealers.....

 

Although I doubt it would ever happen that way...

[Deanh]

I would not have a problem on teh reductions if Ford used the customer service satisfaction as their guide for cutting out problem dealers.....

 

Although I doubt it would ever happen that way...

THAT make sense...thx Range....nice to see some have common sense.....next up though WE grade customers...LOL!

[xleex1]

our dealership just announced that it will be closing at the end of this month. we have been bought out by ford motor company and a competing dealer. the store is in a western suburb of chicago. the dealership is closing because of our location. our store has out performed the competing dealer in every statistical category for 20 years. i.e. customer satisfacton, sales volume, service work etc... The only thing ford cares about right now is the dirt and location of the stores that are staying open. if the dealership in question is a stand alone point with a less desireable location. they will choose to back the competing dealer with a better location over the dealer with the better resume every time. end of story.

[630land]

Where are you at? Oakfield Ford or the ancient store in West Chicago? I'd rather see Elmhurst Ford [4 miles from Oakfield] close, since they are rip off artists.. I'd like to see them get torn down for a hotel.

[630land]

another disgruntled customer whom has obviously had a bad experience and now blankets all dealers as being the same.....answer...then just pay retail.....love sweeping comments like this...typical from people that are wholley interested in nothing but THEIR OWN well being, they ownly give a rats if it DIRECTLY affects them....

 

 

Well, the rep speaks for itself. I know some dealers will give a good price, but you have to f-in arm wrestle them or spend hours playing hard to get. As long as this 'people are stupid' attiude continues, such as Deanah's, the 'rip off' artist rep sticks.

[Noah Harbinger]

another disgruntled customer whom has obviously had a bad experience and now blankets all dealers as being the same.....answer...then just pay retail.....love sweeping comments like this...typical from people that are wholley interested in nothing but THEIR OWN well being, they ownly give a rats if it DIRECTLY affects them....

 

We should all be proud to be paying for your wife's breast augmentation and your penis elongation and hair implants. We should all raise our voices and praise you for the opportunity to pay thousand-dollar markups. We should revel in the glory of the extra sealant you sell for the paint, and the fabric guard, and that most thrifty of bargains, the pre-paid scheduled maintenance plan. One friend personally thanks you for the extended warranty you sold him, which you kindly sacrificed with only a 100% markup. And the financing! Another friend who is going through bankruptcy sent a thank you card for her 28% loan for the car she needs to keep her job.

 

We love you, O Glorious Overlord, my Dealer!

Edited September 15, 2007 by Noah Harbinger

[suv_guy_19]

We should all be proud to be paying for your wife's breast augmentation and your penis elongation and hair implants. We should all raise our voices and praise you for the opportunity to pay thousand-dollar markups. We should revel in the glory of the extra sealant you sell for the paint, and the fabric guard, and that most thrifty of bargains, the pre-paid scheduled maintenance plan. One friend personally thanks you for the extended warranty you sold him, which you kindly sacrificed with only a 100% markup. And the financing! Another friend who is going through bankruptcy sent a thank you card for her 28% loan for the car she needs to keep her job.

 

We love you, O Glorious Overlord, my Dealer!

 

 

You do realize that a dealership is a business that is out to make money, right. They offer you goods and services. whether or not you choose to buy into them is up to you. Dealerships, for the most party are not evil. People always want them to move in price. Maybe the people would walk in expecting to pay full price. Any break you get is something the dealer is doing for you. People are too ready to bash dealers for doing their jobs.

[RichardJensen]

There's doing 'your job', and then there's pulling a job.

 

To be quite honest, car dealers, like lawyers, have--as a class--earned their reputation.

 

Having earned that rep, it's not like collectively all the rest of us are doing our best to keep this stigma going.

 

In fact, a number of unreconstructed dealers are keeping this stigma going.

 

Such things as the highly marked up F&I office products, the valueless tack-ons, the 'sit here while I go get my sales manager' tactics, 'I can only guarantee this price for today. If you don't act now, I'm afraid you may not be able to get this car at this price.', etc.

 

At good dealerships, this crap has gone the way of the dodo. You can expect to pay a pretty hefty markup on your F&I products, but that's also where the dealership recovers a fair amount of back end expenses. It will always cost more to get a service contract from a dealer (or GAP insurance, etc.) than over the internet. Why? More overhead.

 

But the worst dealers bring down the reputation of the entire industry. In no small part because they will take you (or try to take you) for thousands of dollars. It is rare to find that kind of thievery at, say, the grocery store. Worse yet, they will rob you blind and try and make you think they're doing you a favor.

 

I make it a point to never buy from a guy who's trying to convince me that I can come down this weekend and 'take advantage' of his overstocked lot, or his whatever. Push/pull/drag sales: "I'm so stupid, I'll give you $2000 for your old heap". All of that means that -someone- is going to get taken to the cleaners.

 

And it's probably you.

Edited September 15, 2007 by RichardJensen

[ironhorse]

Every customer wants to buy at invoice or below,and want the dealer to pay $4000 more for their high-mileage vehicle than it will bring on the open market..or better yet "just pay off my trade"....hence the rub.

[Noah Harbinger]

You do realize that a dealership is a business that is out to make money, right. They offer you goods and services. whether or not you choose to buy into them is up to you. Dealerships, for the most party are not evil. People always want them to move in price. Maybe the people would walk in expecting to pay full price. Any break you get is something the dealer is doing for you. People are too ready to bash dealers for doing their jobs.

 

Of course they have the right to make a profit. But why can't they do it up front and honestly? Put a price on the car that you will make a reasonable profit on, and sell it at that price. Is that so hard?

[630land]

They do have a right to make a living, but to basically screw people over with bait and switch, fingers on the scale, bullying 'you better buy the extra wax job or else'. And the a$$hole attitude that 'people are stupid and they owe us'.

 

Dealers I am loyal to are the ones who don't waste time, just get to the price with some give and take. Competition and people educating themselves on the internet will bring down the crap stores.

[ironhorse]

Of course they have the right to make a profit. But why can't they do it up front and honestly? Put a price on the car that you will make a reasonable profit on, and sell it at that price. Is that so hard?

 

If price and price alone sold cars,Wal-mart would have done it years ago. Other factors,like payments,trade-in allowance,negative equity,deal structure and credit worthiness... most of the time a car deal is alot more complicated than some of you realize.

[Deanh]

Well, the rep speaks for itself. I know some dealers will give a good price, but you have to f-in arm wrestle them or spend hours playing hard to get. As long as this 'people are stupid' attiude continues, such as Deanah's, the 'rip off' artist rep sticks.

People aren't stupid at all 630...can you say the word "no"....not a lot of syllables is there......you may need to google the spelling though.....

[Deanh]

Of course they have the right to make a profit. But why can't they do it up front and honestly? Put a price on the car that you will make a reasonable profit on, and sell it at that price. Is that so hard?

Its called MSRP.....but customers have realized the second letter in that acronym stands for "suggested".........

[RichardJensen]

Deanh:

 

Kind of disingenuous on the 'no' thing. Your sleazy sales men never take 'no' for an answer.

 

I saw an older middle-aged couple reduced to begging for permission to leave the office of a particularly shady rep in a particularly shady dealership in a small town near here. I was appalled. He was standing between them and the door, informing them that if they left now, they would probably never get such a good deal on a car again.