Ford sets out to slash 600 dealers

[Blue Oval Staff]

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[630land]

Say by by to some of the marginal ones! hopefully the rip off artists and ones that put vinyl roofs on new cars!

[Guest Sixcav]

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.

 

No doubt. 100 to 300K, you can't even open a dealership for that. You can't even get close to opening one for that. In most cases that wouldn't cover the cost of the structure much less the inventory, staff, operating costs. They must be joking.

 

I'm so tired of hearing about what Ford is going to cut. They're cutting jobs, they're closing plants, they're cutting their dealership network. How exactly is all of this going to raise sales, the real problem. I want to hear about their new product line. Ok they are coming out with the Edge. Personally I don't think the Edge is going to do that well, but time will tell. Other than that, what? What's in the pipe? You can't increase sales by firing people and closing stuff. You can cut your staff so much that on paper it looks like your output is equivalent to your income but that's not the same thing. That's giving up. Don't give up you bastards, fight back, introduce new product, espeically in the B car segment.

[ZanatWork]

In the pipeline:

 

Edge/MKX

AWD for Fusion/Milan

MKZ (with available awd and the new V6)

Mustang Shelby GT/GT500

New Expedition/Navigator

 

followed early next year by:

 

Refreshed Focus

Refreshed 500/Montego/Freestyle

New F-Super Duty

Possible New Mustang Variant (BOSS? Mach One?)

New Escape/Mariner

 

Those are what I know about, or see regular updates on. Strongly rumored after those:

 

Fusion/Milan hybrid

Edge hybrid

Five Hundred hybrid

MKS (w/possible twin turbo)

Fusion w/"performance package" (turbo 3.0? 3.5?)

New diesel for F150/Expedition

New V8 family for trucks, Mustang, possible rwd sedan?

"B" car and small crossover

 

 

That's what I've seen regularly speculated. With the recent report that programs will be moving forward more quickly, timetables could change.

 

As far as closing dealers...that's overdue. In my town alone there are two Ford dealers with others in suburbs in every direction...a 20-minute drive takes you by three of 'em. Happily, there's only one Lincoln/Mercury dealer for the area.

 

It's just as bad in many places, or even worse, and leads to a dumb situation: Ford vs. Ford vs. Ford...THEN Ford vs. other makes. This leads to dealers cutting prices (and thus profits) to further their sales, regardless what it does to the brand's value.

 

Ford's dealer overpopulation is as noted as their excessive capacity, has been a problem as long, and needs to be addressed.

Edited September 19, 2006 by ZanatWork

[Guest Sixcav]

A refreshed Focus is a good thing. I just hope they don't screw it up. The Shelby GT is a niche car, big time. It will equal lots more money for only 25 more horses. With a regular GT already hitting 30 grand in most cases you can bet this Shelby will be 32 or so. AWD in the Fusion and Milan is nice but I don't think it's going to equal big sales. It will of course raise the price of the car. Is that AWD going to be a standard feature or an option? Refreshing the Expeidition, ok I guess it was due but seriuosly, the sales of them are down 40%. I think it's time to consider dropping the line altogether. Finally, only time will tell on th Edge and MKZ. I have my doubts but who knows, could turn out to be a good thing.

[RichardJensen]

The $100k-$300k being offerred is not to buy out the dealers, wholesale. It's like getting a Pell grant. No, it's not going to pay for your ENTIRE tuition, but it provides a bit of incentive.

 

Ford should not, under any circumstances, pay top dollar to close existing dealerships.

[ZanatWork]

A refreshed Focus is a good thing. I just hope they don't screw it up. The Shelby GT is a niche car, big time. It will equal lots more money for only 25 more horses. With a regular GT already hitting 30 grand in most cases you can bet this Shelby will be 32 or so. AWD in the Fusion and Milan is nice but I don't think it's going to equal big sales. It will of course raise the price of the car. Is that AWD going to be a standard feature or an option? Refreshing the Expeidition, ok I guess it was due but seriuosly, the sales of them are down 40%. I think it's time to consider dropping the line altogether. Finally, only time will tell on th Edge and MKZ. I have my doubts but who knows, could turn out to be a good thing.

 

 

I'm hoping the refreshed Focus is a VERY good thing. God knows it's late enough.

 

The Shelby GT is just smart marketing...I remember guys paying hideous sums to get an IROC-Z when the Z28 had 95% of the same stuff for thousands less. If people like the GT but want a tick more power and visual appeal...here ya go.

 

The awd thing is an option, and it'll hopefully help to keep CD3 sales right at plant capacity until more motor and/or the hybrids arrive. It'll be available for less money than the Subaru Legacy, I'm certain, which works for Ford in this case.

 

The Expedition goes forward simply because that type of vehicle has a built-in market: need. Down where I live, ranches and construction sites that need to move the crew around rural or chewed-up areas have needed those basic vehicles as long as they've existed. There's just less soccer moms driving them around dowtown in the urban jungle now...and that's a good thing. The vehicles aren't bad or evil, but they've gotten a bad rap because so many city types bought them for no good reason.

 

The Edge in particular has a lot of interest (especially at the show where I first saw it) and it's aimed at the heart of a growing market...so it should be fine. The MKX will be a real test of the new Lincoln name-game....

[Guest Sixcav]

So essentially its like saying "Hey, Mister Ford Dealer Owner, here's 300 grand to shut the doors, just for you buddy." Is that it?

 

What's the end result of that? Obviously first off the immediate affect is the staff all lose their jobs. No bitter resentment their right? Here's probably some people that have worked many years for Ford and many of them probably buy Ford products. So sorry, we don't want the Ford vs Ford competion so you suckers are out. Thanks for buying our shit. lol Well you know those people are all going to go out in their respective communities and say "That low down so and so sold out to Ford for 300 grand because the big wigs in Detroit didn't want Brand X Ford dealer to compete against Brand Y Ford dealer."

 

Some people around here think that's a good idea.

 

It's just as bad in many places, or even worse, and leads to a dumb situation: Ford vs. Ford vs. Ford...THEN Ford vs. other makes. This leads to dealers cutting prices (and thus profits) to further their sales, regardless what it does to the brand's value.

 

Last I heard competition was a good and healthy thing in our economy. Now suddenly it's not because it means that car dealers lower their prices to compete. Lower prices is good for the consumer. The shit is already overpriced as it is. So 600 dealerships, that employ how many thousands of workers, some of whom have probably been loyal Ford customers for years will all be let go because Ford doesn't like Ford dealers competing and giving consumers a better deal. Wow, when did we put the hammer and sickle on the flag. lol

[Guest Sixcav]

There's just less soccer moms driving them around dowtown in the urban jungle now...and that's a good thing. The vehicles aren't bad or evil, but they've gotten a bad rap because so many city types bought them for no good reason.

 

On that I agree 100%. See we can see eye to eye on some stuff. Most people that bought those big ass Expeditions never really needed that size vehicle for what it was intended for. It was just a social status thing after awhile I think. I fully agree about the use of them on ranches and so forth where a vehicle like that is needed. Here's the down side. When they started getting popular way back when, Ford and others started to jazz up their SUV's to make them more appealing to the soft tushied soccer moms that bought them. Result? Prices soared. You don't really need a fancy ass vehicle for that sort of ranch type work. Maybe the boss, ok, but the rank and file guys, no. What you need is really rugged and dependable vehicle. Elegant colors and soothing ergonomics need not apply. If they would get back to the utilitarian mindset about the Expedition or at least make a version there of, they could lower the price and sell more. You think? Maybe? :shrug:

[RichardJensen]

So essentially its like saying "Hey, Mister Ford Dealer Owner, here's 300 grand to shut the doors, just for you buddy." Is that it?

No. It's like here Mr. Big Ford dealer, here's $300k towards buying out Mr. Small Ford dealer. We'll finance the purchase for you at a subsidized rate too.

 

Just like student loans.

 

You incentivize behavior you want with money.

[ZanatWork]

Last I heard competition was a good and healthy thing in our economy. Now suddenly it's not because it means that car dealers lower their prices to compete. Lower prices is good for the consumer. The shit is already overpriced as it is.

 

Here's where the math breaks down:

 

Cars that are over-incentived and/or bargain priced don't keep value, and that hurts the long-term value of the product. If you have to sell it low new, the used value will reflect that, and the vehicle will be seen a bad investment because you'll get so little money out of it later.

 

This is why it's extremely healthy for Mustang GTs to sell at sticker (I dislike dealer gouging) instead of making the "blowout price" collection...the car will be worth more when the owner sells or trades it. For this reason, the Fusion has had better residual value than the Taurus. It mostly sells retail (fewer fleet discounts), it sells quickly, and thus is in demand so dealers can actually make money on them, furthering their business.

 

I don't agree that it's "all overpriced". The margins on many vehicles are really thin, and that's bad for the dealer, the carmaker, and even the customer because the residual value of a low-profit vehicle will be low down the line.

 

Profit isn't evil, and Ford isn't making much in the way of profit right now anyway. Thus, there is no basis behind "overpriced".

[IPITYDAFOOL VIRUSFREE]

No. It's like here Mr. Big Ford dealer, here's $300k towards buying out Mr. Small Ford dealer. We'll finance the purchase for you at a subsidized rate too.

 

Just like student loans.

 

You incentivize behavior you want with money.

This is off topic but since Richard is here. Richard how do you feel about somebody getting paid 25000 a day consulting fee. U are right there and I know you would haVE HELPED FOR LESS. The total package is not supposed to exceed 262.000 and unlike when Reichart came aboard this is not Mr Bond's full time job. I thought all of Fords answers could be found on BON and not buy an Airplane guy with two Money advisors right behind him(Leet and Bond) This plan is getting more dire for the Uaw than even I thought. :shrug: :fan:

[J-150]

I wonder if Otis Ford will be one of them.

 

[Guest Sixcav]

Here's where the math breaks down:

 

Cars that are over-incentived and/or bargain priced don't keep value, and that hurts the long-term value of the product. If you have to sell it low new, the used value will reflect that, and the vehicle will be seen a bad investment because you'll get so little money out of it later.

 

This is why it's extremely healthy for Mustang GTs to sell at sticker (I dislike dealer gouging) instead of making the "blowout price" collection...the car will be worth more when the owner sells or trades it. For this reason, the Fusion has had better residual value than the Taurus. It mostly sells retail (fewer fleet discounts), it sells quickly, and thus is in demand so dealers can actually make money on them, furthering their business.

 

I don't agree that it's "all overpriced". The margins on many vehicles are really thin, and that's bad for the dealer, the carmaker, and even the customer because the residual value of a low-profit vehicle will be low down the line.

 

Profit isn't evil, and Ford isn't making much in the way of profit right now anyway. Thus, there is no basis behind "overpriced".

 

Yeah I understand that, but here's the downside. A car is always the worst investment you'll ever make. Unless you have the smoke to buy a Lamborghini or a Bugatti, something like that, you will always lose money. The car will always lose value. Much of what determines the residual value of a car is not just how good a deal the buyer got. There's market conditions to consider. While once SUV's commaned great resale value because of their popularity, now they don't because of their unpopularity. Is the market flooded with the kind of vehicle you drive? That will drive it's value down. Is the vehicle known to be unreliable? In the case of Ford and GM the entire perception problem drives their prices down on residual value. Does the vehicle get bad safety ratings for say rollover or what not? Lots of things will drive the value of a vehicle down, not just because people get a good deal at the time of purchase.

 

 

As for the margins on vehicles. You betcha they're thin, they're thin at the dealer. Dealerships have an average mark up of 8%, that's it. During the hayday of SUV's some of them were commanding 12 to 14%.

The real markup is when the manufacturer sells it to the dealership. That's where the real money is made and that's where the real mark up is.

[RichardJensen]

This is off topic but since Richard is here. Richard how do you feel about somebody getting paid 25000 a day consulting fee. U are right there and I know you would haVE HELPED FOR LESS. The total package is not supposed to exceed 262.000 and unlike when Reichart came aboard this is not Mr Bond's full time job. I thought all of Fords answers could be found on BON and not buy an Airplane guy with two Money advisors right behind him(Leet and Bond) This plan is getting more dire for the Uaw than even I thought. :shrug: :fan:

Well, I don't know as much as Bond does.

 

Still, my eyes did pop at the sheer silliness of the contract's scope. How much use is 12 hours of work RIGHT BEFORE a board meeting going to be?

 

Likely this provides him with free airfare to Detroit for the board meeting, some decent grub, and an opportunity to be a sounding board for Bill Ford. I mean, when you figure the guy's going to be flying first class from London to Detroit, well, heck, that's probably $5 grand right there.

 

It's not going to break Ford Motor, but it does look silly. 12 hours of work, 12 times a year.

[MTP WORKER]

On that I agree 100%. See we can see eye to eye on some stuff. Most people that bought those big ass Expeditions never really needed that size vehicle for what it was intended for. It was just a social status thing after awhile I think. I fully agree about the use of them on ranches and so forth where a vehicle like that is needed. Here's the down side. When they started getting popular way back when, Ford and others started to jazz up their SUV's to make them more appealing to the soft tushied soccer moms that bought them. Result? Prices soared. You don't really need a fancy ass vehicle for that sort of ranch type work. Maybe the boss, ok, but the rank and file guys, no. What you need is really rugged and dependable vehicle. Elegant colors and soothing ergonomics need not apply. If they would get back to the utilitarian mindset about the Expedition or at least make a version there of, they could lower the price and sell more. You think? Maybe? :shrug:

There are a lot of people with big families with big boats and big dogs that like to do more than just go to soccer games or rodeos. SUV's offer more room and you feel that your family is a bit safer with all the big ass trucks on the roads. If Ford can ever put in a motor that can get over 25mpg's in one they will sell well and bring in HUGE profits. If they can slap a motor in that can get near 400hp it will also sell to the guys that need the power. Does anybody out there know of any plans and timelines for other motors(Hurricane, diesel or hydraulic assist)?

[Guest Sixcav]

Towing capacity yes, interior room no. You will get better interior room in just about any minivan. Now if you have kids and a boat, that's one thing, but probably doesn't apply to the majority of families. Twenty-five mpg per gallon city driving in a big SUV would be awesome, I'd love to see that, but not likely anytime soon.

[ZanatWork]

The new diesel might get close. The numbers from the Euro debut were encouraging bordering on astonishing.

[ebritt]

Could they start with Greenwood Ford in Bowling green please?

[Guest Sixcav]

By the way I was wrong about the price on the Shelby GT when I said 32 grand. According to Autmobile Magazine when the car goes on sale in January it will be 35 grand. Great, 5 thousand more dollars for 25 more horses and a paint job. Even the guy that test drove the Hertz rental Mustang for Automobile wasn't all that impressed. He referred to it as a paint job and exhaust system. He did however admit that the car had great "coolness" appeal and how lots of people just made over it everywhere he went. So ok, 35 grand for a car that people will say "uuu and aaahhh" about for a few months and then it will just be another Mustang and you'll still have that $650 a month car payment. Ouch!!!!

[630land]

Competition is a good thing, but Ford should compete for import buyers, not have dealers two miles apart selling used rental cars.

 

Some will say it's 'communism', but no have you ever studied economics? Free Enterprise? Some say, keep all the delaers with salesman sitting around, while buyers go to other makes?

 

Whatever, the old wood is getting pruned.

[ZanatWork]

By the way I was wrong about the price on the Shelby GT when I said 32 grand. According to Autmobile Magazine when the car goes on sale in January it will be 35 grand. Great, 5 thousand more dollars for 25 more horses and a paint job. Even the guy that test drove the Hertz rental Mustang for Automobile wasn't all that impressed. He referred to it as a paint job and exhaust system. He did however admit that the car had great "coolness" appeal and how lots of people just made over it everywhere he went. So ok, 35 grand for a car that people will say "uuu and aaahhh" about for a few months and then it will just be another Mustang and you'll still have that $650 a month car payment. Ouch!!!!

 

Heh.

 

The "Guy" was a woman, and while she did state that she felt it was a sticker-and-muffler-job, she also spoke about the stiffer suspension (flattens out at 80) and pretty much GUSHED about how cool the car was.

 

Could a savvy buyer do it for less? Sure. Then again, a smart car and parts buyer usually can outdo the factory...while kiling their warranty and possibly making an expensive mistake or two along the way.

 

25 hp, stiffer suspension, and no one is forced to buy 'em. I bet they sell anyway.

[ebritt]

Heh.

 

The "Guy" was a woman, and while she did state that she felt it was a sticker-and-muffler-job, she also spoke about the stiffer suspension (flattens out at 80) and pretty much GUSHED about how cool the car was.

 

Could a savvy buyer do it for less? Sure. Then again, a smart car and parts buyer usually can outdo the factory...while kiling their warranty and possibly making an expensive mistake or two along the way.

 

25 hp, stiffer suspension, and no one is forced to buy 'em. I bet they sell anyway.

The aftermarket industry has gotten very good at what they do. A well engineered , easily installed set of upgrades can turn a regular Mustang in a real firebreather.

[Guest Sixcav]

A stock suspension with the exception of the strut tower brace as I understand it.

 

A part that can be picked up even through Ford SVT for less than $200.

 

I don't know about yours, but my Mustang already flattens out at 80.

 

I'm sure they'll sell, just because it says Shelby on it. I just wish they were more akin to what the orginal Shelby was over a stock Mustang, which is to say bad ass.

[RichardJensen]

different anti-roll bars, and springs, IIRC.