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Blue Oval cash halted

Ford stops dealer bonuses in N.C. but won't cut invoices
Automotive News / January 27, 2003

The dispute over Ford Division's Blue Oval program is costing North Carolina Ford dealers money.

State regulators have ordered Ford Division to halt the Blue Oval dealer certification program. Ford has stopped paying the bonuses of 1.25 percent of base sticker, averaging about $250 per vehicle, to the certified North Carolina dealers.

But Ford is refusing to lower invoice prices of new vehicles, as ordered by regulators. In 2000, Ford raised invoices 1 percent to pay for the Blue Oval bonuses.

So North Carolina's dealers are paying more for vehicles than dealers in neighboring states. And they aren't getting Blue Oval payments, which for many dealers is the difference between red and black ink. Roughly 95 percent of Ford Division dealers are certified.

Ford maintains it is complying with a Jan. 8 ruling by the North Carolina Division of Motor Vehicles that declared the Blue Oval certification program illegal under state franchise laws. The complaint was brought by a single Ford dealer in the state. State law bars factories from varying new-vehicle prices based on investments in facilities, a component of Blue Oval certification.


Ford will appeal the Division of Motor Vehicles ruling in state courts by a Friday, Feb. 7, deadline, says Ford spokeswoman Susan Krusel. With the appeal, Ford will seek to revive Blue Oval and the payments to dealers, she says.

The North Carolina Automobile Dealers Association is opting for diplomacy rather than harsh rhetoric on the issue.

When Blue Oval began in 2000, Ford raised invoice prices to dealers by 1 percentage point and then returned 1.25 percent of the base sticker price to certified dealers who

met certain customer-service standards.

The dealer association maintains that the Jan. 8 ruling requires the automaker to restore the dealer discount to pre-Blue Oval levels.

Ford Division maintains it has complied with North Carolina by ending Blue Oval and that no other action is required.

"Ford does not plan to change margins in North Carolina right now," Krusel said. The matter is complicated by an ambiguous ruling by Danny Moody, a hearing officer for the Division of Motor Vehicles.

It states that "in the event that Ford Motor Co. fails to immediately discontinue the Blue Oval program and reinstate the 1 percent margin," Ford will be enjoined from continuing Blue Oval in the state.


A meeting with Ford representatives, North Carolina Ford dealers and the North Carolina Automobile Dealers Association is likely following next week's National Automobile Dealers Association convention in San Francisco, says Bob Glaser, president of the state dealer association.

The state dealer association was not a party to the complaints brought by Freeman Ford in Liberty, N.C., against Ford but did help pay to bring the complaint, Glaser says.

In December, Ford said it would end Blue Oval payments to certified dealers throughout the United States in March 2005.

Steve Lyons, Ford Division president, pledged that the division would restore the previous dealer discount - the difference between sticker price and dealer invoice price, expressed as a percentage of sticker - at the program's termination. That promise stands, Krusel said last week.

My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....
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