US:Ford to trim Metro dealers
Ford to trim Metro dealers
Automaker sees its market share drop, says the decrease will be on 'strictly voluntary' basis.
Bryce G. Hoffman / The Detroit News
Ford Motor Co. plans to extend its North American restructuring to its retail network by consolidating dealerships in 18 major markets, including Detroit.
The move comes as Ford's declining U.S. market share leaves its 4,300 U.S. dealers fighting for a piece of an ever-smaller pie.
Ford officials confirmed the plan Monday as Ford stock surged back into positive territory for the year after a prominent Wall Street analyst upgraded his rating for the company's stock.
Bear Stearns analyst Peter Nesvold upgraded Ford to "outperform" from "underperform" on the promise of an accelerated North American restructuring plan that is due out next month.
"We expect (Ford) to re-emerge in September with a more aggressive turnaround," Nesvold said. "We think investors will warm up in hurry to a restructured Ford."
Ford shares gained 46 cents, or 6.24 percent, to close at $7.83 on the New York Stock Exchange on heavy trading.
Spokesman Jim Cain said Ford's restructuring must extend to the company's dealer network.
"Our goal is to work with our dealers to build a business model that's profitable for them, profitable for us and sustainable across the business cycle," he said.
While Cain would not discuss details of the plan, company sources said Ford is working to identify consolidation targets and will meet with those dealers to encourage them to merge.
Ford also plans to think twice before approving dealership transfers or renewing franchises when dealers retire or die.
But Cain said Ford will not force any dealers to consolidate.
"It's totally voluntary," he said. "We'll handle this in private and in a very collaborative way."
A broad outline of Ford's consolidation plan was revealed to dealers earlier this month during their annual meeting with the automaker in Las Vegas.
Martin "Hoot" McInerney, a longtime Michigan Ford dealer with a store in Southfield, said he and most of the dealers he knows welcome the consolidation plan.
"We know we've got too many dealers," he said. "No one's upset about it."
McInerney said he was not surprised to see Detroit on the list of markets identified for consolidation, pointing out that the city's population has dropped even faster than Ford's market share in recent decades.
Like other domestic automakers, Ford's dealership base expanded rapidly in the boom years following World War II. In recent years, however, Ford's domestic market share has been deeply eroded by foreign rivals.
Once, one out of every four cars and trucks sold in America was made by Ford.
Last month, Ford lost its long-held No. 2 position to its Japanese nemesis, Toyota Motor Corp., dropping to third place with just 15 percent of U.S. car and truck sales going to Ford's three domestic brands.
Ford's dealer base has shrunk, but not nearly enough to keep pace with the reduced demand for its vehicles.
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.....