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Old 11-12-2006, 06:53   #1 (permalink)
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US:Group presses Ford on dealerships owned by blacks

Group presses Ford on dealerships owned by blacks

John D. Stoll / Dow Jones Newswires

DETROIT -- An association representing minority Ford Motor Co. dealers claims the company is unfairly targeting black-owned dealerships as part of broader efforts to consolidate its dealer network.

The Ford Motor Minority Dealers Association is asking the auto maker to hold firm to a plan to increase its minority-owned dealer base and protect the current corps of those dealers.

A.V. Fleming, the association's executive director, said Friday that African-American dealers are falling victim to Ford's Way Forward North American restructuring plan. The Detroit-based group claims Ford's African-American dealer count has shrunk by 70 percent in recent years and could be reduced to zero within three years. The group alleges that African-American dealerships will "bear the brunt of the anticipated dealer reduction."

Ford holds a substantial amount of equity in many of its minority-owned dealerships, and the FMMDA essentially accuses the company of unfairly leveraging its equity to reach its wider dealer-reduction goals. Ford says that some of the dealerships have been shuttered recently as a result of being unprofitable and for not having an effective business plan.

Ford spokesman Jim Cain said, "There is absolutely no plan" to target minority dealers as part of the company's wider dealer consolidation strategy. The auto maker, which lost $5.8 billion in the third quarter, plans to close about 600 dealerships, or about 20 percent of its network, in order to boost the profitability of individual dealers.

"Ford is always fair, professional and straightforward with our dealers in good times and bad," Cain said. He said the company's number of minority-owned dealers as an overall percentage of the dealer body has remained constant.

While Ford has built its Way Forward program on a need to better connect with consumers who are increasingly turning to Asian competitors, dealers remain important cogs in the company's health. The viability of dealers and their willingness to order cars from the auto maker play a crucial role in sales and production planning.

The FMMDA has scheduled a Dec. 5 press conference in Detroit to discuss its strategy. Fleming said Ford needs to stop closing dealerships operated by African-Americans and other ethnic minorities in order to give them time to respond to Ford's downsizing plans. He also called on Ford to identify and correct the causes of closings and failures of such dealers.

"We're asking Ford to hold off on closing the dealers so we can reevaluate the business plans of these dealers so they can respond to the overall Way Forward plan and its smaller market-share targets," Fleming said. Ford expects its U.S. market share to fall to the 14 percent to 15 percent range next year, from 25 percent in 1997.

The association is asking for a meeting with Ford Chairman Bill Ford in order to discuss a strategy, Fleming said. The parties met in the spring and Fleming has a standing date to meet with Bill Ford in the future, but he would like the meeting pulled ahead. The FMMDA sent a letter to Bill Ford on Oct. 11 and the auto maker turned the request over to Ford sales chief Cisco Codina.
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