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Ford Division dealers sound off in memo

Ford Motor Co. CEO Jacques Nasser is spending too much time nurturing Jaguar, Volvo and Land Rover and needs to produce well-built Ford brand vehicles in North America, say critical Ford Division dealers.

In a 14-page internal memo obtained by Automotive News, the dealers say they want to overcome a culture of "unrest" and "distrust" at Ford and build a stronger relationship with Nasser, whom many dealers consider "aloof" and "arrogant."

"I am not trying to make waves and hurt anybody's reputation," said Ralph Seekins, incoming chairman of the Ford Division National Dealer Council and author of the memo. The findings are based on an informal survey of more than 200 Ford Division dealers, he said. "The document was a private document. It wasn't meant to be public. Ford asked me to provide it unfiltered, and I did."

The blunt, often harsh, single-spaced document is a road map for rebuilding Ford's fractured relationship with its dealers. Ford Division dealers have arguably the worst factory relations in the industry.

In recent years, Ford has outraged its retailers by experimenting with a range of retailing, e-commerce and customer satisfaction ventures that dealers view as intrusive. At the same time, dealers have had to placate customers while repairing a string of vehicle defects.

As many as 800 Ford dealers, many from smaller stores, had planned to march on Ford's Dearborn, Mich., headquarters Nov. 2, according to two sources familiar with the plan. Ford averted the embarrassing public march by agreeing to a three-day meeting in Orlando, Fla., Oct. 17-19.

Meanwhile, at the regulary scheduled fall dealer meetings in Orlando last week, Ford moved to begin repairing its relationship with dealers by having Nasser address them.

"Mr. Nasser had the chance to express the value he puts on the dealer network, and he did that very well," Seekins said Thursday, Oct. 4. He owns Seekins Ford-Lincoln-Mercury in Fairbanks, Alaska.

Improving dealer relations is a top priority at Ford, said Susan Krusel, Ford spokeswoman. The 14-page memo is "a starting point to develop an action plan," she said.

Blaming Nasser

Ford dealers fault Nasser for creating a culture that produced defective vehicles and the objectionable ventures. They are "unsure of the role Mr. Nasser has designed for the independent dealer body," according to the memo.

Dealers are seeking rapport with Ford as a new management team takes over the Ford brand in North America. On Aug. 1, Nick Scheele became group vice president for the Ford brand in North America, overseeing every aspect of developing, building, marketing and financing Ford brand vehicles.

Seekins would not disclose who at Ford asked for the written examination on the state of dealer relations, and would not comment on what action Ford is taking in response to the document. "We want to be frank, and we don't want to be public," he said.

Poor product quality is cited in the memo as a primary factor thwarting Ford's relationship with its retailers.

"Dealers believe that in its drive for cost containment, the company went too far," the memo states. "They think suppliers may have been squeezed too hard and too fast and, as a result, Ford is now getting exactly what it pays for - a lower quality component."

Dealers bear the brunt. "As evidence, (dealers) point out that nationwide, year over year, for the past two years, warranty repairs performed at dealerships have increased by 50 percent and recalls have increased exponentially," the memo says.

Dealers also fault Ford for the company's intrusion into retailing, Ford's Blue Oval dealer certification program, warranty-related issues and lack of communication between dealers and senior management.

Seeking action

In the memo, dealers also ask Ford to:

  • Return to dealers 1 percent of each vehicle's invoice price, offsetting the 1 percent increase imposed as part of the Blue Oval certification program.

  • Concentrate on Ford brand products.

  • Vest more authority in Jim O'Connor, Ford Division president.

  • Continue Nasser's grass-roots meetings with dealers around the country.

  • Leave businesses that compete with the dealers, such as e-commerce ventures and JoeAuto.com, a startup auto-repair service in which Ford is an investor. n Re-examine Blue Oval dealership certification, a program some dealers view as an attempt to weed out retailers.
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