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Ford-Werke faces losses, German dealers fight for survival

Cologne, Germany. Bernhard Mattes, who has been chief executive at Ford Werke AG since last September, will face some unpleasant questions at the company's June 24 supervisory board meeting.

In 2002, Ford's German subsidiary lost a three-figure million euro sum due the strong pound and weak dollar, investments in new models and engines, and heavy sales incentives.

According to insiders, Ford Werke is unlikely to earn a profit in 2003.

Meanwhile, Ford dealers in Germany also seem to be in trouble. Ford's national dealers association reports that 54 percent of Ford dealers in Germany are losing money.

"Many colleagues are fighting for their existence," said association spokesman Volker Reichstein.

Several dealerships have not sold a single commercial vehicle since April, he said.

To take some of the load off dealers, Mattes has suspended a purchase commitment program that requires dealers to buy certain vehicle packages.

Mattes tried to increase the pressure on dealers during a series of regional meetings. But instead most of the pressure was directed at Mattes.

"We have the best model range we have had on offer in a long time but some of the cars are too highly priced," said a Ford dealer in Munich.

Reichstein also demands more help from the manufacturer.

"We need a financially strong partner," he said.

According to some dealers Ford's support measures are insufficient. The manufacturer pays dealers 20 euros for test drives. For new registrations the manufacturers pays bonuses of up to 7 percent off the list price.

But Mattes is not able to offer dealers new sales-promotion programs because Ford of Europe has ordered Ford in Germany to take strict cost-cutting measures.

Some dealers are also unhappy that Mattes is closely watching the sales targets. They worry that those who don't reach the sales volume target will have to fear for their bonuses in the second and third quarters.

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