Ford tries to calm dealers waiting for Flex

Ford Flex: Dealers want them -- and fast.
Memo to antsy Ford dealers: The Flex is coming. Really.

In a Wednesday, July 30, memo to Ford’s Select dealers -- a group of small rural dealers -- a Ford manager tried to quell the concerns of those who still don’t have a Flex in their showrooms.

“Every dealer wants their hands on a hot product as soon as possible,” Ford spokesman Jay Ward told Automotive News. “When they don’t get it right away, they feel left out. But the cars are coming -- just not quite as fast as they might like.”

The Flex is launching in seven key metropolitan areas where Ford’s research showed there would be the most interest in the crossover, Ward said.

Ford has 10 remaining regions that will have their startup allocation of the Flex by September, the memo says. Ford has been advertising the Flex since June.

“By having new product and advertising behind it, dealers think that the product can generate showroom traffic for them,” Ward said. Customers “may not buy a Flex, but they may buy a Taurus X or an Edge.”

“If you see cars or advertising for cars, you want to piggyback off that and get people into the dealership.”

Ward said it is not unusual for dealers to be concerned about getting a new vehicle. Nor is it unusual, he said, for Ford to reassure dealers that new product is coming.

Chuck Spaeth, a Minnesota dealer on Ford’s Select dealer council, said the memo illustrates how communication between Ford and its Select dealers has improved.

“They wanted to work with the Select dealers and make sure they have one Flex before some of these other dealers get two, or three,” said Spaeth, owner of Chuck Spaeth Ford in Sleepy Eye, Minn.

Ford executives have said the Flex, which began shipping to dealers in June, was one of the company’s crucial launches for the year. Ford plans to sell 75,000 to 100,000 Flexes annually.

The Flex is built at Ford’s Oakville, Ontario, plant, which also builds the Edge and Lincoln MKX crossovers. In April, Ford said it would add a third shift to the plant. But last week, the company put the third shift on hold because of a deteriorating U.S. sales market.

It is unclear if the added production will begin at the plant, which added 350 workers to accommodate a third shift.

“We continue to monitor the market very closely and will adjust production appropriately,” Ford Canada spokeswoman Lauren More wrote in an e-mail to Automotive News.

COPY OF MEMO

June 30, 2008

To: All Ford Select Dealers

In recent weeks I have received calls and e-mails from many of you expressing your concerns over the roll-out of allocation for the 2009 Ford Flex.

I’d like to take this opportunity to address some of the actions being taken by Ford, and more specifically the Select Dealer Region to ensure that we have an executable coverage plan for the Select Dealers.

The Division’s initial launch strategy for the Flex consisted of seven target regions: New York, Washington, Detroit, Atlanta, Orlando, Southwest and California. These regions are supporting the launch through a Tier II advertising campaign. To date, we have been able to offer every Select Dealer in these seven regions a start-up unit.

In September the Flex will be launched nationally in the ten remaining regions. It is our intention to offer every Select Dealer in the country their start-up allocation by the September production period. We’ve also been given the opportunity to schedule all verifiable retail orders above and beyond the Region’s earned allocation.

As we move into the fourth quarter, production of the Flex will ramp up and we fully expect our allocation numbers to match our sales. It is imperative that we have a successful Flex launch to ensue we earn our fair share of allocation.

I appreciate your continued support and look forward to the opportunities this exciting new product presents to the Ford Motor Company and its dealers.

Sincerely,

[Signed]

Steve Woessner

Select Regional Manager

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