Determined few keep up Mercury fight with Ford
Ford says 99% of dumped dealers have OK'd terms
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About 99 percent of the 1,712 Mercury dealerships in business at the time of Ford's June 2010 move to drop the brand have signed termination deals. Photo credit: BLOOMBERG |
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More than two years after Ford Motor Co. announced it was killing the Mercury brand, some dealers are still fighting with the automaker over termination offers.
Ford says roughly 99 percent of the 1,712 Mercury dealerships in business at the time of Ford's June 2010 Mercury announcement have signed termination agreements. That's an increase from 98 percent last July, when 31 dealerships were unresolved.
Ford won't say precisely how many dealerships remain unsigned, describing it as "just a handful in some version of dispute resolution with the company."
"We're down to the last few, and we're just anxious to move forward," said Kevin Cour, Lincoln's sales and service manager.
The group of dealers battling Ford over what they describe as low-ball settlement offers continues to shrink. Three of at least four federal lawsuits filed against Ford as of last summer have been settled. The most recent resolution occurred in May, when Francis Scott Key L-M Inc. in Frederick, Md., agreed to settle.
Pete Adcock, owner of Francis Scott Key, confirmed a settlement but said he couldn't talk about it because of a confidentiality agreement.
In another federal lawsuit filed by Forrester Lincoln-Mercury of Chambersburg, Pa., Ford in late May asked the judge to enforce a settlement agreement it claimed had been reached with the plaintiff.
But Richard Sox, a Florida lawyer representing Forrester, says Ford is trying to avoid an unfavorable decision by the court. Ford's settlement enforcement request came just after the judge decided against the automaker's motion to dismiss the lawsuit, he said.
"The bottom line is there was not a settlement," Sox said. "There was some preliminary discussion, and Ford is trying to turn that into an enforceable settlement."
In a document filed May 25, Ford asked the court to seal information about settlement terms, saying in part: "Ford is presently engaged in litigation with several dealers related to discontinuance of the Mercury line make."
Ford officials won't discuss the Forrester lawsuit or any remaining cases. Cour said the company is optimistic it will come to amicable resolutions with all dealers.
"The dealers that we have right now that are on the Lincoln journey with us understand there is more benefit to looking out the windshield than there is the rearview mirror," Cour said. "It is in our collective best interest to settle the remaining issues that we have and really move forward with what's going to be important, and that is the reinvention of the Lincoln franchise."
Ford is steadily reducing the number of its Lincoln franchises. At least two dealer lawyers who have Mercury clients said one way Ford is settling the Mercury disputes is by offering dealers a high price to give up Lincoln. Ford is then either eliminating Lincoln in that market or pairing it with an existing Ford-brand dealership, they said.
As of Jan. 1, there were 982 Lincoln franchises in the United States, down from 1,126 at the beginning of 2011 and 1,221 at the beginning of 2010. The automaker says it has reduced the number of Lincoln franchises in its top 130 U.S. markets by 35 percent, to fewer than 325 dealerships.
That is helping sales per dealership for the remaining Lincoln stores, Cour said. But Lincoln dealers still have a challenging road ahead given the brand's steady decline in sales.
Through May, Lincoln sales are down 1 percent this year, and industry light-vehicle sales are up 13 percent. In 2011 Lincoln sold 85,643 vehicles. The brand sold 193,009 as recently as 2000.
• Mercury dealerships as of June 2010: 1,712
• % Ford says have termination agreements: 99
Source: Ford Motor Co.
You can reach Amy Wilson at awilson@crain.com.
