Ford pilot expected to benefit minority dealers
Corley: New dealers will have experience.
DETROIT -- The Ford Minority Dealer Association is seeking minorities with dealership management experience and cash -- or a partner with cash -- for a new pilot to help dealers buy Ford and Lincoln stores.
Under the Ford Motor Co. program, candidates put up 20 percent of the cost of stores and finance the rest through loans from Ford Motor Credit Co., to be paid off in seven to 10 years.
The program is expected to benefit minority dealers but is open to individuals of all races, John Felice, the automaker's general manager of Ford and Lincoln sales, said last summer at the annual meeting of the National Association of Minority Automobile Dealers. Felice was unavailable to comment for this article.
Under the program, Ford will not take a stake in the stores as it did with a dealer development program that the automaker discontinued in 2009, says Nate Sutton, owner of Sutton Ford-Lincoln in suburban Chicago.
Sutton headed the subcommittee of dealers and Ford executives that developed the pilot. Ford gave it the green light in early December. He says that finding stores to buy will be challenging, but doable.
"I've heard that at least 10 percent of all dealerships change hands every year, and some dealers don't have succession plans," Sutton says. After three to five deals are done, Ford will evaluate the pilot's results, he says.
Eddie Corley Jr., chairman of the Ford Minority Dealer Association and dealer principal at Corley Lincoln-Volvo in Albuquerque, N.M., says the program is likely to bolster minority dealer numbers because it aims at experienced general managers and former dealership owners.
"This is a good thing because previously, the dealers had no dealership experience -- they came from different professions," Corley says of Ford's earlier efforts to recruit minority dealers.
No dealerships have changed hands under the program so far. Corley says the timetable depends on finding the right candidates and the right stores but the association would like candidates to start applying by the end of the first quarter.
Ford will notify the association if its field representatives learn of dealers who want to sell their stores and lack succession plans, but it is up to candidates to find stores to buy, arrange the deals and bring potential deals to Ford and Ford Credit, Sutton says. Ford still has the right to exercise its right-of-first-refusal option on dealership transactions, he says.
The ideal dealership for the program would be in a mid-sized market, sell 30 to 60 new vehicles a month with the potential to sell more and cost not more than $5 million including blue sky, the term for the intangible value of a franchise, Sutton says.
He adds: "It's a tremendous opportunity for someone with limited resources to become a dealer."
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