Ford Motor Co., rocking the world of traditional auto dealerships in the United States, wants to acquire control of all Ford and Lincoln-Mercury dealerships in metropolitan Indianapolis.
Ford last week asked Ford and Lincoln-Mercury dealers in the Indianapolis market to sell to a new company to be owned by Ford and the dealers. The 18 dealerships would be replaced with about five megastores.
The experimental megastores would be operated by a new venture as early as the end of the year, said Robert Rewey, Ford group vice president of marketing and sales.
Ford's proposal is still another big battlefront in the revolution under way in auto retailing. (See story on Page 45.)
'I think Ford has an extremely progressive outlook into the marketplace,' said Tim VanDam, chief operating officer of Family Lincoln-Mercury in Indianapolis. 'This is visionary.' Some dealers await one-on-one meetings with Ford before commenting.
Rewey said Ford may make similar offers to dealers in other medium-sized metropolitan markets in the United States. He declined to be specific.
The new megastores, both Ford and Lincoln-Mercury, would be operated as a single company and overseen by a Ford-appointed manager, according to dealers familiar with the plan. The manager would probably be one of the current Indianapolis dealers.
'We would have a single dealer be the operator of the entire market area,' Rewey said. 'He would be the manager of the enterprise with other managers operating the outlets in the market. But it's a single entity.'
The final number of megastores will be determined by further market research.
Ford would offer cash buyouts or stock options in the newly created venture to the 13 Ford and five Lincoln-Mercury dealerships, dealers said.
The top manager would oversee both the Ford dealerships and the Lincoln-Mercury dealerships in the entire market area, Ford said. That manager also would supervise a new network of free-standing Ford Auto Care retail service centers pivotal to Ford's plan, Ford said.
Ford said it wants to test retailing concepts that shoppers have asked for in the company's consumer research. Those include:
Huge inventories of new and used vehicles. Each of Ford's megastores could cover as much as 25 acres, dealers said.
Easy-to-reach and easy-to-use service centers.
Salaried sales consultants.
New dealership facilities that incorporate modern merchandis-ing concepts and feature the service department prominently.
Dealer Joe Myers, owner of Collins Lincoln-Mercury in In-dianapolis, said dealers at the meeting were shown a 'mock-up' of what one of the new dealerships would look like. It would have one big showroom with separate areas for Ford, Lincoln, Mercury, Jaguar and Mazda vehicles, although Rewey said in an interview that Ford and Lincoln-Mercury would not be combined at a single location.
Ford said Jaguar and Mazda are not part of the program.
Myers said he is impressed with Ford's offer.
'I think Ford wants to make this plan succeed; they have an effective timetable,' he said. 'What they are proposing is ultimately what will happen with all manufacturers. It's inevitable. We'll see the dealer body downsized.'
'NOT A HOSTILE TAKEOVER'
Ford spokesman John Ochs said, 'This in no way, shape or form represents a hostile takeover. Dealers would have an option to sell or become partners. If somebody chooses not to par-ticipate then they chose not to participate.
'Dealers will be offered the chance to become partners and to sell their assets either partially or totally,' Ochs said.
Said Rewey: 'Hopefully, the dealers - in the aggregate - will have a significant amount of the ownership.'
Ford did not provide details of the financial framework of the deal and the new venture that would retail Ford vehicles in Indianapolis.
'We haven't concluded the specifics on how the different offers will be structured,' Rewey said. 'There will be a number of options the dealer can select. Probably the least likely would be a cash buyout. There will be various levels of ownership they could take on.
'We will be driven by what dealers want,' he said.
In the meeting last week, Ford said it will proceed with the Indianapolis plan only if a majority of dealers cooperate.
Ford said it has not finally determined the number of dealers and the geographic area in the Indianapolis plan. The final details depend on further market re-search.
Also awaiting more research is the number of megastores and service outlets, Ford said.
Ford will not handle day-to-day operations at the megastores and service centers, said Ford spokes-woman Judith Muhlberg. Those jobs are likely to be filled by current dealers and dealership management, she said.
Dealers were briefed at the meeting last week by Rewey and Ross Roberts, Ford Division general manager. The meeting lasted only 90 minutes instead of the scheduled three hours, said Jeff Inskeep, dealer principal at Inskeep Ford-Mercury in Green-field, Ind.
'Everyone was taken by sur-prise. We had no idea what was coming at us,' he said.
Indianapolis was chosen for the test because of the potential for market growth, he said. 'We're all just flabbergasted.'
Indianapolis dealers have not framed a collective response, said one individual affected by the proposal.
Most await one-on-one meetings scheduled in coming weeks to detail how the plan will affect individual stores and operators.
The Indianapolis plan incor-porates Ford Motor Co.'s deal-ership-of-tomorrow look. It is not clear how the dealerships would be paid for.
'Visually there is a lot more focus on the service facility than most of the dealerships you see today,' Rewey said.
Dealerships will be supple-mented by four to five Ford Auto Care centers, he said. Piloted in 1992, Ford has three dealer-operated Auto Care outlets in the United States.
Rewey would not confirm dealer reports that Ford envisions two Lincoln-Mercury and three Ford megastores.
'That is something we would determine after a full study of the Indianapolis market,' he said. He did say that Ford and Lincoln-Mercury vehicles will continue to be sold from separate outlets.
But dealer Inskeep worries that if the metropolitan dealers agree to Ford's plan, smaller dealers will have no choice but to go along. He is in the midst of a $50,000 renovation at the store which retails about 600 new units and 500 used vehicles annually.