Ford Motor Co.'s meeting in Indianapolis lasted only 90 minutes. But it was long enough to force 18 dealers to weigh the rest of their lives.
In the brief session two weeks ago, Ford laid out its plan to put Indianapolis on the cutting edge of automotive retailing.
Ford wants to replace 18 Ford and Lincoln-Mercury dealerships in the Indianapolis market with about five megastores. A newly created corporation, owned jointly by Ford and the dealers, would handle sales and service in the market, and a Ford-appointed manager would run the venture.
The 18 dealers are wrestling with a crucial question: How much money will it take to walk away from the businesses many have spent decades building?
'If Ford wants to do this deal, they have to pay for it,' said Paul Harvey, chairman of Paul Harvey Ford Sales in Indianapolis.
The decision, however, turns on far more than a simple financial equation. Ford is asking the dealers to shed the identity of a lifetime - retailing entrepreneur - and buy into a corporate retailing experiment.
'It's a huge emotional issue - the affect on everyone's life. That's the top of the list,' said John Pearson, owner of Pearson Ford Inc., a metropolitan Indianapolis dealership. 'I am trying to separate the emotional aspects from the business aspects, but it is not an easy thing to do.'
Interviews with nine dealers in the Indianapolis market last week made one thing certain: No one can say yet if he will sell or stay.
The dealers will have a much better idea where they stand after Ford sits down with the dealers one-by-one in the next few weeks and makes a financial offer.
Ford is willing to spend $155 million on the venture. The number was part of a slide show at the dealer meeting, but Ford did not spell out whether the figure would cover buyouts as well as the new mega-stores and other parts of the plan, dealers said. Ford, however, would not confirm the $155 million figure.
OBSTACLES FOR FORD
Ford's plan means that in one dramatic move, the company would thrust into mid-Indiana all the major trends that are sweeping automotive retailing: megastores, large inventories of new and used cars, no-haggle shopping, Saturn-style control of a large market area and more convenient service.
But some dealers in Indianapolis say Ford is underestimating the obstacles involved in the market takeover. The dealers say, for example, that:
Some retailers may want unreasonably high buyout offers.
Ford does not recognize how strongly the dealers view themselves as independent business people committed to the community.
Ford's new merchandising concepts - such as one-price selling and 24-hour service centers - may not succeed.
Ford's fundamental concept -big-box selling - may not appeal to shoppers.
Nonetheless, no one is rejecting Ford's offer at first blush. 'Show me the money' is a line that aptly applies. And all agree that the automotive retailing landscape is shifting.
Ford has said it will try the experiment in other markets if Indianapolis dealers reject the plan.
ONE DEALER'S DILEMMA
'Until there is an offer, no one knows what to do,' said Jeff Inskeep, dealer principal at Inskeep Ford-Mercury in Greenfield, about 15 miles east of Indianapolis.
Inskeep, 39, whose dealership has been in the family since 1961, said he always envisioned a future in the car business. Now he is no longer certain.
'If the metro stores go along with it, they could make my franchise worth nil,' Inskeep said. 'They could cut my distribution for high-demand product. And they could undercut me on (vehicle) price because the megastores will be company owned. And they can do so much advertising.
'At this point, I'm trying to center most of my thinking and emotion on saving this dealership and keeping up employee morale,' Inskeep said.
Ford will offer affected dealers cash, stock in Ford Motor Co., stock in the new venture, or a combination of those incentives, dealers said. Eventually, the new venture would go public, dealers said.
'If they convince the majority of dealers, they will pretty much force the smaller dealers to go along with it or ruin us,' said Inskeep, who retails about 600 new units and 500 used vehicles annually.
STRONG TIES TO CITY
Paul Harvey Ford Sales, which retails about 2,800 new units annually, is in the middle of a $1.2 million renovation, dealer Paul Harvey said.
'It gets down to one thing - fair offers. If they want to take this market over, they have to make a fair offer,' said Harvey, a Ford dealer for 43 years.
'I don't see this working,' said an affected dealer who spoke on condition of anonymity. 'You are not going to get this many dealers to agree on anything.'
But some dealers argue that money is not the overriding issue. What counts is their decades-old ties to Indianapolis.
'Our family has been in Indianapolis since 1870,' said Pearson, 47. 'We're an old-line family.'
His dealership, which has been in the family since 1959, sits on a 25-acre site in a growing area one mile north of the Indianapolis beltway. In 1993, Pearson spent $2.5 million on new construction and renovation to create a 70,000-square-foot dealership that would carry his business into the next century.
'I felt well-primed for the future,' Pearson said. 'I've worked a long time to get myself in this position.
'Future earnings are on the upside at this location,' Pearson said. 'That is a huge factor for me. The value of my land and buildings is escalating. I own 25 acres here, and I am using about 10 acres for the dealership. I don't expect necessarily to give up this property in a growth market.
'We're not interested in doing this,' Pearson said. 'But, like everybody else, we will listen to what Ford has to say.'
'IT'S NOT JUST MONEY'
One dealer who spoke on condition of anonymity also cited his ties to Indianapolis, and his loyalty to Ford Motor through good times and bad.
'This is my life. This is what I do. I'm a dealer in my community. It took years to build this organization,' the dealer said. 'It's not just about money. Ford doesn't understand that.
'Ford has talked to us about helping us acquire a store in another market area. But why would I want to do that?'
What customers really want is another central question in the Indianapolis debate.
Ford says its customer research has the answer. Shoppers want large inventories of vehicles, easy-to-use service locations, no-haggle selling and salaried sales consultants, Ford says.
In the Indianapolis experiment, the megastores - each situated on as many as 25 acres - would pool inventory. Dealership service would be supplemented by Ford Auto Care centers that would offer night and weekend service.
Tim VanDam, chief operating officer of Family Lincoln-Mercury in Indianapolis, formerly Dave Mason Lincoln-Mercury, described Ford's plan as 'progressive' and 'visionary.' And dealer Curt Wilcher, owner of Wilcher Ford Sales Inc. in Mooresville, said Ford is acknowledging the harried lifestyle of many Americans.
'With both parents working today, they don't get home in time to come to our dealerships for service,' Wilcher said. 'We lose those customers. Ford is saying the satellite centers might be open 24 hours a day.'
But while the satellite centers may be easier for customers to use, Wilcher questions if they will build loyalty to the Ford brand. And he wonders if highly trained technicians will be willing to work the required shifts.
Said Don Miller, general manager of Crossroads Lincoln-Mercury in Indianapolis, 'There's still a place for the neighborhood ma-and-pa store where they know the name of your son or daughter.
'If one person owns all the stores, what prices will there be?' Miller asked. 'The customers will pay more in the end.'
Crossroads, which has been in operation since 1968, sells about 1,400 new and used Lincoln-Mercury vehicles annually. The dealership is preparing to renovate the Lincoln-Mercury store and to build a new Chrysler-Plymouth-Jeep-Eagle dealership on the site.
'We're hoping all this goes away, and they go back to Detroit and stay up there,' Miller said. 'This is a very profitable store.'
Right now, however, most dealers are waiting to hear Ford's offer.
'There is a lot more I need to know,' said Gary Alderman, owner of Jerry Alderman Ford in Indianapolis. 'I am sure it comes down to each dealer's individual situation. And I don't know how determined Ford is.'