Thirteen Lincoln-Mercury dealers in the Chicago area have filed a lawsuit to halt Ford Motor Co.'s dealership certification program.
The lawsuit alleges that the program intrudes on the independence of Lincoln-Mercury dealers in violation of the Illinois Motor Vehicle Franchise Act.
Ford Motor Co. had not filed a response to the lawsuit late Friday. The company declined comment, said Nancy Carollo, Lincoln Mercury spokeswoman.
The lawsuit is the second filed against Ford Motor Co. over controversial dealership certification programs adopted for the 2001 model year. In November, five Ford retailers in five states teamed up in a lawsuit to halt Ford Division's Blue Oval certification program.
In the 2001 model year, Ford, Lincoln and Mercury are certifying top-rated dealerships. The three brands reward certified dealers with financial payments for every vehicle sold, although the formula varies by make.
For example, a certified Lincoln dealer will receive a bonus of approximately $1,100 for every 2001 Lincoln Continental sold, according to the Illinois lawsuit.
The Lincoln Premier Experience program returns to certified dealers 2.5 percent of the vehicle sticker price. In earlier stories, Automotive News has noted that the 2001 bonus is accompanied by a reduction in the dealer discount.
Ford Motor Co. maintains the programs are legal and are merely incentives created to enhance customer handling.
Critics, including the National Automobile Dealers Association, maintain the certification programs create a two-tier pricing structure and intrude into the retailing practices of franchised dealers.
For example, the lawsuit filed by Ford Division dealers in U.S. District Court in New Jersey alleges that Blue Oval discriminates against dealers and places noncertified dealers at financial risk. In the 2001 model year, Ford Division is returning 1.25 percent of each new vehicle's invoice price to its Blue Oval dealers.
In seeking to overturn the Lincoln program, the suing Lincoln-Mercury dealers argue that the company is using 'economic coercion' to force dealers to make changes not required by the franchise agreement, a violation of Illinois franchise law, said Richard Karr, the attorney representing the 13 dealers. The lawsuit was filed Jan. 12 in the Illinois Circuit Court of Cook County.
'The lawsuit focuses on the intrusion into the independence of Lincoln-Mercury dealers, their right to do business as they see fit, not as Ford sees fit.' Karr said. 'These are independent businessmen, and Ford wants to change that.'
Ranks of certified grow
Currently, 508 of Lincoln's 1,545 dealerships are certified, Carollo said. At Mercury, 453 of the brand's 2,400 dealerships are certified, she said. A similar number of retailers are waiting for the required inspections conducted by J.D. Power and Associates, she said.
The Mercury Advantage program returns 1.25 percent of vehicle sticker price to certified dealers.
The suing Illinois dealers are: Gregg Motor Sales; Highland Park Lincoln-Mercury; Kronon Motor Sales Inc.; Napleton Lincoln-Mercury of Skokie; Napleton's North Aurora Lincoln-Mercury; Nigri-McCue Lincoln-Mercury; Nigri-McCue Lincoln-Mercury of St. Charles Inc.; Park Ridge Lincoln-Mercury; Rosen Lincoln-Mercury; Roto Lincoln-Mercury; Northwest Lincoln-Mercury; Terry's Lincoln-Mercury and VG & Prast Lincoln-Mercury.