North Carolina Ford Division dealers could get back their Blue Oval bonus payments before a dispute over the program is resolved.
Ford stopped the payments in the state last month after the North Carolina Division of Motor Vehicles declared the program illegal under state franchise laws.
Under Blue Oval, Ford pays bonuses to dealers who meet certain customer service standards. The bonuses are 1.25 percent of base sticker or an average of $250 per vehicle. The automaker raised new vehicle invoice prices by 1 percent in 2000 to pay for the bonuses.
But on Feb. 13, Ford and a group of Blue Oval-certified dealers filed separate motions in North Carolina's Wade County Superior Court seeking a stay of the Jan. 8 ruling by the Division of Motor Vehicles. Ford had appealed that ruling in a Feb. 7 filing.
A stay would allow Ford to resume Blue Oval in North Carolina during the appeal process. If the stay is granted, Ford plans to restore Blue Oval payments retroactive to Jan. 8, Ford spokeswoman Susan Krusel says.
The loss of Blue Oval payments means Ford dealers in North Carolina are at a cost disadvantage to competing dealers in other states. They are paying the same invoice price for vehicles as dealers elsewhere but aren't receiving the bonus payments. The money can be the difference between profits and red ink for many dealers.
"We agree with the majority of North Carolina dealers that terminating the program is immediately harmful to Ford, its dealers and consumers in North Carolina," Krusel says.
More than 90 percent of Blue Oval-certified dealers in North Carolina joined to file the dealer-backed motion for a stay, she says. It may take a few weeks for a Wade County Superior Court judge to rule on the motions for stay. A hearing may be held as early as this week.
The North Carolina dispute was triggered by a complaint against Ford and Blue Oval by Freeman Ford in Liberty, N.C. The North Carolina Automobile Dealers Association was not a party to that complaint, but it helped pay to bring the complaint.
Ford is in discussions with a group of Ford dealers to try to resolve the complaint, says Bob Glaser, the group's president. He says he is hopeful the dispute can be resolved through dialogue rather than the courts, maybe even before a meeting of North Carolina Ford dealers scheduled for late March.
"The dealers are very anxious to get this issue behind them," Glaser says. "The dealers are more interested in selling vehicles, doing what dealers do best, rather than having this over their head."
Nationally, Ford said it will end Blue Oval payments to all dealers in March 2005. The division pledged it would restore the previous dealer discount — the difference between sticker price and dealer invoice price, expressed as a percentage of sticker — at the program’s termination.