DETROIT - When Ford Division revises its Blue Oval certification program next April, bonuses to dealerships will be cut nearly in half, dealers and company sources say.
The current bonuses, which go only to certified dealers, will be replaced by new bonuses tied to sales performance. All dealers can receive bonuses, regardless of certification.
Under the current Blue Oval, designed to motivate dealers, Ford pays certified dealers who meet certain customer service and other standards. Certified Blue Oval dealers receive bonuses of 1.25 percent of base sticker prices.
In 2000 Ford raised invoice prices 1 percent for all dealers to pay for the 1.25 percent bonuses.
In designing the new program, Ford wanted to avoid the legal hang-ups it encountered with the current program, say sources. Some dealers accused Ford of two-tier pricing, claiming Blue Oval provided different prices to different dealers. Dealers in Texas and North Carolina sued Ford under state franchise laws.
But Ford also wants to pay dealers who fear the loss of the bonus payments. Many certified dealers, especially those who upgraded stores, say they have come to rely on bonuses.
The new payments, though just 53 percent of current bonuses, will help alleviate such concerns, one dealer source says.