All the dealers in Ford Motor Co.'s dealer development program have accepted the automaker's proposal to allow them to buy the company's interest in their stores for $1.
"Now, the next step is to secure financing," says Ford spokesman Steve Kinkade.
In April, Ford made the offer to all the members of its dealer development program -- mostly minority entrepreneurs -- who operate 62 dealerships.
Eligible dealers had until June 1 to let Ford know whether they would participate.
Ford will forgive capital loans, but those who accept the offer must provide adequate operating capital for their stores. They have until Sept. 30 to secure financing and close the deal.
Dealers who are now financed by Ford Motor Credit Co. will have to reapply. Ford Credit will not automatically continue to finance them.
Ford will ask owners of dealerships whose losses exceed their investment in their stores to surrender their franchises if they can't finance the buyout.
While acknowledging that the offer is a good one, dealers have expressed concern that obtaining private financing in today's credit-strapped marketplace will be difficult.
Oswaldo Garcia, executive director of the Alliance of Ford Motor Minority Dealers, says his members are optimistic about Ford's product line, its leadership and its technology. They think they can get financing and hang in there until the market turns around, he says.
"They are entrepreneurs, and they feel good about it," says Garcia, whose members are mostly Hispanics.
About half of the dealerships in the dealer development program are operated by members of the Ford Motor Minority Dealers Association. The association is composed mainly of black dealers.
Ford's dealer development program gives would-be dealers without adequate financing the chance to acquire stores. Previously, dealers were supposed to use store profits to buy out Ford's stake gradually.