In 2006, Ford dealers in Buffalo, N.Y., suffered from Rust Belt disease: Too many dealerships, too few customers. Following a plan sketched on a place mat -- which Ford now considers a national template -- dealers developed a formula to buy out other Ford dealers willing to sell. Some dealers won, some dealers lost, when the roster of Ford stores shrank from 15 to nine. Here is their story.
BUFFALO, N.Y. -- In 2006, Chuck Basil's toughest competitors were the other Ford dealers surrounding his metro Buffalo store. The solution: Pay them to go away. It worked. "Best investment I've made," says Basil, 53, a dealer's son who bought his own Ford store in his 20s. Basil, who played a key role in the consolidation plan, has kicked in a total of $500,000 to buy out three dealerships in Buffalo. And profits at Basil Ford in Cheektowaga, N.Y., have soared. Basil had been urging Ford Motor Co. to consolidate for years, to no avail. By mid-decade, half of the Buffalo area's Ford stores were losing money in a troubled market. In 2006, after years of falling market share, the automaker relented. With moral and financial support from Ford Americas chief Mark Fields, the dealers acted. In the broad sense, the venture was a success. Even dealers who went out of business say the Buffalo area and the surviving Ford brand dealerships are better off because of the five buyouts and one closing. Still, there are scars and casualties. Today, while one prominent dealer expands his building to the edges of his property, a former competitor across town paces his empty store, wondering how to sell property already in bank foreclosure proceedings.