The MKZ's difficult birth

Lincoln executives admit they have only one shot at reinventing their faded brand for a new generation of luxury customers. But the MKZ, the first major vehicle of a new and better Lincoln lineup, has stumbled badly out of the blocks, angering dealers, wasting a costly advertising launch and driving away customers who have waited months for undelivered cars.

After Lincoln spent more than $7.4 million to advertise the new sedan during the Super Bowl, and more for another spot during the Grammy awards, dealers had no cars because of quality problems and parts shortages at Ford Motor Co.'s Hermosillo, Mexico, plant. Dealers didn't know what to tell customers who had put down deposits because, dealers say, they received only spotty information from the factory.

In other words, the new cloak of luxury that Lincoln had promised to create -- treating customers in a way befitting a true luxury brand -- was frayed at all the edges.

Now Lincoln is hoping the bungled launch can be salvaged by ramping up advertising next month, just as the brand sorts out the factory delays and begins shipping more cars.

"These cars were originally supposed to be here in late October," says O.C. Welch, who owns O.C. Welch Ford-Lincoln in Hardeeville, S.C. "We missed the after-Thanksgiving sale, Black Friday. We missed Christmas. We missed New Year's. We missed Presidents Day. We missed Black History month, Martin Luther King Day. We missed St. Patrick's Day. And it looks like we're going to miss Easter.

"It's almost time for 2014 Job One and we haven't seen a '13."

Dealers say the launch's troubles go beyond the months of delays. While they agree with Lincoln's refusal to ship cars that weren't of top quality, they don't condone what they consider the breakdown in factory-dealer communications.

Bill Knight, owner of Bill Knight Lincoln in Tulsa, Okla., and chairman of the Lincoln National Dealer Council, praises Lincoln for its financial support of dealers during the trauma, but adds: "When a customer calls and says, 'Where's my car?' and we can't give them a definitive answer, that's a pain point."

Bill Wallace, owner of Wallace Lincoln in Fort Pierce, Fla., says that not a day goes by without some communication from Lincoln about customer service and training. But he says Lincoln has given dealers conflicting or incorrect information about the status of customers' MKZ orders, and that has put dealers in an awkward spot.

"We look foolish to the customer and even worse than that," Wallace says. It's incongruous, he says, that Lincoln instructs dealers "that we want to treat all these customers with kid gloves and give them this special treatment -- and we're giving them bad information. It's not a good way to start a relationship."

Matt VanDyke, Lincoln's global director of marketing, sales and service, downplays the damage. "I don't think we've lost the momentum with dealers at all," he says. "No question that customers are waiting longer than they would have liked. We've created some frustration there."

He cited a number of "extraordinary" actions Lincoln has taken to alleviate dealer pain caused by the delay, including cash payments calculated on lost sales and extra spiffs on other Lincoln models.

It's tough to overstate the importance of the MKZ to the Lincoln rescue effort. When Ford killed the Mercury brand in 2010, Lincoln-Mercury dealers lost the volume that had supplied much-needed cash flow and service business. Dropping the Town Car removed what had been a steady Lincoln seller.

Things have gotten so bad in recent months that Lincoln brand sales have fallen below those of the Ford Mustang, a single niche model.

The redesigned 2013 MKZ was supposed to more than make up for those losses. Lincoln trumpeted the MKZ as a contemporary, stylish, distinctly American sedan that would appeal to young, hip customers dissatisfied with the German brands. Lincoln advertised the car during the Super Bowl and Grammy Awards in an effort to stoke demand.

Meanwhile, Lincoln put customer service at the heart of its brand reinvention, emphasizing it almost as much as the product itself. The Lincoln Dealer Academy, with a curriculum designed in consultation with luxury hotel concierges, opened last week to teach dealership employees how to treat customers as they would expect to be treated at a Ritz-Carlton. As an enticement to get customers to test drive the MKZ, Lincoln offered to buy customers dinner at a gourmet restaurant in a promotion called "Date Night." It created custom luxury experiences for customers, such as offering unique batches of blended whiskey.

Some dealers wish Lincoln had devoted some of that planning effort to anticipating adversity in the launch. Because when MKZ output began at Hermosillo, problems erupted.

A new quality inspection process for the sedan -- which had inspectors checking every MKZ rather than, say, one in 10 -- was quickly overwhelmed by cars coming off the line. Some of the MKZs were missing parts, but Ford couldn't halt the line because of strong demand for the Ford Fusion, which is built on the same line.

Joe Hinrichs, Ford's president of the Americas, refuses to put all the blame on suppliers. "We had our own internal issues, too," he says. Quality expectations for the 2013 MKZ were "the highest I've ever been part of. It took us awhile to get our own processes right."

Ford had to ship the overflow of MKZs awaiting inspection to its Flat Rock, Mich., plant, more than 2,000 miles away. Many cars waited weeks or longer at Flat Rock before being approved for shipment to dealers.

Cars that were shipped to Flat Rock became more difficult to track, fouling the brand's ability to tell dealers the status of cars, some of which had been secured by customer deposits. The car, which had been expected in dealerships during the fourth quarter of last year, is only now trickling in.

"Manufacturing delays on a new or existing vehicle are a part of life," says one dealer who declined to be identified. "They do not have a good process for helping us explain that to customers." One day Lincoln representatives told him they had no idea where some cars were, he says. The next day a truck showed up to deliver them.

Lincoln's VanDyke admits the delays created added uncertainty. "When we took the vehicles and sent them to Flat Rock, it has hurt our ability to communicate with customers as precisely as we should," he says.

But relief may be in sight. Last week Hinrichs said Lincoln has stopped shipping MKZs to Flat Rock for inspections and repairs, and the backlog of MKZs at the Flat Rock plant is close to being eliminated.

VanDyke says Lincoln has shipped 6,000 cars from Hermosillo since late December. Of those, 1,000 have been delivered to customers, 2,000 are in dealer stocks and 3,000 are in transit to dealers. It is now taking an average of about two weeks to ship a car from Hermosillo to a dealership, he says.

Some dealers say an advertising push in April, in what will amount to a relaunch, should do the trick, citing exceptional response to the car.

"The month of April becomes an awfully important month for us to truly get the car out there in volume," says Knight, the dealer council chairman. "The reaction to the car on the showroom floor has been great. There are just not enough of them."

Paul Thiel, owner of Palm Springs Motors, a Ford-Lincoln dealership in Cathedral City, Calif., says the MKZ is creating a stir in import-dominated California.

"This new one is just awesome. It draws attention every place you go. People don't recognize it as a Lincoln, and that's what we need. We need the 40 year olds to buy it, not the 75 year olds," Thiel says.

"If the cars are perfect," he says, "it won't take long to make up" for the launch problems.