HACKENSACK, NJ — Forty years of battling for dealer equities against the factory's “mighty hammer” are being observed by the Ford Dealers Alliance, which has been based here near the location of its founder's Ford store.
It was in 1967 that Edwin J. Mullane, a successful and outspoken Ford dealer in Bergenfield, NJ, set about organizing an association of Ford and Lincoln-Mercury dealers. The FDA got going in 1969.
Mullane was riled up by Ford Motor Co. showing favoritism to a nearby factory-owned store in northern New Jersey.
The auto maker's refusal to halt the distribution advantage that hurt other Ford dealers, combined with what Mullane said were excessive subsidies paid by Ford and General Motors Corp. to rental and corporate fleets, stirred him to no end.
He summoned Ford dealers to the first of many organizing meetings, at which candidates for executive director of the FDA were interviewed (including this writer).
The response was overwhelming when membership appeals went out to the then-nearly 4,000 Ford dealers in the U.S., citing factory stores and fleet subsidies as inequities, as well as “unfair” franchise terminations and sales quotas.
The auto maker fought the dealer “unionizing” effort, but dealers flocked to the cause. They contributed financially and appealed to FDA leaders not to yield to factory pressure and threats.
Mullane was a study in contrasts, He was quiet in person, but a charismatic orator as he championed dealer rights.
His pledges to lead the battle, voiced in numerous meetings across the country, kept the cause alive despite warnings from Ford.
His diligence paved the way during the 1970s and 1980s for passage by nearly all state legislatures of auto franchise protection bills, opposed vehemently by auto makers.
Efforts by Chevrolet dealers to form a GM dealer alliance were snuffed out by that auto maker, which kept after its franchisees to stay clear of organizing — or else.
FDA's membership reached the 2,000 mark as the association in 1981 named as its second and current executive director, A. Michell Van Vorst.
Among Ford practices which drew FDA's ire and a court challenge in the 1990s were:
- The Blue Oval certification program, which spawned 3-tier pricing because of volume-based subsidies denied to smaller dealers.
- Inadequate parts markups, and warranty rates amounting to two-thirds retail pay for similar work.
- A factory diagnostic center that competed with dealer service departments.
FDA's Blue Oval court challenge was settled after nine years in 2008, but it prompted Ford and other auto makers to tone down or suspend incentive plans that favor large-volume dealers.
When Mullane died in 2000, some members thought the organization would fold. It's smaller, but still active.
“FDA has lost in the past year 500 members from the 1,700 with which we operated all through the past 25 years,” says Van Vorst.
“But that's in line with Ford's dealership reduction because of the poor economy and the push by Ford to combine Ford and Lincoln-Mercury franchises,” she says. “We have kept as members 40% of Ford dealers and 28% of L-M dealers.”
Upsetting for the FDA core group of 1,200 have been federal bankruptcy court judges who upheld this year's terminations of dealers by GM and Chrysler Group LLC, overruling state franchise laws, which Mullane championed and the U.S. Supreme Court upheld.
“The FDA evened the playing field for most auto makers and their franchise dealers,” says a charter member, Peter B. Griffin, now a Lexus dealer in Greenwich CT. “Ultra-low warranty rates are a thing of the past. So are unfair terminations, unless the factory goes into bankruptcy, which remains a stigma for any brand.”
Another charter member, Frank Nappa, of Wayne, NJ, recalls that in 1967 Mullane was elected to Ford's national dealer council and named a committee chairman.
“He was a high-profit, high-volume dealer,” says Nappa. “He could have gone up to the highest elected position in (the National Automobile Dealers Assn.). But Ed preferred to straighten out Ford and help its dealers. There never has been another dealer organization like the FDA.”
Charter member Charles R. Rampone, FDA's secretary, says, “We dealers all needed an Ed Mullane to champion our cause in those Congressional bankruptcy hearings and bankruptcy courts. He would have blown them away.”
The recession saw 19 Ford dealers sell out or close in New Jersey. Ed's son, Mike Mullane, sold Mullane Ford last year.