Editor's Note: This is Jim Ziegler's debut column in Ward's Dealer Business. He's frank, sometimes irreverent and always interesting. We welcome your feedback on his commentary or anything else on your mind. Send comments to Editor Steve Finlay at [email protected]. Include name, city and state. Published comments may be edited for clarity and length.
I've been writing for auto-industry publications more than 20 years, earning a reputation for being a dealer advocate by defending their interests and saying things they can't.
Though it's all opinion and perception, my greatest challenge is the love and hate relationship with Ford Motor Company in my columns, blogs and speeches.
When I'm struggling for topics and material to write about, I wish they'd bring back Jack Nasser as CEO.
He was always good for five or six paragraphs of criticism in every column. But in the last four or five years, everything I've said or written about Ford has been praise.
It's amazing watching this company turn itself around against all odds under the leadership and vision of CEO Alan Mulally.
On several occasions, I've met him personally. His charm and personal charisma are electric, his sincerity genuine. You can't help but like this man. He is a dramatic departure from the sinister entities preceding him back when Ford plotted at the highest levels to replace its dealers with factory stores, intimidate and create programs punishing dissension in the ranks.
Early on, Mulally had Ford executives stand up at a dealer meeting and thank dealers for sticking by the company and making sacrifices in the darkest times.
He told dealers, “There's a perception over the years that we could maybe listen a little bit better..
“I hope that with this new team, starting with me, you're going to feel that we're working together even closer. We're going to be listening to you even more intently.”
Dealers cheered.
That same year I had a one-on-one meeting with Mark Fields, president of Ford — the Americas at the NADA Convention in Vegas, at his request.
“They're right, you are one pretty man,” I told him, referring to an article describing him as having movie-star good looks. He laughed. The meeting was cordial.
At that time, I was on a crusade against the perceived abuses that dealers were subjected to under Ford's Blue Oval dealer-certification program.
Fields assured me it was over, joking they didn't have the money or personnel left in the company to fund something like that even if they chose to. Once again, you couldn't help but like this guy from Ford.
I stood and cheered when it was announced Jim Farley was coming over from Toyota to run Ford marketing. He is one of my heroes, a marketing genius and a powerful addition to Mulally's dream team.
Ford made it through the domestic auto-industry meltdown without a federal bailout or resorting to bankruptcy. It rolled out new product and great marketing.
I am predicting with certainty Ford will be the No.1-selling brand in the U.S. in 2011, with Chevrolet No.2.
Even Lincoln is up 17%.
J.D. Power and Associates say Ford initial quality is significantly improved, contributing to the grab in market share.
We can all cite the reasons and situations that have temporarily slowed the Japanese manufacturers' sales. But no one can dispute Ford is on a well-deserved roll.
However, everyone is not cheering. To quote Carlos Santana from my 1960s DJ days, “You've got to change your evil ways.”
The mood and relationship with their dealers is changing at Ford, from the executive level downward.
I'm seeing Ford flex its corporate muscle, especially with the Lincoln dealers. The auto maker is demanding facility changes requiring millions of dollars in additional investment from the dealer , but with no great amount of across-the-board money on the table from the manufacturer. I suspect, however, selected dealers may be subsidized.
Since 2001, Lincoln sales have plummeted from 160,000 units a year to somewhere around 85,000 now. Ford has thrown together what it is calling a Lincoln “plan.” There really was no plan six months ago. In reality, it's a crap-shoot whether the brand can survive, much less expect an unreasonable dealer investment to have a seat at the table without substantial assistance.
A second issue Ford dealers are voicing is the unconscionably low profit margins on the vehicle invoices. Here's a company posting billions of dollars in profits, and the dealers are selling the Ford Fiesta with a sticker price of $16,300 and a profit margin at full list of only $285.
There's the rub. The advertising allowance on the invoice is higher than the profit margin for the dealers. Despite those razor-thin margins, dealers are expected to substantially invest in their facilities on the threat of losing the franchise.
The mood is getting ugly as Mr. Hyde emerges to turn up the heat.
Industry veteran Jim Ziegler is a high-profile commentary and trainer in the dealership world. As a public speaker, he has addressed hundreds of dealer gatherings and association conventions. He is president of Ziegler Supersystems Inc. Contact him at [email protected]
