Editor's Note: A Ward's Dealer Business story in July looked at Ford Motor Co.'s consolidation efforts in certain markets such as Tulsa. Participants say it's working but critics are doubtful as this following report indicates:
Branding the Ford Collection program an "intrusion" into the retail marketplace, outspoken Ford dealer Ed Mullane assails the automaker for "destroying the very franchise system that has helped to bring it to its current level of success."
Mr. Mullane, president and founder of the 1,700-member Ford Dealers Alliance, flatly calls the Tulsa, Oklahoma City and other "collections" an "attempt to take control of the distribution chain."
A Ford dealer in Bergenfield, NJ, Mr. Mullane says early problems experienced in Tulsa strengthen his case.
An additional cash infusion beyond the original $50 million capitalization - reportedly ranging from $3 million to $8 million - was requested by Tulsa Collection President Don Thornton last spring. Ford also backed away from commitments to 100% salaried sales people and a one-price concept.
Ford, declares Mr. Mullane, "would be wise to stop its (Collection) plans right now and instead pursue a restructuring of the franchise system by eliminating the over-dealering problem through a combination of selective buyouts and combining dealer points."
Ford is facing stiffening dealer resistance in attempting to organize collections in Richmond, VA,; Hartford, CT, Indianapolis and Grand Rapids, MI.
The Virginia Auto-mobile Dealers Assn. has threatened to wage a determined battle against a Richmond organizing plan under that state's franchise law. (see page 38)
Legislatures this year in Georgia, Nevada, North Carolina and Texas passed laws stiffening factory-purchase clauses in their statutes.
Mr. Mullane, 86, founded the Ford Dealers Alliance in 1969 in a successful campaign to overturn a Ford network of factory-owned dealerships. The FDA is based in Hackensack, NJ.
