I'm worried about Ford Motor Co.'s plan to supply personal computers and Internet access to 370,000 of its employees for $5 a month.
If this was an action by a more altruistic organization to provide speedy information to personnel, there would be no question of the positive benefits of this mammoth program.
However, serious questions arise if Ford dealers, who've experienced a confrontational history with their franchiser, begin to wonder who will be in charge of their fortunes and if this information will be used once again to try to squeeze them out of the retailing loop.
Ford CEO Jack Nasser may have nothing but the best intentions to enhance the fortunes of Ford dealers and Ford employees.
However, until the future role of Ford dealers regarding this program is outlined, a problem exists as to who will use this information and how in the future. To this observer, this has not been clearly defined yet.
Information is power. This proposed garnered information will be a powerful tool in the hands of ambitious factory execs who have minimal regard for dealers' equities. Cutting distribution costs has already been mentioned as a high priority goal for automobile manufacturers. Where better to pare significant costs than from their dealers' already anemic new car grosses?
Speeding up the new vehicle ordering and production process, thereby reducing stockpiles of new vehicles in dealers' inventories, is a long-term exercise. It's been attempted for decades.
Primarily, automobile manufacturers earn huge profits from their captive finance companies who finance dealers' new vehicle inventories. Speeding up the production time for sold new vehicles was bandied about (with minimal success) when I was a young aspiring Chevrolet dealer.
Ed Cole, when he was general manager of the Chevrolet Motor Division, shared his vision of a 10 working day production and delivery period for sold orders. It never happened! In fact, production time was extended several weeks. All this with half the current number of models and optional equipment plus an assembly plant within the state.
I get extremely anxious about dealer equities when automobile manufacturers bust out with radical changes in vehicle distribution as it pertains to the relationship with their dealers. My mind-set is the result of a half-century of parrying Detroit's attempts to erode their dealers' relationship with their manufacturers.
During Mr. Nasser's lengthy interview on national TV regarding Ford's computer giveaway program, there was no mention of how Ford dealers' fortunes would be enhanced by it. In fact, whenever factory execs speak about the industry the dealer is usually at the bottom of the pecking order after stockholders, unions, profits, etc.
I have a personal problem with the current emphasis on Internet sales. A new-vehicle purchase used to be an event which enriched consumer's life. Selling new vehicles like groceries on the Internet denigrates the entire new vehicle experience.
This type of sale was once referred to as bootlegging. The issue that seems to be sidestepped is the local dealers' investment in facilities plus his commitment to the community in which he does business.
One needs only to review the biographies of the annual Time magazine dealer nominees to get a sense of the new-vehicle dealer's personal impact on his marketplace.
New-vehicle grosses are currently almost nonexistent. There is no fiscal justification to currently maintain a showroom and a new-vehicle sales force.
The current U.S. dealer-franchise system has worked to the benefit of Detroit automobile manufacturers for almost a century. Dealers have continually bailed out their franchise "partners" when sub-quality products were produced and foisted on consumers.
Will Internet purveyors keep production lines humming in down times? I think not! I am not nay-saying Ford's position. I am simply suggesting that dealer organizations keep a close watch on the progress of this program in order to protect new-car dealers' equities.
Information is indeed power. And as Lord Acton said, power corrupts and absolute power corrupts absolutely.
Nat Shulman was owner of Best Chevrolet in Hingham, MA for many years.