By on October 25, 2010

With Mercury going the way of Olds and Pontiac, Ford has made much of its intentions to turn its struggling Lincoln brand around. Ford has promised a $2b investment in Lincoln’s product line, and is pushing for the closure of 200 or so Lincoln dealers in order to concentrate the brand’s weak sales at its most successful dealers. But that’s not all. Ford is requiring the surviving Lincoln dealerships to invest heavily, as much as $2m per store, to stay on board the Lincoln Revival Express. But, according to Automotive News [sub], the Lincoln dealers are starting to wonder if they’re being asked for too much. One dealer tells the industry paper

They told us there would be no new products for about 24 months. I don’t know how the stand-alone Lincoln dealers are going to make it, especially those dealers who have to spend $2 million on their upgrades.
Ford has offered several Lincoln stores between $300k and $1.5m to give up ideally-located franchises that they refused to upgrade, but it seems that few dealers are simply rolling over. In fact, the dealer who was offered $1.5m rejected Ford’s offer, calling it “very low” for his profitable franchise. And that’s the polite response. A dealer who was offered less tells AN
“Insulted” isn’t a harmful enough word to describe it. It’s asinine. I’m getting my numbers together and going back. I’m not going to accept this.
Ford, for its part, says the “status quo is not an option,” a position that puts the factory and dealers in place for a nice round of brutal negotiations. And since Ford lacks to the tools to force its entire network to update, it will either have to pay up or live with at least a few remnants of the status quo. And as long as Lincoln’s products remain largely status quo, that’s probably the way it should be.
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10 Comments on “FoMoCo, Lincoln Dealers Face Off Over Buyouts And Upgrades...”

  • avatar

    Ford has the opportunity to prove they are different and succeed. instead they are giving indications that they suffer from the same ignorance as the other domestics and their share increase has only been a fortunate circumstance under which they got lucky enough to benefit from GM and Chysler having less clue than they do.

  • avatar

    I don’t know.  The luxury car experience starts with the dealer.  It’s not like Lincoln has terrible products now…but the dealer experience is already an issue.  If Ford is trying to take Lincoln futher upmarket…then the dealers need to be corrected first.  Hyundai is avoiding this issue all together by taking the dealership completely out of the equation for the Equus.  I’m not sure how successful that would be with a larger number of sales.  The Equus could be a victim of it’s own success and have to result to having some dealer visits if sales are high. 

  • avatar

    Maybe they could take down the strings of pennants, at least.

  • avatar

    This goes both ways. Without casting aspersions on those L-M dealers who maintain high standards, many have simply not inviting places to do business or have a car serviced for at least 10-15 years. Given the product they’ve had to sell, that status quo attitude is understandable.

    Also, let’s face it, do we really know what the superficial upgrades are worth? Once the sale is made, the customer doesn’t give a damn about the latte machine, bespoke-suited salespeople, ergonomic furniture, etc. if I were a top-rated L-M dealer, I’d look at the destruction that those investments in Saturn, Chrysler, Hummer, etc. have wrought and hold off too.

    And really, what product planning answers are Lincoln dealers getting? Ford really has to open the kimono and offer a whole lot more on the product side to incentivize the investment they’re asking for. Seems to me like it’s Ford’s move, not the dealers.

    Whatever good product moves Ford has made of late, they haven’t been able to get how luxury brands work. That will always be the legacy of PAG.  If they’re really that adrift with Lincoln, perhaps the
    best thing to do is just pull the plug on Lincoln altogether right now and pay out those dealers in one fell swoop.

    If Ford were to go back to its roots and sell everything as “One Ford” in North America as they do globally, MAYBE there would be a future chance to “reintroduce” Lincoln-branded products with distinctive drivetrains, styling and features. sold through Ford dealers. That’s the only thing that makes any sense to me at this point.

    Will it happen? As Bill Lundberger would say: “Milt, we’re gonna need to go ahead and move you downstairs into storage B. We have some new people coming in, and we need all the space we can get. So if you could just go ahead and pack up your stuff and move it down there, that would be terrific, OK?”

  • avatar

    This is a very smart move on the dealers part.  The Ford brand still needs a TON of work…and it’s yet to be seen if Ford can do just that.
    Lincoln is just a mess…and the dealers know that selling nothing more than a rebadged Taurus or Fusion isn’t going to cut it.
    With Ford managing Lincoln, there is zero hope of Lincoln being turned around.  Ford just isn’t in the  “we are going to be the best of the best” mindset.

  • avatar

    I understand why people are hesitant to believe Lincoln turn around.  But I don’t think you can use the past to foretell the future for Lincoln.  When is the last time Ford only had two brands to develop?  Two brands to spread R&D and marketing $$$ on?  It’s been a long time.  Ford is very focused right now and I have no doubt that Lincoln is going to be far more attractive going forward.

  • avatar

    Basho. Here’s what history can tell us. The last time Ford only had two brands — and it happened to be these two brands — was in the mid-Thirties. They took Lincoln downscale with the Zephyr. They had to compete with Packard’s110/120, Cadillac’s Sixty (source of LaSalle’s demise), the mainstream Chryslers were separated from the Imperials, etc. Priced just a bit above Buicks, these were the “near-luxury” cars of their day and kept some brands alive.
    While the Zephyr proved to be a dog that couldn’t hunt, it morphed into the beautiful and luxurious Continental. The masses ended up with Mercury as the aspirational step-up brand from Ford.
    So what’s the takeaway? Does Ford start the same thing all over again, or just be Ford?

    • 0 avatar
      Educator(of teachers)Dan

      My biggest problem with your argument (which is historically accurate BTW) is that now you can get all the bells and whistles on a Ford that you can get on a Lincoln.  So now what’s the distinction?  The Lincoln name doesn’t carry cachet anymore.
      Back in the day, Mercury’s had features that could not be ordered on a Ford, but not all the options you could get on a Lincoln.  That was truly a stair-step model.

  • avatar

    The one other point I forget to add was last week’s Curbside Classic, the 1961 Ford Thunderbird. OK, it’s been 50 years, but doesn’t its success (and that of more recent niche stuff like the Shelby, Ford GT, etc.)  prove the public may be willing to pay premium prices for a superior product with the Ford brand name on it?

    • 0 avatar

      Educator(of teachers)Dan: There’s definitely no need for a Mercury (sorry Jerry Flint, may you R.I.P.) and if I read you correctly, none for Lincoln either. And with each passing day, I’m inclined to agree with “One Ford.”

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