Ford CEO Jim Farley poses with a Ford F-150 Lightning pickup truck in Dearborn, Michigan, May 19, 2021.
Rebecca Cook | Reuters
Ford Motor dealer Marc McEver was brought back when he heard about the automaker’s plans to split its electric car and legacy businesses as part of a restructuring under CEO Jim Farley.
The owner of the Olathe Ford Lincoln near Kansas City, Kansas, heard the news around 6:30 a.m. CST last Wednesday and was “calling Detroit” for 15 minutes trying to figure out what was going on. happening.
“When it was first announced, I was pretty confused,” McEver said. “I was in a panic before I shaved that day.”
But after speaking with Ford officials since then, McEver, whose dealership specializes in commercial vehicles and a fleet of vehicles, is now excited about the plan.
“After talking to some people at Ford, I feel a lot better,” he said. “All of this is pretty ingenious.”
The appeasement concerns of dealers like McEver are expected to be crucial to Ford executives on Saturday during the company’s franchised dealers meeting at the Association of Motor Vehicles Show. National auto dealership in Las Vegas. The annual event attracts thousands of franchisees, including many of Ford’s approximately 3,100 retailers.
Farley made waves across Wall Street and the auto industry last week when he announced separation plans. He called them “one of the biggest changes” in the century-old company’s history, which included dealerships “specializing” in certain vehicles.
Farley said some dealers like McEver may specialize in fleet vehicles, while others only deal in electric vehicles or sell to retail customers.
“We’re going to bet on the franchise system,” Farley said. “It’s a different bet than I hear from others. But we’ll do it by asking them to specialize.”
‘Better than Tesla’?
Farley’s plans add significant pressure and change to franchisees, something many Wall Street analysts see as negative for legacy automakers like Ford when it comes to electric vehicles. . They argue that the system eats into vehicle profits and can provide more incongruous experiences than EV startups and Teslaown their stores and sell directly to consumers.
Those looking to sell electric vehicles may have to operate in entirely new ways, including ordering online, pledging not to carry any inventory and selling at transparent non-negotiable prices, as some dealers Dealers took advantage of either high demand and low inventory to mark the price.
“Over the next 60 days, we will talk to all of our dealers worldwide and develop a specific list of standards for a new experience that will be better than Tesla,” Farley said.
Ford and other legacy automakers are obligated to sell through contract franchisees. Many states also have laws that block direct sales of cars by automakers to consumers.
Franchisees for decades have struggled to maintain the traditional system of sales. Traditional car manufacturers see dealers as particularly important partners when it comes to vehicle maintenance and community engagement.
Big meeting
Spokesperson Debra Hotaling said Ford will try to address any and all concerns about the plans announced at Saturday’s NADA meeting.
“That’s why we’re doing this. We really work hard to talk to our agents and listen to them,” she said, echoing Farley’s comments about the job. with your agents about these plans.
These changes can cost dealers millions of dollars in upgrades depending on their size. They can also force some individual agents to sell to larger, sometimes publicly traded companies, such as AutoNation and Lithia Motors.
Consolidating dealer networks has been a major trend in recent years amid the coronavirus pandemic and automakers are pushing dealers to invest more in electric vehicles.
Ryan LaFontaine, CEO and co-owner of LaFontaine Automotive Group in Michigan, said he’s excited about electric vehicles, but wants some more details on Ford’s plans and requirements.
“It’s a big change, but it’s going to be something that we’ve embraced and we’re excited about,” he said. “It makes sense, but we’re still waiting as dealers to understand the full impact.”
LaFontaine said his company, which has three Ford dealerships and 26 other stores in Michigan, is “everything” when it comes to electric vehicles.
The company, which sold nearly 44,000 vehicles last year, has invested nearly $1 million in its transition to electric vehicles. His franchises range from the automakers Detroit and Toyota to Volvo-backed Volvo Start EV Polestar.
“It’s a total game,” he said. “If you don’t adapt, really what you’re doing is saying you’re not going to continue with Ford or believe in the vision they have. Not just Ford, all manufacturers.”
