SEND IN THE CLOWNS
Thanksgiving Day(Belch). Sitting here at the word processor with that bloated, drowsy, "I can't believe I ate the whole thing" sort of feeling. The labrador is lying by the fireplace and my little boy and one of his friends are playing upstairs. As I get my thoughts together to write this article, my wife and I are watching "Jeopardy" on television, trying to beat the contestants. Of course, I am absolutely brilliant todayI know every answer instantlymy wife is getting frustrated (actually I am sure she is impressed). Don't you just love these Thanksgiving re-runs (especially if you've seen the show recently)?
In recent articles, you might have noticed that I have been extremely critical of Ford Motor Company's experiments venturing into the retail arena. Back in the July/August '97 issue of this magazine (page 6, column 2, paragraph 6) I said
"I picture that a bunch of young MBA Executives at Ford got together over beer and bad pizza, decided that they could run dealerships better than those stupid dealers."
Unbelievable! I was just joking when I said that. It was such an asinine, ridiculous idea that I thought it would be humorous. Guess what the funniest part is? It's true.
Ford announced (proudly) that the radical dealership consolidation plan that failed to materialize in Indianapolis and Salt Lake City was thought up by an exclusive "Think Tank" of young executives that was formed by Alex Trotman"The Capstone Team".
The Capstone Teamtwenty-four of Ford's finesta veritable plethora of future vice-presidents and leaders described as a corporate incubator (Belch). Part of their thinking was modeling the project after such well-documented successes as CarMax, et. al.
I am sure these bright, young executives are fresh out of some of the world's finest institutions of higher learning. Of course, they are most probably a little short on life's experiences and maybe, a little out-of-touch when it comes to dealing with real people in the real world. That alone qualifies them to be top Ford Motor Company executives.
You would think that Ford would have been a little embarrassed after the debacles in Indianapolis and Salt Lake City. Not so. Arrogance born of ignorance is limitless. They just announced that they're going to do it in Tulsa, Oklahoma and San Diego, California and probably the San Fernando Valley area of California as well.
I've heard that they are going to build these magnificent used car superstores and reconditioning centersand have salaried car salespeople and managers selling one-priced cars and genuine Ford-certified (too expensive) used cars.
We all know that one-price selling and salaried salespeople just doesn't work. You start cutting pay-plans and all of the experienced people and managers will leave you with the quality of salesperson that kind of money deserves and then they sell against you!
Of course, this'll be one of the biggest disasters since Custer said"Okay boys, get down there and kick those Indians' ass."
I would love to be a General Motors or Chrysler dealer in Tulsa right nowor better yeta little Ford dealer just outside of the test area. Any dealership in Tulsa or San Diego who does traditional car sales (with negotiation) is going to clean up. A little small town Ford dealership, just outside of the test area could be selling 500 units a monthovernight.
A Chevrolet or Dodge dealer could own the market (if their factories don't interfere).
I predict that Ford will lose major percentages of market share in every market where they try this fiasco. Of course, I am not as well educated as "The Capstone Team", but I know how to sell more cars at a better profit with happier customers than these half-baked, untested theories ever will.
This is Ford's big chance to dump some of those "Over-Residualized" (too expensive to sell for what you've got in 'em) off-lease cars and corporate buy-backs that they've been taking such a bath onunder the guise of "Factory Certified Used Cars". What a great idea...only the dealers and the public eat the loss.
If General Motors and Chrysler don't do something really stupid herethis is going to be the line in the sand that will bury this nonsense. Of course, don't underestimate Chrysler or GM. Recent history has shown that Ford has not cornered the market on implementing stupid ideas that are guaranteed not to work.
The worst thing that could happen is for the other manufacturers to go "heads-up" against Ford with a similar project and ruin the value of the test. If GM and Chrysler will just stay out of it, leave their dealers alone, they will re-take major percentages of market share back away from Ford in every market where Ford implements this goofy strategy.
Of course, Ford might cheat. They could give their Capstone project dealerships preferential inventoryor when they sell a fleet deal where they "recalculateoradjust an invoice" (discounting thousands of dollars) to one of their big corporate clients (a price that their other dealers can't even begin to compete with). If that happens, I expect to see a line of attorneys beating their doors down.
Remember this, it's true that Ford has posted some phenomenal profits recently, BUT most of that was from restructuring and accounting and reorganizing, negotiating with suppliers, cost-cutting.
What do you call the first owner of a brand new 1998 Ford Taurus? answer"Hertz"
Reports have it that Ford is not making a profit on any of their front-wheel drive, new technology carsthe Taurus/Sable or the Condor/Mistake or Continental. On the other hand however, the rear wheel drive Crown Victoria/Marquis and the Lincoln Town Car are hugely successful and profitable. Of course this is technology introduced before the current intellectual, international regime came to powerback when car-people were in charge at Ford.
Trucks are starting to wobble and the Expedition/Navigator is "red hot", but they stole their own Explorer market.
I believe what we have here is out-of-touch people building allegedly ugly cars that don't sell to anybody except when they are highly discounted to corporate fleets and rental car companies or when they show up as highly-discounted used program cars. These are the same people who built the "New Taurus"(Belch) and actually brought that turkey to market at a cost that staggers the feeble mindthey actually believe that they have a clue about what the public wants and needs. History is full of the well-meaning with no foundation in reality. Of course I resent the implication that traditional car dealers are dinosaurs being sucked down into the tar pits.
Well, enough about all of that. After all, it's Thanksgiving in Atlanta and I have much to be grateful for; a fine home, beautiful caring wife, wonderful nine-year old son, my labrador, my good health and a swirling snifter of vintage amber-colored cognac cupped in my hand as I sign off. Wishing you and yours the best into the coming year.