Ford Credit Shakeup

DETROIT May 17, 2004; Poornima Gupta writing for Reuters reported that Ford Motor Co.'s finance arm will slash branches, shift jobs, and add services in an effort to streamline operations, the automaker said on Monday.

Ford Credit, which funds vehicle purchases and leases through Ford dealerships, will pare down its U.S. and Canadian sales operations to 78 branches from 163, and have them focus on financing all of the company's car brands instead of one or a few as in the past.

About 30 percent of the 3,100 employees who work at the existing Ford Credit branches and in the regional offices will be asked to relocate or change positions over the next two years as a result of the plan, Ford said.

However, all affected employees will be offered relocation funds if they choose to transfer, and the new organization is expected to have the same number of employees, Ford Motor Credit spokeswoman Melinda Wilson said. No layoffs are planned.

Currently, many of the sales branches focus on financing a single brand, such as Jaguar or Ford, but car dealership groups that work with these credit branches are multi-brand, Wilson said.

Regional sales offices for those brands will also be combined, resulting in 11 new regions instead of the 18 currently. Sales hours will also be extended.

Ford Credit funds auto purchases through Ford's more than 12,500 dealerships. It finances new, used, and leased vehicles and also offers fleet financing. Its insurance arm offers automobile insurance.

Ford Credit had its best-ever quarter this year, posting net income of $688 million in the first quarter. The company has $179 billion in managed assets and 19,000 employees worldwide.

Though presently an important source of profit for Ford, the credit arm had some problems a few years ago. In December 2001, Ford fired the head of the unit and warned it would place hundreds of millions of dollars in reserve to cover credit losses from bad loans.

The new Ford Credit branches will offer larger, brand-specialized staffs, providing more service to dealers on weekends, and career-advancement opportunities for staff, Ford said.

Ford dealers "wanted increased service and longer hours," Wilson said. "This is responding to their needs."