SACRAMENTO, Calif. — California New Car Dealers Association President Brian Maas has sent a letter asking Ford Motor Co. CEO Jim Hackett to reverse policies threatening to withhold margin, co-op payments, and Black Label editions of Lincoln vehicles to dealers operating dual facilities who fail to build standalone showrooms for Ford’s luxury brand, according to an Automotive News report.
The letter is part of the CNCDA’s response to a series of communications sent by Ford to 150 dealers in Lincoln’s 30 biggest U.S. markets between April and August of this year. Citing research showing highline buyers prefer to visit dedicated spaces, the factory reversed a decade’s worth of policies promoting shared facilities, threatening to withhold $100,000 annual co-op payments, 3.5% of margin on new-vehicle sales, and Black Label editions of Lincoln vehicles from dealers who don’t already stock them, the report said.
Maas is quoted as sharing “serious concerns” about the new policies in his letter, which requests a response from Hackett by Dec. 8.
“By withholding 3.5% of a dealer’s margin, Ford/Lincoln penalizes each dealer that operates a dual Ford-Lincoln facility hundreds of thousands of dollars per year,” he wrote, in part. “This could push many otherwise profitable dealers into the red.”
Maas also claims Ford’s policies violate a section of California’s franchise laws restricting factories from requiring standalone facilities under “unreasonable” circumstances.
“It is plainly apparent that Ford/Lincoln is implementing these policies to coerce dealers into separating their dualed Ford-Lincoln dealerships,” he wrote, according to the report.
Originally posted on Auto Dealer Today