Ford has a dealer development program aimed at helping those who lack up-front capital open a dealership. The dealer pays Ford back with profits from the business, and slowly buys out Ford's stake. There are 81 dealers in the program now, 62 of which are minorities who the program was originally intended to aid, and Ford has offered to buy all of them out by returning the dealer's full investment.
Some dealers say Ford is trying to shed the minority-owned franchises, and Ford denies the accusation, saying that it is simply trying to let struggling dealers exit the business without losing everything, and that it wants to get its dealer organization in line with its economic reality. To be fair, the offer has been extended to every dealer in the program, some of which even are profitable. As well, for dealers who rely solely on the dealership for income, there's a chance Ford will give them an additional $100,000.

No matter what's the real impetus, at least Ford is trying to make an offer that isn't pennies on the dollar. Said Hispanic dealers' alliance chairman and dealership owner Fernando Varela, "In tough market conditions (when) you're not making any money, they're offering you something. Other manufacturers let you walk off, and you lose your investment." Ford has given dealers until April 1 to decide on the buyout; dealers are asking to have until June 1 to make the decision.

[Source: Automotive News, sub req'd]


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