Ford offering extra incentives to "orphaned" Chrysler owners?
Ford is primed to receive a bump in sales as a result of the bankruptcies of General Motors and Chrysler, and the Dearborn-based automaker is picking and choosing where to take share from its domestic competition. One area ripe for conquest are customers who've purchased vehicles from soon-to-be closed Chrysler dealerships. Ford is banking that those customers are going to feel left out in the cold, and the automaker is going to provide some sweet deals to bring those consumers over to the Blue Oval.
The incentives range between $500 and $1,000, but they're only available in select regions at this time. The extra cash will help customers that currently own Chrysler vehicles since resale values of Pentastar-branded vehicles have plummeted over the past few months. Many Chrysler dealers that are losing their stores also own Ford dealerships, and the incentives should also help those dealers keep the customers they've cultivated over the years.
According to Automotive News, Ford officials are trying to be very careful not to send the message out to customers that the automaker is gloating about its comparatively positive position. With Chrysler still knee-deep in bankruptcy hearings and Ford still fighting for profitability itself, a bloodthirsty Blue Oval wouldn't look all that graceful.
[Source: Automotive News - Sub. Req. | Image: Karen Bleier/AFP/Getty]
Reader Comments (Page 1 of 3)
inteller 8:41AM (6/03/2009)
Can we leave off the quips at the end? Ford won, Chrysler lost.....there is nothing "bloodthirsty" about that.
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Yikes 8:51AM (6/03/2009)
Ford has won NOTHING until they figure out how to sell vehicles AND make a profit.
C.W. 11:15AM (6/03/2009)
thats right. Ford is doing exactly what they should be doing. this business will either go to the japanese/koreans.... or ford. why WOULDNT they do this?
Randy 9:56PM (6/03/2009)
Ford shouldn't feel sorry for ANYTHING! It wasn't their doing! TAKE IT ALL FORD - WITH A BIG SMILE
SpaceGoatPriest 8:51AM (6/03/2009)
I don't necessarily think Ford has "won" yet. They still have a lot of debt, and I don't believe they are profitable at this moment. They have a long road ahead.
What Ford *did* do was refuse government assistance. They saw the strings attached, and said "No thank you, we will try and weather the storm alone". If they can keep going and bring their sales up, and become profitable again, then yes Ford will win. I personally think they will, but who really knows.
I also think some people won't buy GM because it's like giving more money to the government. That or the agenda of the government ("green" cars) will be all they offer and the market simply does want (I base that on the amount of hybrids sold now).
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John 9:26AM (6/03/2009)
You make good points. Ford saw that making a deal with the devil in Washington would sell too much of their soul.
Ford will still have the flexibility to manage their product portfolio. You can guarantee with Chrysler and GM being micromanaged from Washington they will be forced to make "green" products whether there is truly a market for them or not.
DesiAuto 10:57AM (6/03/2009)
"They saw the strings attached, and said "No thank you, we will try and weather the storm alone". "
You are wrong in saying the above.
Ford already had enough funding from several assets it mortgaged soon after Mullaly joined. They were ready to weather the storm alone well before December 2008.
Don't make things up.
SpaceGoatPriest 11:47AM (6/03/2009)
@DesiAuto
Ok, I don't know for sure they decided not to take bailout money because of the stipulations or whatever reason, but Ford was with the other two making a case to get bailout money. If they knew they had enough money to be fine, then why even go up before Congress to begin with? It just does not make sense to put yourself in that position and know you don't need it.
So, I will amend my statement (since I can't edit lol)
What Ford *did* do was refuse government assistance. I am GUESSING they saw the strings attached, and said "No thank you, we will try and weather the storm alone".
Gloria 11:59AM (6/03/2009)
Wow.............. short term memory is not a strong point of some, I see.
Mulally let himself be berated before Congress, in December, for 2 reasons.
1) If GM and Chrysler did not get any assistance, and had an uncontrolled BK (with no DIP financing), they would have gone Chapter 7 in short order. This would have destroyed the supplier base, and hurt Ford badly. Thus, it was support.
2) As a smart manager, he needed to see what the deal would be. If the government just offered low rate/no rate loans, Ford could have used some of that to pay off some of their existing debt.
That is called looking at all your options, and smart money management. Ford had no reason for any bailout/loan at the time, as they had about $25 Billion in liquidity vs the other 2, who would have been closed within a week............. unable to pay their bills.
mapoftazifosho 9:02AM (6/03/2009)
Agreed, Chrysler makes crap products that nobody wanted. Whereas GM was run by idiots that couldn't readjust to smaller marketshare.
Could they just kill the Chrysler brand? I would much rather drive a KIA than a Chrysler.
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merlot066 6:25PM (6/04/2009)
My thoughts exactly (driving a KIA, not so much). Chrysler had their rebirth in te 80s and they became an amazing company. The problem is that they stood there and stared at their sucess rather than keeping it going. Look at the past few years, they killed the crossfire, pacifica, and other models while offering no replacments for them. Chrysler should've been liquidated, and GM is too big of a company with too much potential to be broken apart.
MikLawry 10:18AM (6/03/2009)
Spoken like a true idiot. If no one wanted Chrysler, then why did they just sell 80,000 cars in May while in Bankruptcy? Just because you do not like Chrysler, do not let it cloud your thinking...duuuuuuhh
n8new 11:20AM (6/03/2009)
Here we go again with the misinformed "cars nobody wanted" perspective.
With complete suspension of production and sales to fleets, the Chrysler group was the 5th largest manufacturer in NA sales in May. Larger than Nissan. Larger than VW. Larger than BMW, Volvo, Daimler, Hyundai, Subaru, Suzuki, Kia, etc. And Honda only passed them after the suspension of production and sales. Yet know one says BMW makes "cars nobody wanted" even though far more people in NA -- besides you even -- chose to purchase a Chrysler product in May.
Please try to open your eyes. It was NEVER a "crap products nobody wanted" issue. It is very apparently a COST OF DOING BUSINESS issue. They needed to reduce their costs and, unfortunately, going through bankruptcy was the best way to do it.
No amount of increased sales on any "wonder car" will save your business if the costs of doing that business exceeds those of your competitors and the amount of revenue you earn.
Apparently enough people continue to want their products to rank them the 5th largest manufacturer in sales volume in NA at a point when we're in a recession, they've suspended production, and virtually halted all fleet sales. Who are these "nobodies" of whom you and your blind brethren speak?
merlot066 6:33PM (6/04/2009)
Guys, please. Open any edition of consumer reports for the past 3 or 4 years and, even though they are biased against american cars, chrysler/jeep/dodge products come in DEAD LAST most of the time. Sebring 16th out of 16, Durango is in the bottom 3 for large SUVs. The only good product they have is the new Grand Cherokee, but that hasn't even come out yet. GM makes fairly decent cars, some of them are downright awesome, the cobalt is a really good car considering it is like 5 years into production. GM has mangement problems like Ford used to (back when they had like 18 vice presidents), but Chrysler had a problem of not selling cars. And maybe chrylser sold 80000 cars because all the dealers that they closed (without offering to take their cars back) are desperate to get cars off the lot. My uncle just bought a Cobalt and he worked the dealer down another 200 bucks after GM declared bankruptcy.
John P. 9:18AM (6/03/2009)
Business is business. I see absolutely nothing wrong with Ford offering to help people out of their Chrysler products. They aren't forcing it upon them.
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patvan 9:32AM (6/03/2009)
But wouldn't Ford dealerships be stuck with an inventory of Chrysler trade-ins that nobody would want to buy used?
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SpaceGoatPriest 9:44AM (6/03/2009)
They would probably just send them to the auction(?). Like if you traded in a really old car, they won't try and sell it. They just take it on trade just to sell you a new one. Customer does not have to deal with the paperwork and the dealer "disposes" of the old car.
Think of the advertisements like "$3,000 for your trade NOT MATTER THE CONDITION!!!!" Those cars don't stay on the dealer lot.
Tagg 10:36AM (6/03/2009)
SpaceGoatPriest is right, they just go to auction or if they're really junk they go to scrap. You'll find groups at auction that will buy the really cheap cars and ship them to Mexico, South America and in some cases China.
John 9:44AM (6/03/2009)
There is nothing to gain by being "graceful" here. People aren't keeping track of stuff like that - they are looking for the best deal. Take no prisoners Ford! It's a unique opportunity and they need to take advantage of it by kicking the competition to the curb. They had the foresight to avoid the land mines of the other two, so might as well reap the spoils.
They are only making statements about wanting to keep GM and Chrysler around because if they vanished, a ton of the suppliers Ford relies on would go too. I'm sure they'd be quite happy being the only US car company, going full force against the imports.
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Matt 9:52AM (6/03/2009)
Well, I guess Ford has to do something to move their lackluster, bland automotive appliances...
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