Ford sales boss Ken Czubay tells AN that the company has worked out a formula for compensation that calculates the three-year average of Mercury vehicles sold at a dealership as a percentage of overall Ford, Lincoln and Mercury sales. The formula also calculates the cost for dealer signage and parts. An AN source claims that dealers who sell zero to 25 percent Mercury products receive $1,500 per unit retailed annually. The number shoots up to $1,650 per unit at 26 to 50 percent of sales and $2,000 for dealers at 51 to 75 percent. The dealer repayment program tops out at $2,500 for dealers who averaged a high 76 to 100 percent Mercury sales over the past three years. Dealers will also get 100 percent of their money back for Mercury parts purchased, and the dealers get to keep those parts free and clear.
Ford President Mark Fields called the dealer payoff "reasonable and fair," adding that it is "beyond what the franchise agreement states. It is beyond what state law states. It's well beyond what other competitors have done in the marketplace."
Some dealers, of course, say the payment is far too small to cover their investments in the Mercury brand. One dealer, who didn't want to be identified, reportedly told AN that he would be losing money even if Ford gave him $500,000.
[Source: Automotive News, sub. req.]