and Lincoln Mercury dealerships using an electronic parts catalog provided by Dealer Computer Systems Inc. likely will need to find a new source for such data due to a parting of the ways that has led to a lawsuit.
For more than 10 years,Motor Co. has licensed its parts data to DCS, which then provided the information to 2,471 Ford and Lincoln Mercury dealers in a catalog called CPD (Computerized Product Display). CPD is on more than 8,000 computer workstations in those dealerships. The contract ended in September.
According to court documents, Ford offered a new contract to DCS, which it rejected on the grounds it was too restrictive and harmful to its business. The auto maker then offered to extend the current contract with a 3-year wind down period.
Other documents say Ford notified DCS in September 2003 that it was not renewing the contract.
DCS, a division of Universal Computer Systems, a dealer-management systems provider, allegedly turned down the contract-extension offer, and instead filed a lawsuit against Ford in U.S. District Court in Houston, alleging various antitrust violations.
Ironically, Ford developed DCS (still called Ford Dealer Computer Systems, or FDCS by many dealers) before selling it to UCS several years ago.
Two competitors to DCS, ProQuest and Infomedia’s Microcat Div., currently receive parts data from Ford that they provide to some dealers. According to the court documents, Ford has offered both companies licensing agreements similar to the one offered to DCS.
In an e-mail obtained by Ward’s, John Sullivan, manager-parts supply and logistics service and quality for Ford, tells dealers the auto maker would continue providing data to DCS through the end of May to give dealers time to assess alternatives.
Meanwhile, DCS filed a preliminary injunction in early March to force Ford to continue providing the data while the case is pending, but the court refused. An appeal is scheduled for late July.
Russ Rogers, parts manager for Jack Kain Ford in Versailles, KY, and a longtime CPD user, says he is disappointed how both companies have handled the dispute.
“It is a shame they were not able to come to an agreement,” he says. “The dealers are caught in the middle.”
Ford dealers who are DCS customers tell Ward’s they are concerned because of long-term contracts they have with the DMS vendor and wonder if they will have to continue paying DCS for services it is no longer able to provide. Some dealers are locked into contracts extending to 2012 for CPD.
An employee for another dealership says its contract stipulates DCS is not responsible for delays in the parts data. “Does this constitute a delay or an inability to provide services promised?” he asks. “It looks to me as if they are out of the Ford parts business.”
Dallas attorneys, James D. Blume of Blume and Stoddard, and Richard Faulkner, with Faulkner Slaughter PLLC, recently filed a class action on behalf of 11 Ford dealers and have sent e-mails to thousands of dealers inviting them to join.
The suit alleges DCS signed dealers to contracts for CPD that extended beyond the time of its contract with Ford and did so knowing for two years that Ford was not renewing the contract.
The suit also claims DCS was signing dealers to CPD contracts as late as November 2005, months after the existing contract expired, unbeknown to the dealers.
Other allegations allege DCS provided dealers with computer equipment other than what their contracts stipulated.
An information technology director for one dealer group, who asked not to be named, says he considers Ford’s actions to be a favor to its dealers. He says Ford is developing its own parts catalog, called Ford Catalog Advantage, to provide the data to dealership service and parts departments.
Dealers say Ford is promising it will be able to update the information nightly to their dealers’ DMS units in the near future. DCS provided data with a 2-month lag time, according to dealership personnel. That means dealers using CPD will have to find other alternatives by the end of July.
Ford declines comment, citing pending legislation. UCS, meanwhile, has not returned phone calls regarding the matter.
Says one parts manager: “I can’t get either company to talk to me to tell me what’s going on. I’m going to have to limp along until I figure out what we’re going to do.”