Massive Ford Dealer Cuts Not Needed, Mulally Says

WAYNE, MI – Ford Motor Co. is not looking to significantly reduce its U.S. dealer network, which currently stands at 3,770 stores, the auto maker’s top executive says.

Following a ceremony here announcing U.S. production plans for a new Ford Focus, President and CEO Alan Mulally says the auto maker has no intentions of keeping pace with rivals General Motors Corp. and Chrysler LLC as they trim thousands of dealers across the country as part of their ongoing restructurings.

“Ford does not have to match dealer cuts,” Mulally says. “We moved decisively to focus on the Ford brands, divested Aston Martin (Lagonda Ltd.), Jaguar (Car Corp.) and Land Rover, took down our relationship with Mazda (Motor Corp.) and put Volvo (Car Corp.) up for sale.

“So there’s a whole distribution network that goes with each of those (brands),” he says.

Some more surgical trimming is likely, however. Ford dealers have asked the auto maker to consolidate the number of stores it has, especially in urban areas, Mulally says.

“They want their throughput and profitability up.”

Meanwhile, Mulally says Ford chose a good time to divest its non-core brands, noting as the economy worsened, it has become increasingly difficult for auto makers to sell operations.

“You can imagine what everybody (trying to sell brands) is going through now in this environment,” he says. “It’s really tough.”

Thanks to a $23.4 billion line of credit secured in 2006, Ford has sufficient liquidity to fund its product plans, Mulally says.

Ford CEO Alan Mulally says product cadence on track.

“A lot of people were wondering if we were going to pull back,” he says. “But we’re staying absolutely on our product cadence.”

Mulally says Ford remains “humble” following Chrysler’s bankruptcy filing last week.

“This is a tough time for the U.S., and economies around the world,” he adds. “I’ll always be proud to stand up for the importance of the industry, but I’m also absolutely committed to the transformation of Ford.”

Ford officials are careful to downplay any advantage the auto maker may gain from the financial problems faced by Chrysler and GM. Mulally simply says the “buzz about Ford” is terrific.

“The press about Ford around the U.S. and the world is just incredible. I wish everybody could just feel what this is like,” he says. “People absolutely understand Ford is in a different place, and not only do we have financing to fund (our) transformation, but (consumers) are seeing what’s really different about Ford.”

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