Premier Auto Group and Blue Oval are programs aimed at future success, but one has many more critics than the other

Ford Motor Co. executives talk fondly of the Premier Auto Group, but they're tired of talking about Blue Oval. Or at least they're tired of defending it amid dealer criticism.

Ford calls PAG a bold new program for future market position success. Ford deems Blue Oval an innovative plan for dealership success. It requires dealers to meet stringent standards for customer satisfaction, sales and service.

But while PAG has many admirers and only a few skeptics, Blue Oval is the target of abject criticism from several dealers who see it as a power grab by the manufacturer.

To be sure, not all Ford dealers oppose the Blue Oval certification program. Some speak highly of it. But others disdain it — and some of the harshest critics are among the 91% of Ford dealers who are Blue Oval certified.

Much of the criticism is directed at Ford CEO Jac Nasser. He's seen as the Blue Oval point man, the executive who's willing to risk miffing some dealers in order to push the program through.

“We feel very strongly about it,” Mr. Nasser says of Blue Oval.

Too strongly, according to some dealers.

Robert Maguire, chairman of the National Automobile Dealers Association, recalls an unpleasant encounter with Mr. Nasser on what's become the touchy subject of Blue Oval:

“Shortly after I became NADA chairman, I met Jac Nasser and told him about dealers concerns with Blue Oval. At that point, he said he didn't want to hear about it.”

Ralph Seekins is the incoming chairman of the Ford Division National Dealer Council and the author of a blunt memo sent to Mr. Nasser.

Mr. Nasser had asked Mr. Seekins to talk to 200 Ford dealers and compile a list of why Ford's relations with its dealers are so strained. Mr. Seekins then wrote the 14-page memo, outlining the results of the informal survey. But the memo was leaked to the press, igniting a firestorm because of its criticism ranging from product quality to, of course, Blue Oval.

The person who leaked it was probably a dealer on the council, speculates Jerry Reynolds, the outgoing chairman.

Mr. Seekins says, “Look, the memo was intended to be private. Ford wanted us to be very honest in our assessment. The effort was properly conceived and shows that Ford is working to repair its relationship with its dealers.”

Quality was the issue most dealers talked about according to Mr. Seekins. Much of the attention was focused on Mr. Nasser's leadership.

“Basically, the dealers indicated they wanted a change in attitude or in leadership,” says Mr. Seekins. Some dealers complained Mr. Nasser was focused too much on PAG, and was not paying enough attention to fixing quality problems.

Mr. Reynolds agrees quality is a big problem, but isn't sure PAG is diverting Mr. Nasser's attention.

He explains, “That might be the perception, but it probably isn't reality. Nobody knows the time Mr. Nasser spends on PAG as opposed to the Ford division.”

But Ford needs to improve quality, say Mr. Seekins and Mr. Reynolds. They agree the buck stops with Mr. Nasser.

“When you have problems in a company, you look at the top first — that's who determines the culture for the company, and right now there are problems,” Mr. Seekins says.

Meanwhile, Ford executives met with dealers last month to begin changing the negative aspects of the relationship.

“Mr. Nasser attended each of the meetings and asked questions and listened to the criticism and solutions,” says Mr. Seekins. “He also met with dealers in other parts of the country. His tone and his message indicate he understands the importance of the dealer body. If he doesn't, he sure has me fooled.”

Blue Oval was an agenda item at those meetings.

“There is still a lot of fear that Ford will use the program to control the dealerships,” says Mr. Seekins. “We're independent entrepreneurs. We don't like someone looking over our shoulders seeing if we're doing the job right.”

Much criticism of Blue Oval focuses on paying certified dealers an incentive — equaling about 1.25% off invoice prices. Non-certified dealers don't get that incentive.

To critics, that's unfair — and some say unlawful — two-tier pricing.

Detractors also say the program is a power grab that threatens dealers.

“There are 123 criteria that dealers are measured for,” says a Ford dealer, who requested anonymity. “Eventually, missing one criteria could cost a dealer Blue Oval-certification, a lot of money and the prospect of being driven out of business by financial attrition.”

Another dealer, who also spoke on condition of anonymity, for fear of “retribution,” says, “We are Blue Oval certified. The program is a death sentence for any dealer not certified. Ford's long-term Blue Oval objective is to eliminate as many dealers as possible as quickly as possible at the least possible cost to the company.”

Mr. Seekins says most dealers understand the benefits of the program.

“Blue Oval has been good for my dealership. It has increased employee morale, increased customer satisfaction scores and increased my profit. I can live with the program in its current form,” he says. “We have the mechanisms in place to protect against the dire predictions some dealers are making.”

Many changes to the program have occurred in the last 18 months. Ford Division President James O'Connor says it's time to stop fiddling with the program and give it a chance.

But many dealers aren't willing to give it a rest.