Post-Tribune staff and wire reports
DETROIT - Ford Motor Co. said Tuesday it will trim dealerships in 18 metropolitan areas nationwide, blaming sliding car and truck sales for the decision.
Most of the metro areas are east of the Mississippi River, but the company would not identify exactly what markets would be targeted. Dealers were told of the effort at the company's annual dealership meetings, which wrapped up last week in Las Vegas.
While it is not known if any dealerships in Northwest Indiana would close, spokespersons for two local dealerships said Tuesday they are not opposed to the concept.
"If you look around, there's a Ford dealer every five or six miles, and that doesn't make sense. Then take a look at your foreign dealerships. Mazda, for example, has its store here and I think one in Hobart, and then its next one is somewhere in Illinois," said Pete Blagojevic, general manager for Art Hill Ford in Merrillville.
Anthony Iannone, general manager for Webb Ford in Highland, has been with Ford Motor Co. for 18 years and once owned a dealership in North Carolina.
"There's no telling what they're going to do for sure, but having worked for them, I think that they're probably looking for the little dealers who are just squeaking by and not looking for longevity. And that's not a bad thing at all. They want to make their larger stores more viable," Iannone said.
Company spokesman Jim Cain said in certain markets, Ford has more dealers than its market share can support profitably over time.
Ford has about 4,300 Ford and Lincoln-Mercury dealerships nationwide, and dealer profits have declined an average of 10 percent in the first half of 2006, the company has said.
Its market share has declined from around 26 percent in the early 1990s to 17 percent at the end of July.
Cain said Ford has no target number or timetable for dealership reduction.
Consolidation would be done voluntarily through negotiations, with stronger dealerships buying out weaker ones, Cain said, adding Ford will not buy any dealerships.
In some urban markets, Ford dealers compete against each other rather than other automotive brands, some of those dealerships aren't profitable, Cain said.
"In these multipoint markets, that's the toughest place to make money," Cain said. "You have many more Ford dealers competing for limited market share."
Ford shares rose 9 cents, or 1.2 percent, to close at $7.92 on the New York Stock Exchange on Tuesday.
In the past, when a dealership would close, Ford would try to replace it, but now the company will review those decisions more closely, Cain said.