As Ford Motor Co. tries to right itself with plant closing and staff reductions, Baltimore area dealers wonder if Ford will try to close their dealership.
Two weeks ago, Ford officials announced a project called “Way Forward” with $5 billion in cutbacks that included reducing a third of its salaried workforce ? about 14,000 jobs, closing nine assembly plants, and the possibly sale of its Aston Martin brand.
Company officials didn’t announce specific reductions in its franchised dealership ranks.
But Ford is continuing to lose market share as monthly sales fall for the automaker, which for the past 80 years has been the No. 2 automaker in U.S. sales behind General Motors.
In August, Ford?s share of U.S. auto sales was about 16.8 percent compared to Toyota, which has a 15 percent share of the market.
Ford?s plant reductions and plans to stop selling several models would reduce its market share to about 14 percent by 2008.
That would mean it would need fewer than the 4,300 dealers currently franchised. Toyota sells almost the same number of vehicles with about half the number of dealers.
While Ford hasn?t announced how many dealerships it plans to cut, published reports from Detroit news agencies estimate that about 600 dealerships would be closed.
State auto dealer franchise laws protect dealerships from being arbitrarily closed without a hearing before a state board.
Ford has been offering dealers $100,000 to $300,000 as incentive to close, said Scott Donahoo, owner of Donahoo Ford in Baltimore.
Donahoo said he doesn?t understand why Ford wants to close dealerships.
“If you are struggling to sell your products, why would you reduce the number of dealers that sell?” Donahoo said.
