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Ford says may review dealer network

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Ford says may review dealer network

Ford Motor Co. may review its vast dealer network for possible reductions as it moves ahead with a restructuring that includes shutting 14 factories in North America, a senior executive said on Friday.

"As we go forward, we will make intelligent decisions, looking at our dealer network, working with our dealer partners, to make sure that just as we are right-sizing our manufacturing footprint, we have the right size for our dealer footprint as well," Mark Fields, president of Ford's Americas operations, said.

Fields was answering a question from a group of auto dealers at an event sponsored by J.D. Power, a day ahead of the industry's major dealer convention.

When asked whether Ford had too many dealer affiliates, Fields said the company's geographic coverage was "very good," but conceded some rural dealerships were less efficient in generating sales than those in the bigger markets.

Ford, the No. 2 U.S. automaker, has seen a protracted decline in its U.S. market share, while its dealer footprint has more or less remained the same. Ford ended 2005 with a share of 17.4 percent, excluding its luxury brands, the lowest level since the late 1920s.

Fields also said Ford was taking a more collaborative approach to working with its dealers as it cuts costs and readies a new line-up more heavily weighted toward passenger cars and hybrid vehicles.

"I think to one degree or another we have been arrogant in the past," Fields said.

Citing strong January sales of Ford's full-size pickup trucks and the new Fusion sedan, Fields said management was confident the company was on track to stanch share losses in an increasingly competitive market.

"We know that the painful choices we are making to idle plants and reduce our staffing create anxiety about the long-term viability of the auto industry itself," Fields told dealers. "But I do not for a moment share the pessimism you're reading about in the press."

Fields said it was vital that Ford's dealers understand that the goal of its restructuring plan, announced in January, was not just to "retreat into smaller markets" by cutting costs alone.

"We will communicate and operate through straight talk because a lack of clarity in our brands, in our product vision and in our pricing is at the root of many problems we face today," he said.

Ford, which Fields said had rankled some of its seasoned dealers in the past by sending junior executives out to offer unsolicited advice on key decisions, is not contemplating any cut in dealer margins, he said.

"Our approach is not thinking how much do we shave dealer margins," Fields said. "Our approach is that as we come up with our products going forward that they have a strong point of view in the marketplace, that they represent good value and good quality to customers so that dealers can earn a good (margin) on them."

Link: http://news.yahoo.com/s/nm/20060210/bs_nm/...wN5bnN1YmNhdA--

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