Ford Says No to Big Dealer Closures

In what appears to be the continuing distinction of Ford as the healthiest of the US automakers, the company has announced it will not follow GM and Chrysler into conducting large-scale dealership closings.

In fact, it may be because of those dealership closings by GM and Chrysler that Ford may benefit from a less crowded field in the marketplace and help it on its path to recovery and profitability.

Ford has already cut its dealer network by about 700 since 2005, and doesn't plan on cutting much more from its current number of 3,700 US dealers.

Last week, Chrysler, currently in bankruptcy, announced it would shed 789 dealers by next month. Reducing its dealer network by 25 percent. GM recently announced it would cut 1,100 dealers next year, as part of a plan to reduce its number of dealers by 40 percent to 3,600, less than the number Ford currently has.

Ford's head of North American sales, James D. Farley, was critical of how GM and Chrysler have managed their dealership cuts in an interview with the New York Times (in a story that ran in the Detroit News too), saying that some of their customers could migrate to Ford dealers, especially in rural areas.

"It seems very abrupt and unplanned," said Farley. "It really depends on how GM and Chrysler handle these orphan owners. If they don't give them a lot of attention, it will result in consumers going to other brands."