After receiving concessions from bondholders, employees and the UAW, Ford is now asking its dealers to pitch in on the company’s turnaround plan. Ford is asking its dealers to make a series of concessions that could save the company up to $600 million per year.
According to The Detroit News, Ford is looking to save $300 on the sale of every Ford vehicle sold in the United States over the next five years. The cost cuts would come from reduced dealer incentives, doing away with fuel reimbursements and altering dealer credit terms for financing vehicles. In all, the cuts could save Ford $5 billion over the next half-decade.
Ford has yet to ink an official agreement with its dealers, but negotiations are currently underway. Although dealers are not ecstatic about the proposition, most understand of Ford’s position.
“I’m not happy, but I’m not shocked either,” Kent Ritchey, owner of a Ford- Lincoln -Mercury dealer in Tennessee told The Detroit News. “They’ve gone to the bondholders, they’ve gone to their own employees, they’ve gone to the union. We’ll see how much pain we have to share with them.”
Ford has yet to receive any bailout money and its hopeful concessions from all levels will help the company sidestep federal aid or even the possibility of bankruptcy.
