Ford seeks to allay dealers’ worries with ‘comeback story’

Ian Thibodeau
The Detroit News

Las Vegas – The expectations hadn’t been this high in a decade. Nor had the questions facing Ford Motor Co. been so numerous.

Some 4,000 dealers from around the country gathered here this week looking for answers inside the same ballroom at the Bellagio Hotel and Casino where, in 2008, former CEO Alan Mulally showed the new Taurus that would help Ford brave the recession under his "One Ford" rallying cry.

Jim Hackett, president and CEO of Ford, tells dealers at the Las Vegas meeting that for all the talk of autonomous vehicles, he and his team are not ignoring the SUVs and trucks that pay the bills now.

This time, dealers wanted to know what new products they’d be selling to fund Ford's investment in autonomous vehicles. Some were still angry at not having been warned before Ford announced it would stop selling sedans within the next few years.

“There’s a guy in my showroom who wants an Escape — he’s not worried about where the future is going,” dealer Tim Hovik said before the meeting started this week. Hovik, owner and general manager of San Tan Ford outside of Phoenix, is one of the top Ford dealers in the U.S.

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But while several U.S. dealers told The Detroit News they came to the "Inside the Oval" event skeptical and unsure whether CEO Jim Hackett had a vision, the dealers The News spoke to said by the time they left, they had more confidence in Ford's position.

The company is going after Jeep with off-road and rugged utility vehicles. It's diving into a strong 2019 U.S. economy with new Ranger and Super Duty pickups. An all-new rear-wheel drive Explorer and all-new Escape will hit showrooms next year. The Bronco is coming in 2020. So is a smaller, unnamed off-road SUV and an unnamed 2020 battery electric vehicle, which dealers saw this week. And Ford plans to fill the spaces left by the discontinued Fiesta, Focus and Fusion sedans with similar-priced crossovers. 

The Ford SUV lineup is introduced by Jim Farley, Ford executive vice president and president of Ford Global Markets. The company is going after Jeep with off-road and rugged utility vehicles.

The average age of Ford's lineup will be the youngest in the game come 2023, executives told dealers. It’s currently one of the oldest. High-volume nameplates like Mustang, F-150 and Bronco will get electrified powertrain options, which Kumar Galhotra, Ford president of North America, said will help Ford grow the number of electric vehicles it sells to 600,000 units in the next five years.

Hackett made clear that for all the talk of autonomous vehicles, he and his team are not ignoring the SUVs and trucks that pay the bills now, several dealers told The News.

Officials plan to cut average delivery time to dealer lots to 38 days within a few years; it's at 82 now, the same it's been for years. And Ford plans to work with dealers to start a new loyalty program that rewards returning customers, something dealers and company officials said could generate some extra cash and keep people buying Fords for longer.

All the new product gives Hackett and company some breathing room while they try to figure out how to make safe, profitable autonomous vehicles.

"They didn't just say what the dealer body needed to hear," said Rob Sneed, general manager of Power Ford in Albuquerque, New Mexico. "He filled in most of the gaps."

Replacing small cars

Hackett and his team came to Las Vegas to put everything they could on the table for the people selling the vehicles.

They didn't give dealers specific answers on what would replace the small, affordable cars that bring first-time buyers in the door and get them into the system. But they spoke generally about how they'll build the lineup and bring in smaller, rugged vehicles to fill those spaces at the same price point as a Fiesta, Focus or Fusion.

Ford dealers also got an apology for the way the leadership announced in April the decision to cut cars, according to Greg Balasco, owner of Lakeland Ford in Tampa, Florida.

Dealers drove the 2019 Ranger in Las Vegas. They saw the new rear-wheel drive Explorer, redesigned Escape, as-yet-unnamed 2020 battery electric vehicle, an unnamed small "rugged" SUV some call the baby Bronco, and the Mustang GT 500.

And then, according to several dealers who spoke to The News, they listened to company leaders explain, piece by piece, what they had been working on, and how that would affect dealers.

The leadership felt they had to give the people selling the vehicles some peace of mind. The company isn't in crisis, but it is going to change under Hackett, according to Jim Farley, president of global markets. 

"It's kind of a personal meeting for me," Farley said on the second night of the week-long dealer event. His first dealer event was that 2008 meeting in the midst of rising gas prices. The company rolled out the new Taurus then, and it was up to Farley to get the dealers on-board.

"We all knew what was at stake (then)," he said. "We've been busy for a year now. Most of it in private. We all wanted (this week) to be just as special, because it's such a different time for us. It's a comeback story, but it's a different comeback story. We want it just as bad."

He added: "Instead of a Taurus, it's now an electric car."

Jim Hackett, president and CEO of Ford, tells dealers at the Las Vegas meeting that for all the talk of autonomous vehicles, he and his team are not ignoring the SUVs and trucks that pay the bills now.

'Rowing ... in same direction'

Judging by the usual metrics, it's been harder to believe in Ford lately.

Ford’s stock price hovers below $9 per share. Off about 20 percent since Hackett ascended to the top job, the price is at a six-year low. The company is planning global layoffs to its white-collar workforce, leaving rank-and-file Ford employees uncertain about their future. Senior leadership is pushing to get North American profit margin back to 10 percent — it was at 7.4 percent in the second quarter of 2018.

Company officials, Executive Chairman Bill Ford Jr. included, say that a planned $25.5 billion in operational cost cuts and $11 billion global restructuring don’t amount to a crisis. The company is profitable, they say. Hackett and his team are getting Ford ready to brave the next downturn, whenever it comes, and a future with more electric vehicles and self-driving vehicles.

Some dealers who spoke to The News said they believe product plan is strong, and they better understand how the trucks and SUVs fit into the model for Ford's future, which incorporates more than the gas and diesel vehicles they currently sell.

“There’s a cohesiveness at Ford right now,” Hovik said after he attended a town hall-style meeting this week. “It feels like everyone’s rowing the boat in the same direction for the first time in a while.”

Twitter: @Ian_Thibodeau