Ford Expects to Benefit From GM's, Chrysler's Dealers Cuts

Ford, the only member of the Detroit 3 who's not seeking financial support from the United States government, said it doesn't plan to apply dealer cuts similar to those of its competitors General Motors and Chrysler. Furthermore, it says the company would rather struggle to consolidate the dealership network rather than to reject them, James D. Farley, Ford director of North American sales, was quoted as saying by The Detroit News.

However, Ford has also established a dealership reduction schedule since 2005, with approximately 700 dealers rejected by the American company since the beginning of the programme. At this time, Ford has around 3,700 dealers nationwide.

Talking about Chrysler's plan, Farley said it could affect lots of people but still, it could help Ford increase their sales in the United States, mostly because some of the customers in rural areas will now go to close dealerships which, in most cases, will be the ones belonging to Ford.

"It seems very abrupt and unplanned. You don't orphan 4 million customers overnight without some fallout," he said about Chrysler's strategy. "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."

Furthermore, Farley said that it would be quite hard for Chrysler to help the affected dealerships, as the manufacturer promised to support them in selling the remaining cars - about 44,000 units - to those remaining in business.

"We are very concerned how they are going to handle those 44,000 units," he said. "It's like a liquidation sale now, and the biggest issue is whether they will cut prices to move the inventory."