Ford Motor Co. spent most of 2018 under a cloud of uncertainty.
CEO Jim Hackett has been slow to detail his plans for the company's $11 billion global restructuring and some dealers have questioned how the brand will keep entry-level customers after slashing all sedans from its North American lineup.
But dealers and company officials ended the year on a high note after gathering for a morale-boosting, high-energy October meeting in Las Vegas. It was the first time many dealers got to hear directly from Hackett, and the meeting provided the most extensive look to date at the brand's future product.
Todd Dyer, chairman of the Ford National Dealer Council, said the meeting left dealers with a better sense of the company's direction and a renewed commitment to press on despite declining new-vehicle sales.
It could be a good tone-setter for what's expected to be a strong 2019 with a host of new products that will include the Ranger midsize pickup and next-generation Escape and Explorer utilities.
Dyer, 43, owner of Marshal Mize Ford in Hixson, Tenn., talked with Staff Reporter Michael Martinez in December. Here are edited excerpts.
Q: How was 2018 for Ford dealers?
A: Overall, 2018 was a solid year. I think we all saw a few blips in the radar that had us worried. The market's going to be down just a little compared to 2017, and obviously interest rates have moved up a little bit and caused everybody to at least watch their business a little closer.
Every time the Fed decides to go up, obviously our interest rates go up and we get concerned for the consumer side of the business. But it was a good year. It's going to be fine. I'm not going to call it a banner year; 2019 will be better and we'll look forward to that.
Ford finally started to give dealers some much-needed fresh product in 2018. What was customer reaction to vehicles such as the Mustang Bullitt and freshened Edge?
The new Edge is just arriving. It's going to do well, thanks to the changes they made to the body and the interior of the vehicle. It's enough of a change to draw our consumers' attention. We have a lot of people coming in and looking for that, which we needed.
The Bullitts went quick. In the Southeast market, they didn't hang around in anyone's inventory more than a couple of weeks. Consumers are excited to see that product and are already licking their lips for what's next. The Mustang is still so iconic and reaches people from their teens to their 60s and 70s, so it's fun to have that product available.
How has the Edge ST done? Are customers receptive to a performance utility vehicle?
I think the market overall needs those products. The buyers for the ST line, from what I've seen, is a certain segment of consumers who want something different. It has its functionality and a place in the market, but something that drives the way it does and is fun and engaging draws the consumers.
The consumers we've seen and the range of consumers who've driven those vehicles, range from anywhere in their 30s all the way to their 50s and their 60s. When you have a product that can cross like that and is fun and entertaining to drive, people can get in there and actually enjoy where they're going, instead of having something that just takes them from point A to point B.
Does Ford's "Built Ford Proud" advertising campaign strike the right attitude, and have customers responded to it?
I think it's 100 percent the correct attitude to take going forward. We have to be proud of the brand that we are. Sometimes advertising can become just noise. We all try to do things with ads, but if you don't have something that separates you, you're just another advertisement that's running. I think Built Ford Proud puts a stamp on where Ford is, where we've been and where we're going.
Personally, I think it's the right approach to make sure everybody knows who we are, what we're doing and where we're going and that Ford's not going anywhere. Even as everyone wants to talk about autonomy and cars driving themselves, you still have to remember there's manufacturing involved in those and that business isn't going anywhere. Ford made that statement strong in those ads.
Did dealers feel any negative effects from the two weeks of F-150 downtime following a supplier fire in May?
Somebody needs to write a book on that. It was amazing what happened and how fast they responded. When everyone read about it and started wondering what's going to happen, my phone started to ring also. We started to wonder if we were in trouble, where's the inventory going.
Everybody got nervous for a week, but as the year progressed, you never felt like it happened. You have to give kudos to everybody who made that happen. Somebody moved heaven and earth. We never felt like we were out of inventory. As everybody knows, you have to have the F-150. We moved right forward and inventory levels never dipped to be of any concern.
How have the redesigned full-size trucks from Ram and Chevrolet impacted F-150 sales?
We've seen some customers cross-shop. Both of those products are better on the eyeballs than they've been in the past and they've promoted a lot of the improvements they've made. But we've not seen a loss from the consumer standpoint.
We've seen consumers go look, but when they come back and compare the products and we can show what the F-150 still has, I don't think we've lost sales. We're still the industry leader. When you look apples to apples, we're still the best product in the marketplace.
Which new vehicle coming in 2019 will have the biggest impact?
I think each region in the country will experience different reactions with different products. All products will be hits across the country, but the impact depends on where you are. I think the Southeast may experience the Ranger being No. 1.
But there's no question the other products, when they launch, are going to help. They'll bring excitement. Any automobile dealership needs one thing and that's excitement, whether it's around new products or incentives. As long as we have excitement in the showroom, we're going to sell automobiles. Ford's been teasing things and promising there's more to come.
I'm personally most excited about the Ranger. I know it's not out until early 2019 but I already have consumers in the showrooms looking for the product. They're chomping at the bit to buy the product, and that's a really good sign.
Who will the typical Ranger customer be? Can Ford conquest a lot from Toyota, GM and others?
I think it's going to be interesting to see. We have consumers who are in older F-150s who are going to look to Ranger just from a size standpoint. They'll feel it fits their needs better now that they have both options. I do think we're going to cause a major dent for Toyota and Chevrolet because we now have an opportunity.
We also have consumers who are driving cars and SUVs who've come in looking for Ranger. I think it will be fun to watch the first three months to see who those consumers actually are, who purchases them and what the trade-ins are. I think there's going to be a wide mix.
How are inventory levels? Is Ford doing a good job balancing incentive levels with inventory?
You're not going to find any automotive dealer that's going to tell you they have enough incentives. We will all take more if they'll let us take more.
I think inventory levels are pretty strong across the country and everybody's pretty well loaded up for the year, and that's normal. You won't find many stores that don't have plenty of inventory going into year's end. That's a good thing for the consumer.
Incentive levels are always a hard discussion. It's all about how fast we're turning the product. No dealer wants inventory just to sit there.
After a year and a half, what do you think of the direction CEO Jim Hackett is moving the company and how has he evolved responding to dealers?
The news coming out of our Las Vegas dealer meeting was strong because everybody was there. We've been blessed as Ford dealers to always have access to the leaders of Ford Motor Co.
Jim realized he could have done a better job of that and he's absolutely responded to hearing that from dealers. He's been to meetings. Jim Farley and Joe Hinrichs do a great job also getting out among dealers. I think we're headed in the right direction.
How are declining new-vehicle sales affecting dealership profitability?
It's something we always have to watch. Obviously, if our new-vehicle volumes are sliding, we have to find ways to overcome that whether it's in used vehicles, service operations or parts operations.
I think most dealers are watching that; where can they grow their business. You can only sell the number of new vehicles that consumers are willing to buy. You can't force the market, because consumers do drive it.
We'll look at how 2018 plays out and see how we have to adjust to 2019. Most of it is probably going to go into growing their service business and our parts business, so we can shore up that side of the equation. There's opportunity and openings out there for most of us. We have to explore those options, because you can't always control the new-car side of the equation.
Is vehicle affordability an issue for Ford dealers? What are retailers doing to help mitigate that?
Affordability of our products is all about what the consumer can absorb. As the market overall moves, consumers have a budget of what they can afford, whatever that vehicle may be. We have to have products on the new-vehicle side that a consumer can buy. It's all about what's new and what's coming, and whether those new vehicles fit their price points. Or maybe not a price point, but at least a payment they can afford.
If you're selling them their first vehicle, it has to be affordable in order to keep them in your brand. I think all the manufacturers are feeling that. No one can continue to just raise prices. We have to find avenues to afford them, whether that's lease programs, payment options that fit or low interest rates that have to come from the manufacturer. We're all going to have to continue to explore ways to put consumers in products. But I believe what Ford has coming in the future over the next 18 to 24 months will help us.
How are rising interest rates affecting vehicle sales at Ford dealerships? What is Ford Credit doing to help it?
On the dealership side, the floorplan part of the equation is big. For the vast majority of Ford dealers, as interest rates rise of course our floorplan rises. The launch of our new floorplan assistance program that came from Ford will help offset some of that cost in 2019, no doubt. They're providing more assistance starting in January and that will be helpful.
On the consumer side, we have 0 percent deals all over the place and dealers are marketing that. Ford Credit always has programs that are out there for consumers that have lower rates. What we have to watch — nobody can control the Fed — but as the [interest rate] continues to go up, we just have to work with Ford and Ford Credit to make sure we have options for the consumers, no matter what the banks or credit unions decide on what to do with their rates. We have to make sure we have programs so consumers can buy our products.
Ford has announced a global restructuring and plans to cut salaried workers. How does that resonate with its dealers?
I think from the consumer standpoint, it's news in markets where Ford has plants and operations. Nationwide, I'm not sure it has an impact from a consumer standpoint. Ford's not going anywhere.
On the dealer side, those are business decisions they have to make internally, just like we do. You want to run an organization that is as lean as it can be and is still growing.
How effective has Ford been explaining its plans for the future in terms of mobility and autonomous vehicles and what role dealers will play?
That's a tough one, because I think we're all trying to understand our positions. Ford's trying to share where we're going and I think it's hard for some people to see, me included, about what this whole market will look like moving forward.
But they're addressing the topic and making sure we know that we're not going anywhere as a dealer network. They're doing a great job letting us know we're going to be part of the equation and part of the solution to help consumers. But if anyone's got this thing completely figured out right now, they sure are being quiet. But we're going to get there together.
