Dealers

As the public face of Ford within our communities, our dealers are key employers and contributors to local economies. Market conditions, however, have forced us to confront an overcapacity within our dealer network, and we have begun downsizing in our largest 130 metropolitan market areas. Our intention is to provide targeted average-year sales for Ford dealers at 1,500-plus units and Lincoln Mercury dealers at 600-plus units. (For more on our dealer restructuring, please see the Economy section of this report.)

Although we have downsized in North America, we are working to expand our network of dealers in markets where we have growth opportunities. In China, for example, we opened our 200th full-service dealership in May 2008. That's double the number of dealerships we had at the end of 2005. The Ford dealer network in South America has been strengthened in recent years with an exciting product lineup, a stronger brand and growing local industry.

Dealer satisfaction is measured in various ways, including the biannual survey of the National Automobile Dealers Association (NADA), as well as day-to-day interaction with our dealers. Progress is also evaluated through numerous meetings with our National Dealer Councils and Dealer Advisory Boards. Approximately 45 percent of dealers provided feedback through the summer 2008 NADA survey process, which showed notable improvement in the areas of people and policy. In fact, the scores in these categories were at record highs for Ford Motor Company.

Dealer Diversity

Ford continues to lead other automakers in its percentage of minority-owned dealerships – with 255, or 6.2 percent of our 4,106 U.S. dealerships.1 Ford supports its Leadership Education for Automotive Dealerships (LEAD) certificate training program at Arizona State University and has graduated its second group of students from Historically Black Colleges and Universities and Hispanic-Serving Institutions. LEAD is designed to provide students with exposure to career opportunities in the auto industry and the key leadership and entrepreneurial skills necessary to enter high-level positions within the industry. Over the past year, Ford has sponsored more than 25 minority business associates in automotive retail training programs.

Due to economic conditions, Ford will be restructuring the use of its Dealer Development Investment Program in 2009. In prior years, the program provided funding for qualified candidates who dedicated themselves to a career in automotive retailing. Dealer Development (DD) has implemented a program designed to reduce the number of DD dealerships from 64 by assisting qualified operators to become private capital owners. All partial-equity DD operators can buy out their dealerships for $1 and execution of a general release. Ford will give up ownership interest and forgive capital loans. This offer will expire on September 30, 2009.