Even with the changes, some dealers were opposed and continued the lawsuits against it. Five dealers in New Jersey brought the original suit to halt Blue Oval, and it was moving forward.
Those five dealers were members of the Ford Dealer Alliance, a now-defunct group of vocal dealers who were constantly challenging Ford Motor Company, turned their anger towards the Ford Dealer Council, and specifically me.
In letters to the editor of Automotive News, they stated:
“Apparently Reynolds has lost sight of what his role should be as a Ford dealer council representative, not to mention his position as chairperson of that organization. A dealer council member represents the interest of the dealers, not Ford Motor Co.”
“Reynolds is obviously confused as to whom he represents. One thing is clear: It is certainly not the Ford dealer body.”
I got hate emails from some of the dealers, but after the changes we made to the program, the tide started to turn and dealers embraced the program and did a better job with customers, and they cleaned up their dealerships, which some badly needed to do.
When I became Dealer Council Chairman a year or so earlier, I started building an email distribution list of dealers. Email was in its infancy, and many of the 5000 plus Ford dealers didn’t have an email address. I got Ford to send each dealer a postcard from me, asking for their email address, and if they didn’t have one, to give me an address for someone who would print off and give them any correspondence I sent. I got a huge response and for the first time, the Ford dealers were getting regular updates from the Ford Dealer Council chairman.
As the second version of the Blue Oval Certified program rolled out, I communicated the changes to the dealers. One stipulation of the program was each dealer had to have a Blue Oval manual that went out to every employee and was signed by each one.
I had a gentleman on my staff who was very good at such things. He did a wonderful job putting our manual together. As I recall, it was about 50 pages of things that had to be done to become certified. Ford had hired an outside company (J.D. Power) to visit every Ford dealer in America to see if they qualified. We jumped onboard early and declared we were ready for our Blue Oval Certification inspection.
The big day came, and the inspectors were at my dealership all day. At about 4 PM, we had our closing meeting and the inspectors declared that we had passed with flying colors.
At that point, I made an announcement over the public address system that went all over the dealership and I said: “Congratulations to you all, we are the very first Blue Oval Certified dealership in America. Thank you for a job very well done!” You could hear the applause all over the dealership. Every employee of mine was invested in making sure we passed, and I felt extreme pressure as Dealer Council Chairman to set an example that this could be done.
The biggest obstacle for the dealers actually turned out to be the manual that was required. Many just didn’t know how to do something like this. I had the manual we used put on the Internet without our name anywhere on it, and sent it to every Ford dealer on my distribution list. All they had to do was fill in the name of their dealership, implement the other requirements, and they were ready for their inspection and certification.
Sending my manual ruffled some feathers at the Ford Motor Company, but I was OK with that. I had pushed the program because it was a financial gain for the dealers, and it was the right thing to do for the customers, to provide a better overall experience.
Many dealers whom I had never met thanked me profusely for communicating with them, and for sending them the employee manual that we had perfected.
OVER 90% OF THE DEALERS QUALIFIED
It was perhaps my proudest moment as Dealer Council Chairman when over 90% of the Ford dealers in America became Blue Oval Certified.
It’s tradition for the outgoing Dealer Council Chairman to make a goodbye speech during a breakfast with all top executives from the CEO on down, as well as the Council members.
In my last speech, I talked about all the challenges we had faced, including the Blue Oval initiative. I closed that rather lengthy speech by saying: “The next time you have an idea that you are afraid to or ashamed to run past the Ford National Dealer Council, that should be a red flag that it’s a bad idea.”
I wish the story had a happier ending. The program that we laid out worked too well. I think Ford always assumed only about half of the dealers would qualify for the extra bonus. Ford was big into things being “cost neutral” a phrase I heard way too many times.
So it seemed like the plan all along was to raise all vehicle prices by 1%, pay the dealers who were certified 1.25% in a bonus, and the dealers who were not certified would pay for the ones who were. I don’t think Ford ever envisioned a 90% approval rate. The actual approval rate reached 94%,
In late 2002, the bad news came. Ford said it could no longer afford to pay the bonuses and was scaling the program back.
The changes were to reduce the payment to 1 percent of invoice in April 2003 (making it an even proposition) to 0.75 percent in April 2004, and to 0.5 percent in April 2005. All payments ended in mid-2006.
Talk about irony-when Ford announced it was cutting back on the dealer incentive portion of Blue Oval, there was a revolt from a huge number of dealers who had been so adamantly against the program. One headline said: “Ford Dealers Extremely Worried About Loss Of Blue Oval Funds”.
Remember the 1% price increase that went to fund the incentive? No, that was never rescinded.