True Stories From A Former Car Dealer #30: Ford Direct
Jerry Reynolds | August 20, 2018
So, we got beyond the Auto Collection (True Story #27) and dealership relations with Ford were not good. Besides the issues the dealers were facing with their manufacturer, there was also this new thing called the Internet, and dealers were not sure what to do with it. Some embraced it like I did, I had a website in 1995 as I recall, but some dealers were afraid of it.
At the time, the Internet was more informational than an actual way to sell cars. Amazon was making noise about selling cars online, GM was launching its GMBuyPower website, but no company had an actual way to buy a car online from start to finish, including financing.
One of the members of the Ford Dealer Council, who served on the Technology Committee, was from Florida, and he knew his stuff when it came to the Internet. He told me about this idea he had for the Ford Dealers, along with Ford Motor Company, to have a website that actually sold cars. Leo brought to me a very impressive and detailed plan in writing.
I admit, at the time, the idea seemed way out there. I asked if he and the other members of the Technology Committee would pursue it, discuss it, and see how feasible it was. Everyone seemed to think it might work, but it was going to be expensive and the challenges would be many, including different laws in different states. Automakers could not sell cars to the public, period, even if it was done online.
The committee members worked hard to come up with a feasible plan, one we thought Ford would approve as well as invest in. If, and it was a big if, the dealers and Ford could work together on something, it would go a long way in mending the relationship. The one thing we had on our side was the Ford CEO, Jac Nasser, was big into buying dot-com companies – some auto-related – many others that were not.
We formulated our plan and we were set to meet with the executive right under Nasser, a man named Bob Rewey. Bob was the Ford Vice-President of Marketing and most would say he was stoic. I never saw Bob smile much, he was all business and, frankly, feared by many dealers.
The committee and I went to Ford World Headquarters and waited in Mr. Rewey’s very large office for him to arrive. When he walked in, he was visibly angry and had a magazine in his hand. He had just read an article by a man he didn’t know who wrote for a magazine that went to car dealers all over America. Apparently, the writer didn’t have kind things to say about Mr. Rewey.
He slammed the magazine down in front of me and said “you know this guy?” to which I answered no, although that was not altogether true. Towering over me, he said, “why would he write such horrible things about me, I’ve never even met the guy!” Not knowing what to say, I just let the question float out there for what seemed like an eternity.
We finally got down to business, and I can’t really say with certainty that Mr. Rewey grasped the idea, or perhaps he was in a bad mood because of the magazine article. We left him with a copy of the business plan and he said he’d look at it when he had more time. We had proposed that Ford Motor invest 25 million dollars into the venture if we could raise 25 million from the 4200 Ford dealers. The kicker was, we wanted the dealers to have 80% of the voting stock so that we had complete control.
Nothing really happened for a while, I suspect the 25 million dollars gave Mr. Rewey a little heartburn. CEO Jac Nasser had planned a worldwide dealer meeting in Hawaii. There were about 100 dealers there from all over the world. Nothing like this had been done before. We were meeting for 3-4 days, all day long and covered a wide range of topics. Many of the dealers had to have translators with them.
One evening at a cocktail party, Jac Nasser was having a drink by himself, not an uncommon thing to see, and I struck up a conversation with him. It was funny, when he had a suit on, he was stiff and somewhat cold, but when he relaxed he wasn’t such a bad guy.
We chitchatted for a minute and I finally got the nerve to ask if “Mr. Rewey had shared the idea with him about a Ford/Dealer initiative to sell cars on the Internet.” He said no, and asked me to tell him about it.
I gave him the Reader’s Digest version and he was completely into it, I swear he hung on my every word. In a weird twist of fate, about that time, Bob Rewey walked by. Nasser motioned to Mr. Rewey and asked if he knew about this plan. He acknowledged he did and Nasser simply said: “make it happen.”
We were assigned a Ford liaison to assist the Technology Committee in getting the idea off the ground. Ford provided a consulting firm to help us, and also a legal team they had on staff.
Before we could go forward, we had to prove we could raise the required capital from the dealers, and given the dealers’ mistrust of Ford, would not be easy. We put together a presentation and scheduled a satellite broadcast to every dealership in America. We teased it by mail and email, and we asked Ford to have their field staff talk to every dealer about watching the broadcast. All this was to get maximum viewership without giving up any real details, we did not want the automotive press to get wind of the plan.
The big day came and I opened the broadcast, with other Dealer Council members giving specific details. Early feedback was good. At that time, we had the highest viewership of a FordStar broadcast in history. We then went out into the field for meetings with dealers face-to-face in hotel ballrooms across the country. The dealers had a lot of questions, naturally, but most were very positive and willing to invest.
After the broadcast, we polled 1000 dealers. Some were large, some were small, and a lot in between. 95% of them liked the idea and said to proceed.
When the smoke cleared, we raised the money and FordDirect.com was born. Now it was time to share it with the world. We knew General Motors knew about the plan by this time and it was scrambling to come up with a similar plan.
We called a press conference at Ford World Headquarters and drew journalists from literally all over the world. This was a first, it was groundbreaking, and it was covered by every large publication, including the Wall Street Journal, New York Times, Los Angeles Times, and the list went on and on.
If you have the desire to watch all or part of the press event, including seeing the entire Ford Dealer Council and the Ford executives who were involved, you can see it here. I play heavily in the opening portion as well as the Q&A part:
I admit, I still get pretty excited when I watch this video. The entire Dealer Council was on stage, along with Jim O’Connor, the Ford Division President whom I have written about in several of the articles before this one.
The members of the Ford Dealer Council who put so much time into this project truly believed in it. In fact, two of the dealers on the committee left their dealerships to go to work for the venture.
Fast forward to today, the enterprise is still alive and well and has expanded to other services to provide the Ford dealers of America with tools to help them sell more cars online.
Jim O'Conner Jim O’Connor at the Ford Direct press conference in 2000.
Just one other memory of that day I will never forget. Unbeknownst to us, a group of Senators was also in the building that day, investigating the Firestone tire recall (True Story #9). This was big news and Congress wanted to know whom to blame.
After the FordDirect press conference, the Ford Communications Director grabbed me and said some of the press wanted to ask me questions about Firestone, from the Dealer Council perspective.
We walked out a side door onto a sidewalk, and I looked to the right, and about 25 yards away was a huge mass of media people. They literally started running as hard as they could toward me. I looked around, thinking Jac Nasser had walked out, but no, all those people were running to me.
It was like a scene from a movie. Microphones being shoved in my face, boom mikes hanging over my head, cameras and tape recorders rolling.
When I became Dealer Council Chairman, I had to go to Detroit for a full day of media training, the same course all the top executives go through. I thought it was a waste of my time, to be honest. We rehearsed all sorts of scenarios, including how to handle a mob scene of reporters. At this moment, outside Ford World Headquarters, I was thankful for the training.
I held my hands up (like I was taught) and ask for one question at a time and started calling on reporters one at a time. This went on for close to an hour, and I was already exhausted by all the press questions from the earlier news conference.
The Firestone reporters threw all sorts of questions at me, some I knew the answers to, some I did not. In my media training, I was taught that there was one phrase that would work in any situation when you did not know the answer. I am still thankful for these five words…they saved me that day:
“It’s Too Early To Tell.”
Quotes From The Press
Los Angeles Times:
“Prices on FordDirect will vary from region to region depending on local market prices. We wouldn’t expect someone to pay the same price for four-wheel drive in Detroit, where there’s a lot of snow, as in Texas,” said Jerry Reynolds, chairman of the national Ford Dealer Council. “It wouldn’t be fair.”
Approved at a Ford National Dealer Council meeting, Ford Direct was proposed by the dealers to the automaker and worked out at dealer sessions beginning last winter, according to Jerry Reynolds, council chairman and owner of Prestige Ford, Garland, TX.”We called in 56 non-council member dealers for a secret review, and 55 approved the idea,” Mr. Reynolds reports. “This is a dealer-focused response to the third-party sites and one all Ford dealers can benefit from.”
“This is an unprecedented partnership between an automotive dealer body and a manufacturer,” said Jerry Reynolds, chairman of the national Ford Dealer Council, which represents 4,200 Ford dealers across the United States.”No other automaker can claim this level of cooperation with their dealers. We are breaking through the channel conflict that is sometimes caused by the Internet and giving our customers a great new experience,” Reynolds said.
“Consumers have sent a clear message: The Internet has become a major force in buying new cars and trucks and in the ownership experience that follows,” said Jerry Reynolds, chairman of the national Ford Dealer Council. “Now, we have responded.”Jim O’Connor, a Ford Motor Co. vice president and president of the Ford Division, said dealers came to him with the idea earlier this year.”This is a breakthrough,” O’Connor said. “FordDirect is a cooperative effort between us and our dealers, but the real winners are our customers. They can now buy a new car or truck online with confidence and peace of mind, knowing that the entire experience is backed by Ford and our dealer partners.”
“Reynolds was clearly taking aim at General Motors and its site, GM BuyPower. While the name may imply that purchases can be made on the GM site, that is not the case. However, the company did suggest that it would do exactly what Ford just announced.”
Video Credit: Kain Automotive / Photo Editorial Credit: Katherine Welles/Shutterstock
Jerry, You are truly an outstanding man. I have had some experience in dealing with a group of varied persons, each with their own agenda. You were able to get Ford to agree to put up $ 25 Million and yet allow the Dealers to have 80 % control. That is a miracle. I am awed by what you did in your roll as Chairman of the Dealers and standing up to Ford. Your personal integrity comes through and you rose to this role of leadership and you succeeded!
August 26, 2019 @ 11:50am
The Car P.
Jim, thanks so much, you made my day! It was a tough balancing act...if you go too far, Ford would make things hard on your dealership back then. My first obligation was to represent the dealers and get as many "wins" as possible.
Again, I thank you for the kind words, and for listening to the show and taking (and reading) the newsletter.
August 24, 2018 @ 5:50pm
Such a great article on an exciting subject. Thank you for giving us a behind the scenes look at the birth of car buying for Ford Motor Company. I absolutely love all of these stories!