DETROIT — After two failed attempts elsewhere, Ford Motor Co. said Monday that it has reached agreements to consolidate some of its dealerships in San Diego and Tulsa, Okla., and replace them with auto superstores and satellite service centers.
Ford acquired four Lincoln-Mercury dealerships in San Diego over the last year and a half and has since closed three of those. It recently brought in a new executive owner to operate the fourth and largest, Lincoln-Mercury of Mission Valley.
In Tulsa, the company is creating a partnership with dealers to own and operate the area's six Ford and two Lincoln-Mercury dealerships. Some of the existing facilities will be closed and replaced with two or three superstores, supported by several satellite service centers.
The moves are part of a broader effort by Ford to upgrade its retailing operations in the face of competition from publicly owned dealer chains and superstore operators, such as Republic Industries.
"Republic is the catalyst," said an auto retailing consultant who works closely with Ford and other auto makers. "Ford is being preemptive."
Ford hopes to trim its dealer ranks, cut distribution costs and adopt new consumer-friendly sales techniques, such as fixed-price selling and salaried sales agents. It also wants to build off-site service centers to provide routine maintenance closer to customers' homes and offices.
The tentative agreements in California and Oklahoma come just weeks after Ford failed in larger efforts to restructure its retail networks in Indianapolis and Salt Lake City. Dealer resistance killed those proposals.
Ford is exploring similar plans in other medium-sized markets, which it would not identify. Industry sources, however, confirmed that Ford is working closely with Bert Boeckmann, owner of Galpin Ford in North Hills, on a plan to consolidate dealerships in the San Fernando Valley.
Industry sources said Ford's Lincoln-Mercury division has struggled with poor sales for several years and that most of the dealerships were unprofitable. The company began quietly buying out dealers last year.
The San Diego initiative involves four dealerships in the city of San Diego and in the southern part of San Diego County. The three dealerships acquired and closed by Ford were in National City, El Cajon and the Miramar area of San Diego. Two other dealerships in northern San Diego County are not part of the proposal.
Once Ford gained control of the San Diego franchises, it recruited Ed Witt, a dealer in Milwaukee, to run the consolidated operation. It has not been determined how many superstores and service centers will be built or where.
"This is all about delivering the product to the consumer quicker and at a better value," said Witt, who has an agreement to acquire the franchise.
In Tulsa, Ford will create a partnership to own and operate the consolidated dealerships. Dealers can either accept an ownership interest or take a cash buyout. Local dealer Don Thornton is expected to head the group.
It is expected that more than half the existing dealerships in Tulsa will be closed. They will be replaced with superstores that sell full lines of Ford and Lincoln-Mercury models and with several satellite repair centers.