Ford to end dealer cash bonuses

DETROIT, Dec. 17 (UPI) -- Ford Motor Co. has scrapped plans to cut bonuses to dealers participating in its Blue Oval Certified customer satisfaction program but will end cash bonuses in 2005, a company official said.

Ford created a near mutiny last month when it announced it was slashing the program's performance incentives by 60 percent. Hundreds of angry dealers grabbed telephones or bombarded executives with e-mail messages warning the decision would kill the 2 1/2-year-old program that handed out about $700 million a year.

Ford relented and said it would continue to pay qualified dealers about $250 for each vehicle sold but the cash bonuses will officially end in March 2005 when a new customer satisfaction program with non-monetary awards is scheduled to begin.

Blue Oval Certified "has helped Ford make significant improvements in customer satisfaction and dealers have been rewarded for doing so," said a statement released by Ford division President Steve Lyons.

The Detroit News said most Ford dealers opposed Blue Oval when the program began in April 2000 but that about 94 percent of the company's 3,700 dealers eventually signed up.

By any measure the program was a success, with customer satisfaction with dealers improving 26 percent in sales and 23 percent in service.

In other automotive news, General Motors' chief market researcher said the world's largest automaker has an image problem. Paul Ballew told the Detroit News despite steady quality improvements in recent years, GM had not shaken its image of building low-quality products.

GM has led the industry in using rebates and no-interest buyer incentives to stimulate sales, forcing Ford and Chrysler to come up with similar deals.

But Ballew said GM is paying for the "sins of the past" despite a recent J.D. Power and Associates survey showing GM vehicles trailing only Toyota and Honda in quality.