Ohio judge says Ford must pay dealers $2B

yahoo/ap ^ | 6/11/11 | Joanne Viviano

[EBH]

Ford Motor Co. must pay nearly $2 billion in damages to thousands of dealerships in a 2002 class-action lawsuit that said the automaker violated dealer agreements, an Ohio judge ruled Friday.

Cuyahoga County Common Pleas Judge Peter Corrigan in Cleveland issued the ruling based on a Feb. 11 jury determination that the company overcharged dealers for commercial trucks over an 11-year period.

The $2 billion award covers more than 3,000 dealerships and about 474,000 trucks. It includes a judgment of about $781 million and about $1.2 billion in interest.

"In awarding the dealers the amount of money they overpaid for trucks, the jury verdict places ... the dealers in the financial position contemplated by the terms of the contract," said James Lowe, a Cleveland attorney for Westgate Ford Truck Sales Inc., a dealership in Youngstown that represents the class.

Ford's annual report, filed on Feb. 28, says the class action included all dealers who purchased a 600?series or higher truck from Ford from 1987 to 1997. It says the lawsuit accused the automaker of failing to reveal that price concessions were given to some dealers.

Ford said in a Friday statement that the company will appeal.

[meyer]

Cuyahoga County judge Corrigan? My bet is that he’s a liberal hack. Ford should appeal.

[editor-surveyor]

>> “Excuse me, Ford has a right to negotiate any way it pleases with each individual dealership.” <<

.
No, they do not. They have a contractual arrangement, and must abide by it.

[editor-surveyor]

The current “GM” cannot be a victim of the UAW, since they are a division of the UAW.

[editor-surveyor]

>> “They paid the negotiated price and want the same T&C’s as other dealers who may have sold more vehicles and would naturally be given a price concession that other dealers didn’t get.” <<

.
You have zero understanding of franchise business.

[meyer]

This has nothing to do with Obama.

More than likely, it may have something to do with the closing of 1 or more Ford facilities that are within the boundaries of Cuyahoga County (Cleveland area). Last time I drove by the Brookpark engine plant, the parking lot was completely empty. That's a huge facility. That was last year, but it may well remain empty. Ol' Corrigan might be seeking revenge for Ford leaving his town.

[Vendome]

You know, I am actually getting pretty tired of people telling me I don’t know anything.

I have owned everything from a Quickstop to my latest company REO management services.

Since we make a lot of money and have for more than 30 years and are pretty much debt free I’ll take my experience over the word of everyone else, until I am proven wrong.

There is a standard contract price and there is a negotiated price.

You get what you negotiate for and if you don’t understand that then it’s not surprising you don’t see my point of view.

So tell me, oh smarter than me, what do you do for work?

[Vendome]

Apparently Ford also doesn’t understand the franchise business.

Why aren’t you advising them?

You could make a killing telling everyone they don’t anything.

[Vendome]

Apparently Ford also doesn’t understand the franchise business.

Why aren’t you advising them?

You could make a killing telling everyone they don’t know anything.

Why, knowledge like that is invaluable. Particularly for its vacuous and broadly unspecific nature.

It’s just the kind of useful information I look for that can really protect my business while putting it on the right path to accelerate growth.

Thanks again for your detailed warning.

[gitmo]

Price-fixing laws require a supplier to make comparable offers to all its equivalent customers. For instance, a company that sells C cell batteries would have to make comparable offers to drug stores, another set of comparable offers to electronics stores, etc.

You have to be able to demonstrate you dealt evenly with these customers.

[Jack Black]

Oh, you mean stuff like the 1970 'Cuda 340 which sold for under $4,000 when new and now goes at auction for a cool $50,000+ in excellent condition? Here's a nice yellow one for sale for that price.

Or the many run of the '69 Cameros that go for $40K or more, all those SS and SS/RS models?

Or maybe we should pick on Ford, whose original GT40 won LeMans four times in a row, from 1966 to 1969. It was pricy in the day but now goes for $100,000.

Here's two for sale at Hemmings.

[editor-surveyor]

Glad that you have so much better handle on this than the judge; you’ll be saving Ford a bundle.

[Vendome]

Hell you are the expert on knowing nothing.

[Vendome]

BTW, I stayed at a Holiday Inn Express several times.

So, yes, I am an expert! /S

[Kellis91789]

You don’t think those dealers lost a few sales because they couldn’t afford to lower the price enough for the customer to bite ? Or the dealer made the sale, but couldn’t get as big a profit margin as the other dealers got ? Customers don’t just hand over whatever amount a dealer asks for, so a dealer can’t just “pass that price plus their profit on to the consumer” as you put it. Customers do walk away, you know.

[PLMerite]

My first car was a 1969 Camaro.

I meant stuff like the Citation, and the emasculated drones with musclecar names.

[dools0007world]

I’m r post.

My point was that, as far as I know, there is no blanket car company contract with car company dealers by neighborhood, city, region or state. Each dealer, whether he owns one show room or multiple show rooms, negotiates the best deal he can with the manufacturer. Volume is one component that might garner one dealer an advantage over another even if their showrooms are within spitting distance of each other.

I think your post supports that point of view?

As I understand it, the suit against Ford is based on the company selling trucks to one dealer for less than others. It isn’t about Ford breaking a contract(s). In the spirit of the Marxist’s concept of “fairness” I can see why they would glom on to this standard industry practice as being unfair. Also, they are trying to protect their car companies—Chrysler and GM—so they’re trying to make Ford vehicles more expensive to sell.

If I’m wrong about any of this feel free to correct me. Please be specific.

[Vendome]

You are correct.

You get what you negotiate for.

[fish hawk]

I’ve been in construction all my life and when the material and lumber houses raise their prices, the contractors raise their prices to the customer. Never had a customer tell me that because plywood went up $20 a sheet they decided not to build their house now. Anyone set on buying a ford 150 and goes shopping for a ford 150 is going to buy the ford 150.

[Kellis91789]

The $20 per sheet increase in plywood in a new home represents less than 1% of the total home price to the customer. Somebody building a home has already committed — by purchasing land, buying plans, prepping the site, etc. — and their planning included an overage allowance for contingencies.

You can’t really compare that situation to somebody buying an F150 where they have the option to buy from many dealers, some of which can pass along a price break they got, or even buy a GMC. These are businesses buying this class of truck, and price always matters.

[fish hawk]

I just used that example for a quickie. I can make other examples but I wont waste the time. Just about everything in the retail market when adjustments come, is passed on to the consumer, big or small, makes no difference. To deny that is living out of reality.