Ford Canada settles dealer class action

Not only were the new competitors in close proximity, but they also had the advantage of the Lincoln franchise, which most Ford-branded outlets did not haveā€¦Ford Canada has about 500 dealers across Canada now, compared with about 580 in 1999 when the decision to restrict Mercury sales to the Cougar sports car and Grand Marquis sedan was first made.

The Globe and Mail
December 17, 2003

Ford Canada settles dealer class action
Both sides satisfied at end to 1999 lawsuit over former Lincoln-Mercury outlets
Greg Keenan

Ford Motor Co. of Canada Ltd. and about 100 of its dealers across the country have settled a long-standing class-action lawsuit that arose when the auto maker switched its Lincoln-Mercury outlets in Canada to Ford dealerships more than four years ago.

Few details were released yesterday pending court approval of the settlement, but company president Alain Batty and Del Bedard, one of the four dealers who launched the suit in 1999, expressed satisfaction yesterday that they had reached a deal.

"The dealers feel we are back in harmony with the Ford Motor Co.," said Mr. Bedard, owner of Thorncrest Ford in Toronto, who has been a key player in the lawsuit that was later expanded to a class action involving about 120 dealers.

He said the 100 dealers still party to the suit will share in a financial settlement as well as an end to non-financial issues that were raised in the suit.

Neither he nor Mr. Batty would reveal further details.

Mr. Batty said the lawsuit had a great deal of visibility with Ford Motor Co. itself and Ford chairman Bill Ford approved of the settlement.

"There is no doubt in my mind that it was a distraction," Mr. Batty said.

"It was no doubt something that was keeping us from reaching our full potential."

Mr. Bedard agreed that the suit and the ill will between the company and its dealers were a distraction.

"We were used to a much more collegial attitude and relationship," he said.

The lawsuit was filed in 1999 after then-president of Ford Canada, Bobbie Gaunt, decided the auto maker should stop selling most of its Mercury products in Canada and focus marketing efforts on the Ford and Lincoln brands, which led to the switch in Lincoln-Mercury dealerships.

The move angered existing Ford Canada dealers, who found themselves competing with new rivals — in some cases next door, and in others less than two kilometres away.

One of the key points the Ford Canada dealers made in their statement of claim was that the sales and service agreement signed by the company and every dealer prevented the construction of a new Ford dealer within 15 kilometres of an existing outlet unless a study determined that such a move was necessary. At the time, Ford Canada identified 26 cases where dealerships were less than two kilometres apart.

Not only were the new competitors in close proximity, but they also had the advantage of the Lincoln franchise, which most Ford-branded outlets did not have.

In Mr. Bedard's case, his Thorncrest Ford outlet in suburban west Toronto was about three kilometres away from a Lincoln-Mercury outlet that converted to Ford-Lincoln and is still in operation, as is Mr. Bedard's.

Mr. Batty said the harmony in the Ford family, as he called it, will be vital in the year ahead as the auto maker begins selling some new car models.

Ford Canada has about 500 dealers across Canada now, compared with about 580 in 1999 when the decision to restrict Mercury sales to the Cougar sports car and Grand Marquis sedan was first made.


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