Ford Set To Cut Vendors




Direct, Promotions Shops Face Consolidation
DETROIT–Ford Motor Co.’s divisions are nearing completion of an internal review and consolidation of their below-the-line marketing vendors, requested earlier this year by the automaker as part of its Ford 2000 global cost-cutting initiative.
Collectively, Ford spends hundred of millions of dollars a year on such efforts. “By consolidating, they’re going to be much better able to control costs because they can negotiate more tightly with a smaller group,” said an agency source.
The consolidation covers such areas as point-of-sale, direct mail, promotions, training, auto shows, incentive budgets, customer communications and dealer communications. Brand and product advertising for Ford and its divisions–business that adds up to approximately $1 billion annually–is unaffected by the consolidation, as is ethnic and minority marketing work, sources said. Interactive marketing is also not believed to be a target of consolidation.
Ford officials could not be reached for comment.
Several hundred specialty agencies or vendors work on marketing initiatives for all of Ford’s divisions (Ford, Lincoln-Mercury, Ford corporate, Mazda and Jaguar). Each division will narrow its own list to between six and 12 shops before the end of the year, sources said.
Richard Beattie, president and chief executive of Mazda North American Operations, said the company is “in the middle of reviewing all of our submarketing supplier relationships.”
Separately, Mitsubishi Motor Sales of America, Cypress, Calif., expects a report from Los Angeles consultancy Select Resources International next month detailing findings from its own internal review of below-the-line vendors. –with Michael McCarthy