Ford Cutting Vendors

Ford Motor Co.’s divisions are nearing completion of an internal review and consolidation of their below-the-line marketing vendors, requested by Ford earlier this year as part of its Ford 2000 global cost-cutting initiative.
Collectively, Ford spends hundred of millions of dollars a year on such efforts.
“Everybody wants to get into Ford’s pocketbook,” said an agency source. “By consolidating, they’re going to be much better able to control costs because they can negotiate more tightly with a smaller group.”
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 on the project.
Several hundred specialty agencies or vendors currently work on marketing initiatives for each of the divisions (Ford, Lincoln-Mercury, Ford corporate, Mazda and Jaguar). Each division will narrow its individual list to between six and 12 shops before the end of the year, sources said.
Among the largest agencies affected are Wunderman Cato Johnson, whose Irvine, Calif., and Chicago offices handle promotional work for Lincoln-Mercury; Alcone Marketing Group in Irvine, which does Mazda promotions; and Carlson Marketing Group in Minneapolis, which handles a variety of below-the-line marketing programs for Ford divisions, including direct and sales materials, according to sources.
Besides cost savings, the consolidation is also intended to limit the number of vendors who are responsible for interacting with the consumer while maintaining the division’s brand identity, a source 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,” he said. The assessment, he said, affects activities “anywhere where we use vendors to help us.”
Mitsubishi Motor Sales of America, Cypress, Calif., will get a report from Los Angeles consultancy Select Resources International next month detailing findings from its internal review of below-the-line vendors.
–with Michael McCarthy