Ford May Slash Dealer Bonuses in Cost-Cutting Move: Source

Ford Motor Co. (F) plans to cut dealer bonuses by nearly 50 percent in a cost-cutting move that will take effect next year, a source familiar with the issue said Tuesday.

"Ford is revising Blue Oval and cutting bonuses by nearly half," said the source, on condition of anonymity. "It is no longer financially feasible for Ford to continue the bonus payout at current levels."

Under the new Blue Oval dealer incentive program (search), effective next April, bonuses will be paid to all Ford dealers meeting monthly sales targets.

But Ford dealerships meeting 75 percent of their year-ago sales will receive only $75 per vehicle, while those that exceed year-ago sales will receive $125 per vehicle, the source said.

Under the current, more generous program, Ford pays certified dealerships a flat 1.25 percent of the base sticker price for every vehicle they sell. Dealers have to meet certain customer service standards set by the automaker to be certified. About 90 percent of Ford's dealers in the United States are Blue Oval certified.

Ford is planning to brief all dealers on changes in its bonus program Friday.