Dealers Demand $75m in Compensation From Ford for Leaving Indonesia
Jakarta. Six businessmen who own a total of 31 Ford outlets have threatened to file a lawsuit to demand Rp 1.1 trillion ($75 million) in compensation from Ford Motor Indonesia, Ford Motor Company and Ford International Service, after suffering heavy losses as a result of the United States-based automotive giant's unilateral decision to withdraw from Indonesia.
The demand for compensation involves losses related to land procurement, buildings, stocks and future business of the dealers, all which would be rendered useless, the dealers claim, should Ford leave the country on July 1 as planned.
Under their existing contracts that have yet to be amended, dealers are obliged to take care of aftersales service of Ford cars, but they cannot import or sell any new vehicles.
"This is like forcing us to undergo a slow painful death," said Andee Yoestong, one of the businessmen who opened his latest of 11 dealerships last December, a month before Ford's surprise announcement.
"Ford announced that it will close its operation and dealerships in Indonesia on Jan. 25 without any consultation with the dealers," the dealers' lawyer, Harry Ponto, said during a press conference on Monday (27/06). "The company has yet to stop the contracts, putting the dealers in limbo."
This was the second threat of a lawsuit by dealers after their first on June 1 went unanswered, according to Harry.
"We will wait until Idul Fitri [...] If there is still no response, we will file a lawsuit," he said.
Kenny Kusuma, who owns a dealership in Bali, said Ford's arbitrary handling of the matter has given foreign investors a bad name.
"We have trusted them and invested billions of rupiah to support Ford's distribution and aftersales service in Indonesia. But now they leave Indonesia without consulting us first. This is harmful behavior against Indonesian entrepreneurs," Kenny said.
The Jakarta Globe approached Ford for comment on the issue, but the company has yet to respond.
Ford, one of Detroit's "big three" automakers, entered the Indonesian market in 2002, in the footsteps of General Motors, which amid intense competition from Japanese rivals, decided last year to stop its manufacturing operation in Indonesia — with the loss of 500 jobs.
The automaker announced in January, that it sees "no reasonable path to profitability" after it had less than 1 percent market share in Indonesia.
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