Ford Motor Co. has cut about 20 percent of its metropolitan Lincoln dealerships in the past six months as it seeks to revive its luxury line and boost sales at the remaining stores, said a person familiar with the situation.

The automaker now has about 400 Lincoln dealers in the nation’s top 130 metropolitan markets, said the person, who asked not to be identified revealing internal data. Ford told Lincoln dealers in October that it planned to eliminate 175 of its 500 metro Lincoln outlets, reported Bloomberg.

“Our vision is to substantially reduce the number of dealers to become competitive,” Mark Fields, Ford’s president of the Americas, said Oct. 5 after meeting with Lincoln dealers in Dearborn, Michigan, where Ford is based. “We need to make sure our dealers are competitive in their throughput so they can provide the experience our customers expect.”

Ford executives are meeting today and tomorrow in Dearborn with the 12-member Lincoln dealer council to review plans for upgrading customer service and redesigning models to reverse declining sales, the person said. Lincoln sales have fallen 11 percent this year, while the overall U.S. auto market has gained 20 percent, according to Autodata Corp.

Lincoln sales have plunged almost two-thirds from their 1990 peak and averaged 1.4 cars sold a week for each dealer in the first quarter, according to Autodata, based in Woodcliff Lake, New Jersey. Lincoln, which was last the top-selling luxury brand in the U.S. in 1999, sold 36 percent as many models as Daimler AG’s Mercedes-Benz in the U.S. in the first quarter.

“With Lincoln, we’re clearly in a transition period,” Ford Chief Executive Officer Alan Mulally told reporters April 13 after a speech in Detroit. “Our commitment to the dealers now is that we’re going to make a fantastic family of vehicles that will be very competitive. We’re all going through some transition as it takes time to get these vehicles to market.”

Ford has said it plans to introduce seven new or significantly redesigned Lincoln models, including a small car, by 2014. The automaker has overhauled Lincoln’s design theme to outfit vehicles with prominent, split-bow grilles and is dedicating design, engineering and marketing staff to the brand, rather than having it share with Ford.

Ford had planned to unveil a new look for Lincoln in a concept car at the New York auto show this week. The automaker delayed that introduction indefinitely after hiring Cadillac stylist Max Wolff in December as Lincoln’s new chief designer, people familiar with the plans have said.

Ford hasn’t revealed a timeline for when it expects to reach its goal of about 325 Metro Lincoln dealers. Ford also has about 700 Lincoln dealers in rural areas, which aren’t targeted for closing.

Ford had reduced its metro Lincoln dealer count to 434 by February, Ken Czubay, vice president of U.S. sales, said at the time. The cuts are aimed at discouraging Lincoln dealers from competing against each other on price so they can take on the luxury brands of other automakers.

Since October, Ford has been meeting with Lincoln store owners to lay out new expectations, including upgraded customer service and renovated showrooms, at a cost of as much as $2 million per store, dealers have said.

Ford is offering to buy out Lincoln dealers or pair them with Ford franchises, where sales have risen 25 percent this year.

Beginning Aug. 31, Lincoln dealers have to meet new standards for staffing, training and begin providing owners with perks such as car washes. Ford is seeking to upgrade the buying experience to emulate Bayerische Motoren Werke AG, Toyota Motor Corp’s Lexus and Mercedes-Benz. Lincoln dealers who fail to meet the new standards may not receive as much financial support from Ford, the person said.

Mulally is seeking younger buyers and a bigger slice of the more-profitable premium-car market with models such as the MKZ gasoline-electric hybrid sedan and touch-screen technology to operate phone, stereo, navigation and climate controls.

Since arriving from Boeing Co. in 2006, Mulally has sold Jaguar, Land Rover, Aston Martin and Volvo to focus solely on Lincoln for the automaker’s luxury strategy.

“The whole plan was that we divest ourselves of the other premium brands,” Mulally said. “We had all these other luxury brands and we didn’t invest as much in Lincoln.”

Ford Motor Co., after increasing its share of the U.S. light-vehicle market for the last two years, is falling short of its retail goal this year, which may put pressure on the automaker to offer larger discounts.

Ford in the first quarter had 13.6 percent of the U.S. retail auto market, which excludes sales to fleet buyers, according to researcher Edmunds.com. That trailed the 14.1 percent target Ford’s board set for executives to match or exceed this year, according to the Dearborn, Michigan-based automaker’s government filings, Bloomberg reported.

Ford’s share slipped as General Motors Co. increased sales incentives 11 percent in the first three months of the year, according to Autodata Corp. of Woodcliff Lake, New Jersey. Ford, which reduced discounts by 9.1 percent in the first quarter, saw its total U.S. market share fall to 16.2 percent from 16.8 percent a year earlier, Autodata said.

“We believe Ford’s management could be forced to become more aggressive with incentives to avoid additional market share loss,” Joseph Amaturo, an analyst with the Buckingham Research Group who rates Ford “neutral,” said in an April 12 research note. “We are increasingly concerned about net-price erosion.”

Chief Executive Officer Alan Mulally, who has emphasized profits over market share, said Ford will maintain pricing discipline.

“The most important thing about our plan is profitable growth, so that leads us to tremendous discipline on everything about the business,” Mulally told reporters April 13 in Detroit. “The number one thing is to match the production capacity to the real demand.”

Ford, which earned $6.56 billion last year, failed to achieve its market share targets globally and in the Americas, according to its proxy statement filed this month. Ford achieved 44 percent of its corporate market-share goal and 58 percent of its target for the Americas, the proxy said.

Ford has said its market share in Europe fell to 7.6 percent last year from 8.9 percent in 2009 as it resisted matching competitors’ discounts. The automaker said its retail market share in the U.S. last year was 14.1 percent, trailing the board’s 14.2 percent target.

Mulally said Ford will continue to avoid the heavy, profit- eroding discounts that U.S. automakers used in the past to keep factories running.

“We will always be very disciplined about our production and our pricing and have the pricing reflect the real demand and inherent value of the product,” he said.

Ford hasn’t met its retail market-share target in any month since October, when it sold 14.5 percent of the cars and trucks purchased by individual consumers, according to automotive researcher R.L. Polk & Co. of Southfield, Michigan. Ford’s retail share fell to 13.2 percent in February, the most recent month Polk has analyzed.

In March, Ford raised incentives and surpassed GM in monthly U.S. sales for the second time in the last 13 years, said Michelle Krebs, a West Bloomfield, Michigan-based analyst for Edmunds.

“GM’s retail share was higher than Ford’s in March, despite Ford beating GM in total,” Krebs said. “Not good if Ford resorts to incentives as well as high fleet percentages again – old habits.”

Ford should continue to put a priority on profits over market share, said Brian Johnson, a Chicago-based analyst for Barclays Capital.

“Anyone would like to improve market share; the question is how do you go about doing that without resting on the easy crutch of incentives,” said Johnson, who rates the shares “overweight/neutral.” “They were well ahead of plan on profit, cash flow, pricing and cost reduction, even if market share was a bit low.”

Ford’s total U.S. market share rose to 16.7 percent last year from 14.4 percent in 2008, according to Autodata, as new models such as the Fusion sedan and Fiesta subcompact attracted buyers. Ford’s share gains in 2009 and 2010 represented the first consecutive annual improvements since 1992 to 1993, the company said.

Ford also gained consideration from car buyers when it avoided the bankruptcies and government bailouts that beset the predecessors of GM and Chrysler Group LLC in 2009.

Ford’s board used market-share targets for 8.33 percent of its formula for determining cash bonus and performance stock grants for top executives. The board’s compensation committee said U.S. retail share is “the best measurement” of consumer acceptance.

Global profits before taxes accounted for 30 percent and automotive operating cash flow accounted for an 30 percent, according to the proxy. Business unit profit before taxes accounted for 15 percent of the formula, while cost performance and quality each represented 8.33 percent.

Ford executives’ performance exceeded every target except market share, according to the filing.

Compensation for Ford’s five top-paid executives rose 64 percent to $75.9 million last year from $46.4 million in 2009, according to the proxy. That included incentive bonus awards paid at 180 percent of the target on the corporate level and 181 percent for the Americas region.

The board’s compensation committee wrote that it “considered our outstanding 2010 performance-to-metrics and our execution of our One Ford Plan as the primary reasons for paying out the award to the full extent that they were earned.”

Ford shares, which climbed 68 percent in 2010, fell 10 cents to $14.71 at 4 p.m. in New York Stock Exchange composite trading. The shares have dropped 12 percent this year.

Mulally’s 2010 compensation rose 48 percent to $26.5 million, including salary, bonus, stock, option awards and other pay. Ford last month also gave Mulally $56.5 million in stock for the turnaround since he joined the automaker from Boeing Co. in 2006. He halted three years of losses and led Ford to $9.28 billion in net income in the last two years.

“I am very pleased that we continue to align the compensation with the business performance of Ford,” Mulally said April 13 when asked about criticism of his pay package by the United Auto Workers union. “This is the way it should be.”

DETROIT – Ford Motor Co. warned the company’s financial outlook could be hurt by the ongoing fallout from the March 11 Japanese earthquake and tsunami.

In a filing late Monday with the Securities and Exchange Commission, Ford said its financial outlook could be affected, reported The Detroit News.

Ford said that “should the supply of a key material or component from Japan be disrupted and an alternate supply not be available, we could have to reduce or temporarily cease production of vehicles, which could adversely affect our and Ford Motor Credit Company’s financial condition and results of operations.”

Ford said earlier this month it had taken into account potential parts shortages related to Japan both as it scheduled previously planned down weeks and as part of regular production planning process to match supply to current demand.

“We now expect that beginning in the last week of April and continuing into May, certain of our operations in the Asia-Pacific region (including certain of our joint venture operations) will be affected by shortages of components and vehicle kits as a result of the events in Japan,” Ford said. “Although this likely will require us and the affected joint venture affiliates to reduce or temporarily cease production of certain vehicles in the Asia-Pacific region, we do not expect this production disruption would have a material impact on our overall results.”

Ford said it is still working to find other sources of parts.

“Although we have no production facilities in Japan, we do obtain materials and components from suppliers located in Japan, and we are working closely with those suppliers to assess their production and shipping capabilities and to minimize any disruptions. We also are pursuing other sources of supply as necessary and practicable,” the company said.

The only immediate impact has been restrictions on ordering vehicles in certain paint colors for which an essential element is sourced from a plant in Japan.

Toyota Motor Corp. told dealers on Sunday that the company is producing cars and trucks at reduced levels in April and hasn’t set its production schedule for May through July. They warned dealers that new vehicle may be in limited supply.

Ford Motor Co. got a welcome rating upgrade to neutral from Credit Suisse, as the automaker works to regain the investment grade status it last held in 2005.

The rating agency had Ford at underperform but upgraded the automaker for being a stronger company than it was a year ago, despite fourth-quarter earnings that did not meet analysts’ expectations, reported The Detroit News.

“Since late April 2010, a number of things have changed,” Credit Suisse analyst Christopher Ceraso write in a report released today.

“Ford has demonstrated earnings power that is substantially greater than was anticipated at the time,” Ceraso said in raising the 12-month price target for the stock to $18 from $17.

Ceraso said Ford’s balance sheet is much stronger than it was a year ago with net debt of about $2 billion, down substantially from $15 billion last April.

Debt reduction is crucial for the company that avoided following General Motors Co. and Chrysler Group LLC into bankruptcy, where those carmakers shed most of their debt. Ford mortgaged everything the company had, including its Blue Oval trademark, to restructure itself and has made cleaning up its balance sheet a priority.

The automaker seeks to get its debt back to investment grade status and start paying dividends again.

Credit Suisse noted that Ford shares had a strong run from July 2010 to January 2011 but then saw some falloff so that the stock has only increased about 11 percent from a year ago. But Ceraso sees that as providing a more reasonable valuation of the company than a year ago.

Disappointing fourth-quarter earnings of $190 million or $0.30 per share injected a healthy dose of skepticism into the stock, Credit Suisse said.

Ford recorded a $6.6 billion profit in 2010.

“However, beneath that caution, we believe investors are ready and willing to re-embrace Ford,” Ceraso said.

A strong first-quarter profit — he estimates $0.55 per share which is above the 48-cent consensus — “could be the catalyst the market is waiting for.”

DETROIT – The legacies of Henry Ford and Thomas Edison are once again intersecting, 115 years after the legendary American innovators struck up what would become a lifelong friendship.

Alan Mulally, president and CEO of the company Ford founded, the Ford Motor Co., is to receive the Edison Achievement Award at a ceremony in New York on Tuesday.

“I’m really excited about the recognition that Alan Mulally is receiving as a 2011 Edison Achievement Awards recipient. The Ford Motor Company has an extraordinary history,” said Sarah Miller Caldicott, Edison’s great-grandniece and chairwoman of the Edison Awards steering committee, reported The Detroit News.

Caldicott said the awards, which honor innovation and date back to 1987, haven’t honored the automaker previously.

Ford, the company, also is nominated for a number of awards at Tuesday’s ceremony — for its MyFord Touch, MyKey, SYNC AppLink and rear inflatable seat belt technologies.

Mulally, who has been Ford’s CEO since 2006, said he will accept the award “on behalf of the skilled and motivated Ford team.”

“The relationship between Henry Ford and Thomas Edison inspired generations to dream of the possible,” he said in a statement. “Through the spirit of innovation and the commitment to continuous improvement, we are delivering on the original and compelling vision of Henry Ford to ‘Open the Highways to All Mankind.’”

Caldicott said it’s particularly fitting to reconnect the Ford and Edison names in this way.

“Henry Ford was really pivotal in ensuring that America remembered Edison as one of the world’s greatest inventors and innovators,” she said, noting the automotive pioneer’s efforts to reconstruct his friend’s Menlo Park, N.J., laboratory in Dearborn, in the 1920s.

To this day, Edison’s reconstructed lab still has a home at The Henry Ford historical attraction in the Detroit suburb.

Ford and Edison met in 1896 at the annual meeting of the Association of Edison Illuminating Companies, which took place in New York. Edison later became a mentor to Ford and encouraged his friend’s work as an inventor and businessman.

The Edison Awards steering committee said it picked Mulally because of “the boldness of vision and leadership he has brought” to Ford and that he’s “widely credited with having led the turnaround in the company’s performance during the worst economic crisis in decades.”

John Hendricks, founder and chairman of Discovery Communications, also will be awarded the Edison Achievement Award on Tuesday. He created the Discovery Channel in 1985. Its stable of companies now encompasses more than 100 networks, representing 27 entertainment brands, including Science Channel, TLC and Animal Planet.

Past recipients of the honor, which is given to leaders who have made significant contributions to “innovation, marketing and human-centered design throughout their careers,” include Martha Stewart and Ted Turner.

DETROIT – Ford Motor Co. paid Chief Executive Alan Mulally more than $26.5 million in salary and stock compensation last year, an amount likely to become a hot-button union issue during labor negotiations later this year.

Mr. Mulally received $1.4 million in salary and $9.45 million in a cash bonus as part of his compensation package, the company said Friday. Executive Chairman William Clay Ford Jr. also received total compensation of $26.5 million, which included a salary of $1.4 million and a cash bonus of $2.7 million, reported The Wall Street Journal.

Ford also disclosed that Americas President Mark Fields received 2010 total compensation of $8.82 million, while Chief Financial Officer Lewis Booth was paid $8.20 million and manufacturing executive vice president John Fleming received $5.92 million.

Ford executives are profiting from the company’s turnaround while compensation for executives at General Motors Co. and Chrysler Group LLC is still limited under the terms of the bailouts they received from the U.S. government. GM Chief Executive Dan Akerson has a compensation package worth $9 million.

Last year was one of Ford’s most profitable years ever. Income for the year totaled $6.6 billion, up from $2.7 billion in 2009. Revenue was $120.9 billion, $17 billion more than in 2009, excluding sales of its former Volvo business.

Both Messrs. Mulally and Ford continued to take a voluntary 30% pay cut in their salaries. The executives initiated the reduction in 2009 amid the recession.

The company also said it spent $167,796 on chartered air transportation for Mr. Mulally since he is barred from flying on commercial aircraft for security reasons. An additional $85,425 was spent on security and $97,271 on housing.

Although Mr. Mulally is credited with returning the auto maker to profitability and steering the company clear of bankruptcy, the payout comes as the United Auto Workers union is preparing for labor negotiations before the current contract expires in September.

Most UAW members are still living with the wage freezes and other concessions that they agreed to in 2009 to ensure Ford maintained its financial footing amid a deep recession which pushed cars sales to record lows.

The compensation figures don’t include the vested stock Messrs. Mulally and Ford have collected since the options haven’t yet been cashed. Last month, Ford disclosed that Mr. Mulally held stock worth $33.4 million at the end of 2010 while Mr. Ford’s holding is valued at $25 million.

UAW President Bob King blasted Mr. Mulally’s pay package when Ford disclosed the CEO’s stock holdings. He called the payout “morally wrong.” Canadian Auto Workers President Ken Lewenza called the stock options “obscene.”