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Ford preparing to wind down Mercury, Bloomberg reports

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Ford preparing to wind down Mercury, Bloomberg reports

Automotive News -- May 27, 2010 - 3:09 pm ET

DETROIT (Bloomberg) -- Ford Motor Co. is preparing to wind down the Mercury line, created in 1939 by Edsel Ford, after sales plunged 74 percent since 2000, said two people familiar with the plan.

The automaker's top executives are preparing a proposal to kill Mercury to be presented to directors in July, said the people, who asked not to be indentified revealing internal discussions. Mercury, losing two of four models next year, will be starved of products and promotion, the people said.

CEO Alan Mulally emphasized the automaker's namesake brand as he revived the only major U.S. automaker to avoid bankruptcy. The timing of Mercury's demise depends on how fast executives can persuade the brand's dealers, who also sell Lincoln models, to close or merge with Ford showrooms, they said.

"Mercury is a forgotten brand," said John Wolkonowicz, an auto analyst with IHS Global Insight. "Many Americans probably already think it has been discontinued. Mercury was too similar to Ford from the very beginning."

Mulally also is unloading Ford's European luxury brands, after the automaker failed to achieve a goal to have them generate one-third of automotive profits. Ford in March agreed to sell Volvo to China's Zhejiang Geely Holding Co. It sold off Jaguar, Land Rover and Aston Martin in the last three years.

Mercury would join Pontiac, Saturn, Oldsmobile and Plymouth among the departed Detroit brands of the 21st century. Sales will end within four years, one of the people estimated. General Motors Co., as part of its U.S.-backed reorganization last year, sold or closed four of its eight brands sold domestically.

Plans "have not changed"

“Our plans regarding Mercury have not changed,” said Mark Truby, a Ford spokesman. “Like any good business, we constantly assess our business portfolio. If things change, we will let you know.”

Edsel Ford, son of founder Henry Ford, established Mercury during the Great Depression as a mid-priced alternative to mainstream Ford and upscale Lincoln. Edsel's great grand-daughter, Elena Ford, now the automaker's director of global marketing, initially opposed discontinuing Mercury, which she was in charge of promoting prior to 2002, the people said.

Doing away with Mercury is supported by Ford Executive Chairman Bill Ford and other members of the founding family, who have 40 percent voting control of the automaker through a special class of stock, the people said. With Mercury accounting for 1.9 percent of Ford's global sales in the first quarter, the family has decided ending it is best for the business, the people said.

“Edsel Ford is revered in the family, and Mercury was his creation,” said Wolkonowicz, a former Ford product planner. “This is the end of an era.”

Bill and Elena Ford also declined to comment, Truby said.

1978 peak

Mercury's sales peaked in 1978 at 579,498, when it had the slogan “The Sign of the Cat.” Deliveries fell 84 percent to 92,299 last year. As the U.S. auto market recovers, Mercury's sales are up 23 percent this year through April, less than Ford Motor's overall gain of 33 percent. Mercury had 0.9 percent of the U.S. market through April, unchanged from 2009.

Mulally, since arriving from Boeing Co. in September 2006, put a priority on improving quality and expanding the offerings of the Ford brand to lessen its dependence on pickups and SUVs. He ended three years of losses at the automaker by earning $2.7 billion last year and has said 2010 will be “solidly profitable.”

As Mulally focused on the namesake brand, Mercury withered, the people said. Ford's ad spending on Mercury fell 88 percent from 2005 through 2009, according to researcher Kantar Media of New York. Last year, Ford stopped selling the Mercury Sable, a sibling to the Taurus. The Mountaineer, Mercury's version of the Explorer, is to go away next year as Ford rolls out a new version of the SUV.

Since Mulally's arrival, Ford stopped giving Mercury exclusive features and technology, the people said. That made Mercury less distinctive than comparable Fords, which tend to be priced lower.

“The reason Mercury failed throughout its existence is because Ford never wanted to spend any money on it,” Wolkonowicz said. “Ford always wanted to do it on the cheap and the results were what you'd expect.”

Milan #1

Mercury's top-selling model is the Milan, a sibling of the Ford Fusion, with sales up 53 percent this year. Mercury also sells its own version of the Ford Escape SUV, known as the Mariner, which has had a 22 percent sales gain through April. Ford is scheduled to replace those models in 2012 and 2013 and could drop the Mercury versions, Wolkonowicz said.

Mercury's second best-selling model, the Grand Marquis, is being retired next year as Ford stops producing a trio of large, rear-wheel drive sedans that also includes the Lincoln Town Car and Ford Crown Victoria. Mulally has emphasized more fuel- efficient models, such as the Fiesta and Focus small cars Ford is introducing this year in the United States. Neither has a Mercury counterpart.

“The Grand Marquis has the oldest buyer demographics in the industry with an average age of 70,” Wolkonowicz said. “There are still members of the Depression generation who will miss Mercury.”

Mercury's cultural heyday came in the 1950s, when hot-rodders favored its engines, which were larger and faster than those found in Ford models, Wolkonowicz said. Along with Lincoln, Mercury sponsored “The Ed Sullivan Show” on CBS in the 1950s and 1960s. Detective Steve McGarrett drove a black Grand Marquis in the “Hawaii Five-0” TV series on CBS in the 1970s.

As Mercury's sales plunged, so too have its profits, Wolkonowicz said. With one-quarter of the sales it had a decade ago, it's hard to rationalize the line's continued existence, he said.

“I'm not surprised to see Mercury go because they don't sell enough of them,” Wolkonowicz said. “It's been a case of benign neglect for years.”

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100527/OEM/100529851/1255#ixzz0pA1hQD00

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BREAKING: FORD CONSIDERS END OF MERCURY BRAND

By Mark Kleis

After suggesting that Ford would keep the often forgotten Mercury on several occasions, inside sources have now suggested that Ford is looking to wind down its low volume brand in the near future, according to a report by Bloomberg.

According to two sources familiar with the situation, Ford’s top executives are preparing to deliver a proposal to the board of directors in July that will suggest the wind down of its Mercury brand. No details have been given regarding the wind down process of Ford’s forgotten brand, but Bloomberg suggests that the timeline for the wind down will likely depend on how Ford can find a way to convert its Mercury franchises to either Lincoln or Ford dealers – or terminate them completely.

Although the demise of Mercury has been discussed for years, the probability of this suggestion is likely more relevant than ever as Mercury is set to lose two models next year as the Mountaineer and Grand Marquis go out of production.

link:

http://www.leftlanenews.com/breaking-ford-considers-end-of-mercury-brand.html

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I figured this was inevitable when they didn't come out w/ a Mercury version of the Edge, Flex and most recently the new Taurus...

Sad to see the brand go, Mercury was one of my late father's favorite car marques...from a '58 Monterey to 3 '67-68 Cougars to the '70s Marquis, he drove Mercs for about 20 years before switching to Lincolns for his last 20+ years... I grew up around 'em.

But with the Taurus overlapping the MKS in price, and the same w/ the CUVs, there really doesn't seem to be room to have a brand between Ford and Lincoln w/ the way these brands are positioned currently.

I still want an '03-04 Marauder sooner or later.

Edited by Cubical-aka-Moltar

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Drew Dowdell    5,169

Strange for 2 reasons:

1. The euro is currently favorable for bringing over the Euro Fords but badging them as Mercuries

2. What do they plan to do with all of the Lincoln dealers?

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Strange for 2 reasons:

1. The euro is currently favorable for bringing over the Euro Fords but badging them as Mercuries

Ya...but that would require investment and commitment to maintaining and growing the brand. Sounds like the commitment isn't there.

I assume any Euro Fords they plan to bring over will be badged as Fords here...have Transit and Fiesta, Focus is coming..next Fusion will be paired w/ the Mondeo, and the next Escape will be paired w/ the Kuga, I think? I can't imagine other European models coming given Americans aversion to hatchbacks and small MPVs...

2. What do they plan to do with all of the Lincoln dealers?

Sell Lincolns. I think Lincoln outsells Mercury, doesn't it? And some have merged w/ Ford dealers.

Edited by Cubical-aka-Moltar

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Report: Ford To Shut Down Mercury Brand?

By Bengt Halvorson

Deputy Editor

May 27th, 2010

Mercury brand might be heading for the chopping block.

Bloomberg, citing unnamed sources within the company, says that Ford Motor Co. is planning to shut down its Mercury brand.

It's clearly no done deal yet; the plan, which hasn't been set into motion yet, is going to be presented in proposal form to company directors in July.

But Mercury has hardly been successful in recent years—sales have dropped 74 percent since 2000, and are at a small fraction of its 579,000 sales peak in 1978, again according to Bloomberg—and now it might be completely forgotten by all but those who pay close attention to cars and the industry, going to way of other shuttered domestic brands like Plymouth, Saturn, Oldsmobile, and Pontiac. Currently, the brand only accounts for about 1.9 percent of the company's global sales, and the massive overhead of keeping a brand running likely means there's not much money being made on the Mercury.

Over the years, Ford has vacillated about what, exactly, should be Mercury's focus. It's cycled from a different-flavored, vaguely glitzy step-up brand from Ford prior to the 1970s, to a sporty Euro-fighter in the late 1980s, to a seller of barely different (and, some thought, cosmetically inferior) versions of Ford-brand vehicles in the '90s. In recent years, Ford seemed to be setting a more distinct tone for Mercury with materials and trims, but even that wasn't enough, apparently, to stoke sales. There had even been very recent rumblings about making Mercury Ford's tech-focused brand, giving it first dibs for special apps for the company's Sync system, for instance.

All the while, Mercury's product portfolio was starved. There are only four vehicles in the lineup, and two of them are slated to be discontinued. The 2012 Mercury Tracer, which was to be based on the Ford Focus and expected to be previewed at the New York auto show this April, didn't show up there and set off some speculation about whether Ford might be realigning Mercury yet again.

Mercury has, however, even in times of a short product supply, been a great deal for those looking for strong value—because of the far superior service afforded by Lincoln Mercury dealerships, as gauged over the years by customer satisfaction results from J.D. Power and others. The 2010 Mercury Milan, for instance, remains a very compelling bargain, at about the same price as its nearly identical 2010 Ford Fusion counterpart.

link:

http://www.thecarconnection.com/marty-blog/1045578_report-ford-to-shut-down-mercury-brand

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smk4565    356

They are better off without them. Mercury doesn't add any value, it is just a distraction to make the same car twice and spend all that extra on marketing. I suspect many Lincoln dealers will merge in with Ford dealerships, and that will take care of the problem of having too many dealers as well.

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Ford's Mulally won't confirm report it plans to kill Mercury

David Shepardson / Detroit News Washington Bureau

Washington -- Ford Motor Co. is still evaluating the fate of its Mercury brand, declining to confirm a report today that it plans to shutter the 71-year-old brand.

Ford President and CEO Alan Mulally told reporters in Washington this afternoon that he wouldn't confirm a report from Bloomberg News that the Dearborn automaker will wind down Mercury, whose sales have plummeted since 2000.

"We haven't changed our position on (Mercury). As you know, we continue to evaluate all of our models and all of brands, but we have nothing new to announce today," Mulally said.

"We have no change in our position about Lincoln or Ford or Mercury."

Asked if any announcement was imminent on Mercury's fate, Mulally said only he had nothing new to announce.

Bloomberg said Ford plans to present a proposal to the company's board in July to kill the brand.

Mulally met with the Michigan congressional delegation this afternoon -- the latest in a string of meetings that Detroit's Big Three CEOs have had with Michigan lawmakers.

His visit comes just one day after the House Energy and Commerce Committee passed a sweeping reform of the nation's auto safety laws. Mulally said he and the delegation discussed the auto safety legislation and financial reform legislation now pending before Congress.

On May 13, Chrysler Group CEO Sergio Marchionne met with Michigan members of Congress -- his second visit since December.

Last month, General Motors Co. chairman and CEO Edward Whitacre Jr. made his first trip to Washington as head of the Detroit automaker.

link:

http://detnews.com/article/20100527/AUTO01/5270463/1148/auto01/Ford-s-Mulally-won-t-confirm-report-it-plans-to-kill-Mercury

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Report: Ford Planning to Kill Mercury Division, Maybe as Soon as Year's End

Thursday, May 27, 2010 | 2 Comments » Categories | Ford, Mercury, Reports |

Mercury, the maker of higher grade Ford models with waterfall grilles such as the Milan and Grande Marquis, will have the same fate of GM's Pontiac and Saturn brands, according to a report from Bloomberg citing two unnamed people familiar with the plan.

The news agency said that Ford Motor Co executives could ask the automaker's board of directors as early as July to green-lit the (eventual) axing of the Mercury brand.

Ford did not give a straight out answer when asked about the report. "Our plans regarding Mercury have not changed," said Ford spokesman, Mark Truby. "Like any good business, we constantly assess our business portfolio. If things change, we will let you know." Bill and Elena Ford declined to comment, Truby said.

People familiar with matter said that Ford Executive Chairman Bill Ford and other members of the founding family, who have an all-important 40 percent voting control of the automaker, clearly support the elimination of Mercury.

The Mercury brand was created in 1939 by Edsel Ford as a Buick-like, entry-level luxury marque slotted between mainstream Fords and premium Lincolns.

The brand's sales peaked in 1978 at 579,498 units, but have since plunged to just 92,299 vehicles last year. In the first quarter of 2010, Mercury's sales accounted for a mere 1.9% of FoMoCo's global sales.

link:

http://carscoop.blogspot.com/2010/05/report-ford-planning-to-kill-mercury.html

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Ford considers fate of Mercury brand

BY DEE-ANN DURBIN

ASSOCIATED PRESS

Mercury could soon be the latest Detroit car brand to disappear.

Ford Motor Co. is assessing the future of Mercury, although a final decision on whether to kill the brand hasn’t yet been made, a person familiar with the company’s deliberations said today. The person asked not to be named because the process is ongoing.

During a trip to Washington to meet with lawmakers, Ford CEO Alan Mulally declined to discuss Mercury, saying the company has nothing new to announce. He added that Ford is continually reviewing all its brands.

Several Lincoln-Mercury dealers contacted this evening said they hadn’t heard that Mercury could be discontinued. The news was first reported by Bloomberg News, citing unnamed sources.

The fate of the 72-year-old Mercury brand has long been in question. The brand, conceived as a mid-range brand between the no-frills Ford brand and the luxury Lincoln brand, saw its peak sales in 1978 at more than 580,000 vehicles but has been in decline ever since. Ford sold 92,000 Mercurys last year.

“It’s a brand that has really lost its relevance to the American consumer,” said James Bell, an executive market analyst with Kelley Blue Book.

Bell said that since Mulally took over Ford’s restructuring in 2006, Mercury seemed to be the one undecided issue, getting little attention even as the company remade the Ford and Lincoln brands and shed noncore brands such as Volvo, Jaguar and Land Rover. Mercury never got a twin of the hot-selling Ford Edge crossover or the Ford Focus compact car, for example.

“It’s the one thing at Ford that hasn’t been decided cleanly and done the right way,” Bell said. “It seemed to be this little void that was sitting off in the corner.”

Currently, Mercury’s top-selling model is the Mercury Milan sedan, a twin of the Ford Fusion. But while Ford sold more than 75,000 Fusions and Fusion hybrids through April of this year, it sold just 11,800 Milans and Milan hybrids.

Mercury does have one point in its favor: It consistently outsells the Lincoln brand. Mercury sold nearly 10,000 more vehicles than Lincoln last year, even though its sales fell 23% from the year before. Edmunds.com suggested today that even if it does cancel Mercury, Ford probably wouldn’t lose many customers, since nearly half of Mercury shoppers also consider the Ford brand.

If Ford does kill Mercury, it would only be the latest in a string of casualties as Detroit carmakers try to cut costs and invest more heavily in fewer offerings. General Motors Co. recently shed the Saab, Saturn, Pontiac and Hummer brands. Chrysler Group LLC dumped its Plymouth brand in 2001 after a sales decline similar to Mercury’s.

link:

http://www.freep.com/article/20100527/BUSINESS01/100527058/1210/Ford-considers-fate-of-Mercury

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Drew Dowdell    5,169
Currently, Mercury’s top-selling model is the Mercury Milan sedan, a twin of the Ford Fusion. But while Ford sold more than 75,000 Fusions and Fusion hybrids through April of this year, it sold just 11,800 Milans and Milan hybrids.

See, I would read this a different way.

nearly 48,000 people decided against a Ford Fusion but instead bought the Milan.

It costs Ford almost nothing in the grand scheme of things to keep Mercury alive.

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See, I would read this a different way.

nearly 48,000 people decided against a Ford Fusion but instead bought the Milan.

It costs Ford almost nothing in the grand scheme of things to keep Mercury alive.

I used to agree with your arguement. However, additional badging, colors, equipment, etc. are more costly. It takes a whole seperate team to keep up the rouge that the cars are different. That costs money too. Then you have the ads. Yep, it costs them money. Could all of that budget and equipment go into a smartly marketed Ford "Mercury" trim level. Yep. Ford has plenty of higher priced vehicles than the Milan to show that the brand can command higher prices. It adds credability to Ford and increases its focus.

Your statement that "it costs Ford almost nothing" worked very well when the market was controled by domestic brands. Generally there were fewer brands and at that volume you could support another marketing channel. In fact, you could support a host of niche cars. Hence why you had six coupes at Chevy during the same age Chevelle, Malibu, Corvair, Corvette, Camaro, and Impala. Then on top of it all, you could get three to four engine choices. Thanks to a sundry of brands we now have pre-packaged brand/vehcile line setup at all automakers. Very few actually offer substantive options unless you move to the luxury brands. Take the Malibu as an example 4-cyl or V-6, 6-colors, and three trim lines. Not a lot of options.

Arguably, if the domestic brands were of higher quality in the 70s and the fuel consumption not caught them off guard we'd be talking about the home team still.

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Intrepidation    848

I used to agree with your arguement. However, additional badging, colors, equipment, etc. are more costly. It takes a whole seperate team to keep up the rouge that the cars are different. That costs money too. Then you have the ads. Yep, it costs them money. Could all of that budget and equipment go into a smartly marketed Ford "Mercury" trim level. Yep. Ford has plenty of higher priced vehicles than the Milan to show that the brand can command higher prices. It adds credability to Ford and increases its focus.

Don't forget that just changing the fascias requires all new rounds of crash testing.

Sad to see Mercury go. We have one, it's a great car. However there's really no place for Mercury right now unless Lincoln were to move properly upmarket to compete with BMW, Lexus, and the Like, then Mercury could go after the people Buick and Acura go after. That requires lots of money and commitment though, and I doubt it'll happen. Besides, Ford and Lincoln combined could do that job anyway.

I do quite like the Marauder, it's also the last Mercury I've been interested in.

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CSpec    515

See, I would read this a different way.

nearly 48,000 people decided against a Ford Fusion but instead bought the Milan.

It costs Ford almost nothing in the grand scheme of things to keep Mercury alive.

I think much of the same logic that brought Opels in as Saturns can be applied to Mercury, but I think it would also fail for the same reasons. Lutz was wrong when he thought everyone would forget their perceptions of the brand when they saw the product. Mercury is too damaged and Ford doesn't have the time or the money to turn it around properly.

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FAPTurbo    1,096

Mercury is too damaged and Ford doesn't have the time or the money to turn it around properly.

I didn't think Mercury was 'damaged.' I just thought people forgot about its existence, kind of like Suzuki. I don't think there's any negative perception like there was for Saturn.

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regfootball    252

i am fine with this. ford can be even more focused (no pun). Lincoln can gain a greater awarenewss too (if they survive).

if all the people hadn't bought all the japanese cars we could still have mercury, plymouth, PONTIAC, saturn, oldsmobile........

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Ford may kill off Mercury

Mercury is on the bubble -- again.

In a reversal from just a few months ago, Ford Motor Co. is preparing to kill its mildly up-market Mercury brand so it can more intensely focus scarce investment dollars on its Blue Oval and Lincoln luxury marques. The move, if approved, also would enable Ford to winnow its dealer network, a politically fraught exercise company executives would be forced to manage.

The Dearborn automaker says its plans for Mercury "haven't changed. Like any good business, we are constantly assessing our portfolio," Ford said in a statement. "If things change, we'll let you know."

But they already have changed, if not officially. Earlier this year, Ford told the National Automobile Dealers Association that it planned to introduce in 2012 a compact car based on the Ford Focus, and the car was expected to be shown last month at the New York Auto Show. The car was pulled from the event.

Ford is aggressively touting its all-new Explorer, a radical makeover of the iconic SUV that revived Ford in the early '90s and set the stage for a blistering run through the decade. There is no new Mercury Mountaineer, a mate to the Explorer.

The Sable sedan died with the rebirth of the Ford Taurus. The Grand Marquis, the quintessential Mercury luxo-boat, is poised to be euthanized, leaving only the Milan midsize and the Mariner compact SUV as surviving products in a lineup that accounts for an increasingly small share of the vehicles sold by Ford overall and through its Lincoln-Mercury sales channel.

And Mercury has long been a target of CEO Alan Mulally, whose deliberate campaign to simplify Ford's operations and focus resources on fewer brands under his "One Ford" plan never really envisioned a future for Mercury.

In Washington on Thursday to meet members of Michigan's congressional delegation, Mulally said "we continue to evaluate all of our models and all of our brands, but we have nothing new to announce today."

Still, the signs are mounting that Mercury is terminal, the victim of a methodical rationalization that already has broomed Aston Martin, Jaguar, Land Rover and Volvo from Ford's portfolio. The end of Mercury, founded in 1939 by scion Edsel Ford, would stand as Mulally finally getting his way -- whatever the sales figures.

Through April this year, Mercury outsold Lincoln 32,552 vehicles to 29,689. In 2009, the four-vehicle Mercury lineup outsold the six-vehicle Lincoln range, underscoring a principle argument that has kept Mercury alive, despite plunging sales over the past decade: Kill the brand and some Lincoln-Mercury dealers likely won't survive.

"That would not be good news," said Brad Black, general manager of Downtown Ford Lincoln-Mercury in Canton, Ohio. "It's going to put some Lincoln-Mercury dealers in a hurt. I just came back from a meeting in Detroit three or four weeks ago and Lincoln-Mercury didn't get mentioned, not once."

Added Chris Lemley, owner of several Lincoln-Mercury dealerships in the Boston area: "If it's true, they've been lying to us for the past two years. Anything you can say about Mercury, you can say about Lincoln."

Meaning the rap about Mercurys being nothing more than tarted-up Fords can be just as easily leveled at Lincoln, whose rejuvenated lineup generally is considered to be struggling to meet expectations. That's why the death of Mercury, if approved by Ford's directors, is certain to be questioned.

Without Mercury production volumes, less capacity would be used in Ford plants, driving up fixed costs. Without Mercury sales volumes, some stand-alone Lincoln-Mercury dealers would be certain to struggle, forcing some to combine with nearby Ford stores and close up shop altogether. Without Mercury, Ford would lose nearly a point of U.S. market share.

"Shutting down Mercury eliminates a distraction," said Jeremy Anwyl, CEO of Edmunds.com. "Mercury is a brand that has lost its meaning in the American automotive marketplace and it isn't worth trying to change that."

But Mercury has been effective since its 2005 makeover in attracting women buyers who otherwise wouldn't consider the Ford-brand vehicles underpinning Mercury. The difference, though, is that the public posture of today's Ford and its Blue Oval vehicles is sharply different than just a few years ago.

Ford's lineup is fresh, winning rave reviews and is expected to rank among the freshest in the industry over the next few years, according to an influential report issued by Merrill Lynch. Ford's making money again. It avoided bankruptcy; it isn't bound by the strictures of being on the federal dole; it didn't take the PR hit that comes with injections of taxpayer money.

And Ford's revival under Mulally is answering whether Detroit can muster the mettle to compete. It can, as much as it can make the gutsy calls that are sure to draw fierce reaction from dealers and customers opposed to the decision.

Now's as good a time as any for Ford to finally choose whether Mercury lives or dies so the parent can get to the business of growing again. A truth of Detroit's unraveling over the past 18 months is that the elimination of ancillary brands -- Saturn and Saab, Hummer and Pontiac -- can be a lot less traumatic to the core business than originally feared.

Mercury needs a verdict. Stringing along dealers with unfulfilled promises and declining production and offering customers winnowing choices isn't an effective recipe for winning new business. Which is what today's Ford is all about.

From The Detroit News: http://detnews.com/article/20100528/OPINION03/5280385/1148/AUTO01/Ford-may-kill-off-Mercury#ixzz0pEF10q1V

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Ford considers scrapping Mercury

Decision expected in coming months

BY SARAH A. WEBSTER

FREE PRESS AUTOMOTIVE EDITOR

After years of speculation it might be killed, Ford's 71-year-old Mercury brand finally appears headed for the automotive graveyard.

The Dearborn automaker is intensely reviewing its premium brand, which has been suffering from a lack of new products, a person familiar with the discussions said Thursday. The company's board is expected to make a decision on the brand in the months ahead.

Mercury had been expected to get a compact car, the Tracer, which had some believing the brand would live, but those plans are now in limbo, a person familiar with the discussions said.

In Washington, Ford CEO Alan Mulally said: "As you know, we continue to evaluate all of our models ... But we have nothing new to announce today."

Rumors that Mercury might be laid to rest would not be a surprise. Many middle-of-the-road brands, such as Pontiac and Plymouth, have died.

Sales of Mercury, which is sandwiched between the mainstream Ford and upscale Lincoln brands, are down by more than 70% since 2000.

And Mercury has a dry product pipeline, which has suggested to dealers that the brand might be on its way out.

Aside from the Milan midsize sedan and Mariner SUV, Mercury hasn't had many strong sellers in recent years.

Execs said to be preparing proposal on ending brand to send to board in July

While industry insiders have speculated for years that Mercury might be on its way out, Mulally -- who has been leading the company on a triumphant turnaround -- might stand the best chance of convincing dealers and the Ford family that now is the right time to kill it.

The Mercury brand, created by Edsel Ford in 1939, was recently championed by Elena Ford, Edsel's great-granddaughter and the director of Ford's global marketing, who helped bring new products to the brand earlier this decade.

In 2004, she helped unveil the Mercury Montego sedan, a vehicle that is no longer sold, and like most Mercury models, was a revamped version of a Ford product -- in this case, the old Ford Five Hundred.

On Thursday, Bloomberg News first reported that Ford's top executives are preparing a proposal to kill Mercury to be presented to directors in July.

Mercury would be hard-pressed to survive in its current state unless Ford were prepared to invest in fresh product for the brand.

Last year, consumers bought just more than 92,000 Mercury cars and trucks -- mostly the Milan midsize car and Mariner SUV.

That sales volume is barely enough to support an entire brand, experts say. By comparison, Ford sold twice as many Ford Fusion midsize cars as the entire Mercury brand sold.

"Mercury is a forgotten brand," John Wolkonowicz, an auto analyst with IHS Global Insight in Lexington, Mass., told Bloomberg. "Many Americans probably already think it has been discontinued."

Meanwhile, no plans for a new Mercury Mountaineer SUV, based on the Explorer platform, have been revealed, even though a new Explorer is to come to market late this year. Production of the Grand Marquis large car is also expected to cease when the St. Thomas Assembly Plant in Ontario closes next year.

Plans for a Mercury Tracer compact car, which had some dealers believing that Mercury might live on, also are in limbo.

Despite its lackluster performance, some dealers still might resist a plan to close Mercury, however. That could cost Ford if it is forced to buy dealers out of their Mercury franchises.

Ford no longer has stand-alone Mercury franchises, but it does have 292 Lincoln Mercury dealers who did not have a Ford-brand franchise at the end of 2009. That's down from 357 Lincoln Mercury dealerships at the end of 2008.

But Ford still needs to help those dealers stay viable and Lincoln -- despite a barrage of fresh products -- hasn't been performing as well as some experts had hoped.

Lincoln sales were down 22.8% last year, which is slightly more than the U.S. market decline of 21.2% last year.

If Ford nixes Mercury, however, it might have more funds to put into restoring the Lincoln brand.

Since arriving at Ford in 2006, Mulally has largely been focused on reviving the global Ford brand.

link:

http://www.freep.com/apps/pbcs.dll/article?AID=/20100528/BUSINESS0102/5280354/1331/BUSINESS01/Ford-may-scrap-Mercury&template=fullarticle

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Drew Dowdell    5,169

I didn't think Mercury was 'damaged.' I just thought people forgot about its existence, kind of like Suzuki. I don't think there's any negative perception like there was for Saturn.

I agree. I don't think Mercury is damage, they are just something that no one gets excited about.

But as an example of how Ford treats Mercury. I months ago specifically asked for a Mercury Milan Hybrid or Mariner Hybrid and was told that they aren't in the press fleet.

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GMTruckGuy74    228

Well where I live in southern New Jersey almost all of the Ford dealerships have combined Mercury/Lincoln already. The most local Ford dealership has just completed a building renovation (second one in the last 3-4 years) to reflect all three brands on one site. Of course the building signage has the Ford blue oval centered, with the Lincoln logo to the right and the Mercury logo to the left. They'll have to spend money to fix this if Mercury goes away (like they just didn;t spend enough on the dealer redo!).

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Well where I live in southern New Jersey almost all of the Ford dealerships have combined Mercury/Lincoln already. The most local Ford dealership has just completed a building renovation (second one in the last 3-4 years) to reflect all three brands on one site. Of course the building signage has the Ford blue oval centered, with the Lincoln logo to the right and the Mercury logo to the left. They'll have to spend money to fix this if Mercury goes away (like they just didn;t spend enough on the dealer redo!).

Last year, the Ford dealer 1/2 mile from home (on a major 'dealership row' street) merged w/ the L-M dealer down the street and moved onto their lot. The Ford dealer (which was large and had been there a long time) was razed and a new Toyota dealer has been built in it's place (the Toyota dealer recently unveiled a huge US flag on the tallest flagpole in the Phx metro area...

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GMTruckGuy74    228

What a coincidence, because Holman Ford in Mount Laurel (Rt 73) merged their Ford dealership on their L/M lot in Maple Shade (Rt 38), about 2-3 miles away, and turned the Ford dealership (very large building & lot) into a Toyota dealership too! Next door to this former Ford dealership was my Saturn dealership, which this fall transforms in the area's first all-Mini dealership.

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Ford: 'Nothing to add' on reports of Mercury's demise

Alisa Priddle / The Detroit News

Ford Motor Co., in a conference call with investors today, shed no new light on its reported plans to wind down its Mercury division.

"We have nothing new to add today," Chief Executive Alan Mulally said when asked about reports the automaker will kill its mildly up-market brand to focus on the core Ford brand and the more upscale Lincoln marque.

"We continue to look at our portfolio of brands and nameplates," Mulally said.

The Mercury brand has seen its stable of vehicles dwindle, but many Mercury-Lincoln dealers have relied on both brands to achieve the sales volumes they need to be profitable.

Mulally said Ford is continuing to work with its dealers to rightsize them so each outlet has better throughput.

"We still have a little ways to go, especially in metropolitan areas," he said, adding as a whole the initiatives have shown great progress.

On the conference call, Mulally repeatedly stressed the automaker's overall strategy of applying "laser focus" on the Ford brand now that the automaker has shed the Jaguar, Land Rover and Aston Martin luxury brands, is completing the sale of Volvo and has reduced the equity stake in Mazda Motor Corp.

He said the moves have "been a real liberator for this transformation" of the automaker.

The goal is to continue the efforts of the last three years to ensure Ford offers a complete lineup of products for every region of the world.

Vehicles will be derived from large global families for more efficient development because they are less complex, there are fewer variations, more common parts and the scale is there to reduce cost.

link:

From The Detroit News: http://detnews.com/article/20100528/AUTO01/5280413/1148/auto01/Ford---Nothing-to-add--on-reports-of-Mercury-s-demise#ixzz0pFWke3rV

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