Mercury may be on last legs

[PaulGo]

Mercury may be on last legs

 

While industry insiders have speculated for years that Mercury might be on its way out, Ford CEO Alan 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

 

http://www.freep.com/article/20100528/BUSINESS01/5280475/1322/Mercury-may-be-on-last-legs

[sullied]

Intelligent business move, in my opinion.

[mgbabe]

We haven't had the Mercury brand here in Canada for years. I think we are surviving without badge engineered Fords.

[sparbanie]

I agree sullied it would be a very wise business decision. I think Ford should focus more on their brand cause i have seen major improvements since owning 2000 ford focus

[Rodeo]

I mean, what's the difference anyway. Mercury for years is nothing more then a rebadged Ford with minor changes to the grill area and tail lights. It's no big deal as I see it. After all, it's basically the same exact car or SUV except at a $500 increase in list price. Let them invest in Lincoln.

[akirby]

Mercury is still alive. This was a deliberate leak by Ford to gauge public reaction to the idea. Nothing has been decided yet.

[Rodeo]

Mercury is still alive. This was a deliberate leak by Ford to gauge public reaction to the idea. Nothing has been decided yet.

 

If so, it may just back-fire on FOMOCO because rumors like this may well turn potential buyers away from Mercury (to Ford or even other brands) knowing or rather thinking that the car they considered buying could soon be a relic. Nobody wants to own one of those.

[sullied]

If so, it may just back-fire on FOMOCO because rumors like this may well turn potential buyers away from Mercury (to Ford or even other brands) knowing or rather thinking that the car they considered buying could soon be a relic. Nobody wants to own one of those.

Maybe that's their actual plan. There's no reason to have the same exact vehicles with just slight modifications and charge more money for them. Lincoln is there as the luxury brand...no need for a slightly more luxurious car.

[akirby]

If so, it may just back-fire on FOMOCO because rumors like this may well turn potential buyers away from Mercury (to Ford or even other brands)

 

Yeah, because Ford's management is so stupid they didn't think about that. Whatever they did, they had a good reason and they know exactly what they're doing.

[Rodeo]

Yeah, because Ford's management is so stupid they didn't think about that. Whatever they did, they had a good reason and they know exactly what they're doing.

Oh, there's no doubt that they thought of ever possibly ramification to this and are quite ready for the fall out. I am betting this is "for real" and Mercury is dead within 5 years if not sooner.

That's good for me as when I get to buy out this current car from my Company, the book value will be less because of this. Mercury could have al least had different color options then their Ford cousins, but no. Today, nothing sets the Mercury apart from the Ford except a few hundred dollar premium.

[Grey]

The consolidation of dealerships taking place over the past 2 years, tells me it is close to happening. Many stand alone L/M points have already been absorbed by the facing Ford dealership. That makes the cancellation exposure much less.

 

It will be interesting to see which vehicles are selected for the Lincoln offering. 2011 starts the wind-down with the elimination of the Mountaineer.

[Grey]

Did I say close? This afternoon, it is expected to be announced.

[akirby]

Did I say close? This afternoon, it is expected to be announced.

 

Giddy on up, giddy on out..........

 

http://media.ford.com/article_display.cfm?article_id=32749

 

Mercury gone by the end of the year.

[PaulGo]

Ford to End Production of Its Mercury Line

By MICHELINE MAYNARD

Published: June 2, 2010

 

 

DETROIT — The Ford Motor Company said Wednesday that it would stop production of Mercury vehicles in the fourth quarter and discontinue the brand.

 

The announcement confirmed long-time speculation that the Mercury brand was ending, joining other aged models like Plymouth and Pontiac in the automotive graveyard.

 

Ford said it does not anticipate a significant expense to close showrooms since it has no stand-alone Mercury dealers. Mercury models are sold through 1,700 dealers, with most selling Lincoln or Ford models as well.

 

Through May, Ford said Mercury’s market share was only 0.8 percentage points, while the Ford division has gained 2.2 percentage points of market share in 2010 alone. Over all, Ford has about 17 percent of the American car market. “We decided that we’re going to focus our efforts and our resources on continuing to grow the Ford brand and to accelerate Lincoln,” said Mark Fields, Ford’s president for its Americas region.

 

As recently as Tuesday, Ford’s chief executive, Alan R. Mulally, said he had nothing new to report about Mercury, whose demise has been rumored for years.

 

Begun as a midpriced alternative to basic Ford and luxury Lincoln models, Mercury most recently has been a repository for versions of models also sold by the Ford brand.

 

Its lineup includes the midsized Milan, similar to the Fusion, the Mariner sport-utility, sold alongside the Escape, and its full-sized Grand Marquis, which has been in Ford’s lineup in some fashion since the 1970s. The Milan overtook the Grand Marquis as the best selling model this year.

 

Mercury was introduced 71 years ago when Ford was striving to keep pace with General Motors, which had passed Ford during the Depression to become the country’s top-selling automaker.

 

In the late 1950s, Ford introduced a variety of innovations on the Mercury Turnpike Cruiser, like a power rear window, the “seat-o-matic” adjusting seat and the “Merc-o-matic” automatic transmission.

 

Mercury sales peaked at 580,000 in 1978, which also marked record hourly employment for the Detroit auto companies. But in 2009, Ford sold fewer than 93,000 Mercury models.

 

Mercury is the latest venerable Detroit brand to disappear this decade. In 2009, General Motors said it would eliminate Saab, Saturn, Hummer and Pontiac as it streamlined in the wake of its bankruptcy filing. Chrysler dropped the Plymouth brand in 2001, while the Chrysler brand is considered by some analysts to now be in doubt.

 

http://www.nytimes.com/2010/06/03/business/03mercury.html?hp

[ford fan]

I wonder what the trade in value will be when you go to trade in an orphan car.

[Grey]

Most buyers know that Ford powertrain parts will service Mercury vehicles and that Ford will provide service parts as long as there is sufficient demand. So, there will be some hesitation to buy a used Mercury, but not so much that the market will drop out from under the vehicles.

 

There will be great discounts on the balance out vehicles - that will take some of the sting out of buying the remaining inventory.

 

Plus Ford will likely give current owners an extra incentive on a new Ford or Lincoln purchase when it is time to trade them in.

 

BTW, I suspect that Ford will hold some of the new technologies/features/options for the Lincoln branded vehicles and then pass them through to Ford vehicles after a year or two. They have to justify the $10k price bump between the Ford and the Lincoln varient somehow.

[Miata_Mark]

Could this mean Edsel might be making a come-back?

[Rodeo]

Well I for one will benefit from this. My buyout price from my Company leased Milan will be that much less in another 3 years. Giddy up!!

[roblax13]

So it's just going to be the Ford and Lincoln brand. No more Mazda, Volvo, Jag, or Mercury under the Ford flag.

 

I like it. Ford is really trying to make their company lean (six sigma). Guess they are trying to be like the Jap companies and Apple. Fewer brands, fewer models and higher quality products. I never really understood why companies (like GM) get so out of control with so many different brands and models. Just make a few really well made products that you improve a little bit every year. I hope they open more new state of the art plants in Michigan. They really need them over there. Lets stop making defective parts in Mexico! Instead, make high quality parts right here in the US of A. People will buy them even with a higher price tag.

[BigRedNole]

Ford is making the right move. Instead of being so broad and cover 100% of all segments, design fewer vehicles that spread into 95% of segments. Why develop two products that compete against each other?

 

Sub Compact: Fiesta

Compact: Focus

Mid Size: Fusion

Full Size: Taurus (including luxury)

Sport: Mustang

Work: F150/250/350

Small SUV: Escape

Large SUV: Explorer

Luxury: Lincoln models

[akirby]

Why develop two products that compete against each other?

 

Up until now they needed the volume to keep the Mercury and Lincoln/Mercury dealers in business and they didn't have the resources to invest much in Lincoln. Now they've gotten rid of the stand alone Mercury dealers and consolidated most of the Lincoln/Mercury dealers with Ford dealers (only 276 L/M dealers left) so now it's possible.

 

Remember the Lincoln Mark LT pickup? That was done to give the L/M dealers something to sell after they cancelled several L/M models with no replacements.

[Rodeo]

So it's just going to be the Ford and Lincoln brand. No more Mazda, Volvo, Jag, or Mercury under the Ford flag.

 

I like it. Ford is really trying to make their company lean (six sigma). Guess they are trying to be like the Jap companies and Apple. Fewer brands, fewer models and higher quality products. I never really understood why companies (like GM) get so out of control with so many different brands and models. Just make a few really well made products that you improve a little bit every year. I hope they open more new state of the art plants in Michigan. They really need them over there. Lets stop making defective parts in Mexico! I nstead, make high quality parts right here in the US of A. People will buy them even with a higher price tag.

Are you kidding? They may well expand in Mexico, not cut back. Too many regulations in Michigan and the USA for that matter. More will be coming from Mexico, not less. Just enough to claim they are still an American Company will be built here.

 

Funny thing as my closest L/M dealership just expanded by building a brand new service center on adjacent property they purchased. The A-Holes didnt have the sense to connect the driveways to the dealership though and the service center needs to be accessed by a totally different route and highway even though they are literally side by side. Had to be a zoning problem to cause that as no one could be that stupid. (Stupid zoning idiots then!)

Edited June 3, 2010 by Rodeo

[roblax13]

Are you kidding? They may well expand in Mexico, not cut back. Too many regulations in Michigan and the USA for that matter. More will be coming from Mexico, not less. Just enough to claim they are still an American Company will be built here.

 

Funny thing as my closest L/M dealership just expanded by building a brand new service center on adjacent property they purchased. The A-Holes didnt have the sense to connect the driveways to the dealership though and the service center needs to be accessed by a totally different route and highway even though they are literally side by side. Had to be a zoning problem to cause that as no one could be that stupid. (Stupid zoning idiots then!)

 

Dammit...let me dream Rodeo!

 

The reality is you are right. Although, I think the bigger problem in the US is the unions. I'm not anti-union, but the amount that the Big 3 spend on Union benefits and wages is astonishing. And union workers are less productive because they are so insulated (believe me I know, I work with union workers). They just need to train those Mexicans better. They really F'ed up on the first batch of 2010 Fusions, including mine!

[Grey]

In-plant complexity is a hugh cost to Ford. By eliminating and consolidating lines, massive cost savings can be achieved around the globe. Standardization of parts and multiple world wide suppliers translates to lower cost, higher quality and supply protection. Every regime since Henry the 1st, said they were going to do it, but Mulally is getting it done. He may be a better study than the Edsel in future business text books.

 

Don't you wish you had the guts to buy Ford stock at $1.70 a share? I wish I had!

[Waldo]

They just need to train those Mexicans better. They really F'ed up on the first batch of 2010 Fusions, including mine!

 

Sorry, but that's just ignorance. Hermosillo is by far Ford's highest quality North American plant and the Mexican workers could teach the American/Canadian workers a thing or two about quality. In fact the former plant manager was recently promoted to a higher position within North American manufacturing quality.

 

Your transmission issues are caused by the software that was designed and written by Americans.