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Is Ford Readying Mercury's Obituary?


‘49 Mercury

‘49 Mercury

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Is Ford finally getting ready to write off its ailing Mercury division?

As regular readers will recall, that’s a question that’s come up more than occasionally in recent years, and it’s become even more of an issue with Kirk Kerkorian on the scene. The billionaire investor – who is now one of Ford Motor Co.’s largest shareholders – has suggested, through his front man, Jerry York, that both Mercury and Lincoln be abandoned.

There’s little question that Mercury is in serious trouble. The division’s sales are minuscule,, reflecting a serious lack of fresh product and an image that can be described, at best, as “fuzzy.” Among younger buyers, you might say, “invisible.”

That’s worrying many Mercury dealers, and not surprisingly. They’ve typically invested millions in their stores and would like to achieve a reasonable rate of return. So what they’re looking for is a reasonable commitment from Ford – a clear plan for the Mercury brand, backed up with a clear timetable for rolling out new products.

Early this year, the Lincoln Mercury National Dealer Council requested a clear outline from Ford. And the automaker originally promised to give it to them in April, dealers tell the Detroit News, though the automaker insists no such meeting was scheduled. Company officials do plan, now, for a meeting with dealers in September.

“The company is in the process of developing a strategy and has committed to communicating this plan to the Lincoln Mercury dealer network,” the retailer group announced in its newsletter.

Over the years, Ford has taken a sort of manic-depressive approach to the Mercury brand. Former CEO Jacques Nasser hailed the last version of the Mercury Cougar as a sign of the hip, youth-oriented models to come. But then, insiders say, the executive decided to kill off the brand by starving it of product. When Nasser was forced out, family scion Bill Ford indicated he would rebuild Mercury, but senior executives have said that they would likely provide only a handful of products to the brand. Three models would hardly sustain a retail network, dealers lamented, though Ford’s new corporate marketing czar, Jim Farley, suggested that a reinvigorated Lincoln brand would keep showrooms humming.

Traditionally, Ford has defended Mercury by insisting it attracted a more affluent buyer who would normally not turn to the Ford Blue Oval. And even though Mercury sales were always modest, compared to its mainstream sibling, the added volume helped keep the company’s assembly plants operating at or near capacity.

But these days, potential buyers don’t want just rebadged Ford products. Even with its chrome brushguards and trim, it’s difficult to disguise the fact that the Mercury Mariner is little more than a gussied-up Ford Escape. Developing significantly different product is costly and resource-intense. If anything, the cash-strapped Ford Motor Co. is hoping to cut product development expenses by consolidating efforts between its North American and European operations.

Last week’s grim announcement by current Ford CEO Alan Mulally only seemed to make Mercury’s fate seem bleaker. The former Boeing executive announced that the current fuel crisis and economic downturn have forced Ford to serious revise its turnaround plans. The automaker is slashing production and speeding up the trans-Atlantic product development merger. The anticipated return to profitability, in 2009, has been postponed – Mulally wouldn’t say till when – and though he said there were no plans for new plant closings, Mulally also refused to rule that option out.

Barring a serious breakthrough in strategy, the options for Mercury seem minimal, at best.
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Comments (4)
  1. I honestly don't understand what has kept Mercury alive for the past 30 years, much less the last few years. Merc really hasn't had a definable brand image since at least the 1960s. Ford has never been willing to break Merc from the "Fords with more chrome" image, even when they were flush with cash. Better to cut them loose now and focus on the Ford and Lincoln rebound.
     
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  2. Good riddance. Mercury was and still is a "Chick brand" even its current ads always feature women who seem to have no interest and no clue what cars are and how they should be driven. The differentiation was more pronounced back in the 80s, when there was a rather masculine Ford T-bird and a rather weird-looking mercury Cougar that, however,m was mechanically and dimensionally identical tothe T-bird.
    That differentiation has all but disappeared today. Like the lates oldsmobile and Plymouth, and the current chopping block candidates, Buick and Pontiac, Mercury has no serious identity, no theme that can attract some class of buyer.
    Good riddance to bad rubbish. It is really stupid to have to spend an extra $100 million $ in TV ads to educate the public as to what the hell a mErcury Milan is, when you already paid thru the nose to make the identical FUSION familiar. Not to mention the cost of the extra administration of the mercuty brand.
     
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  3. The last chance for mercury is to sale european ford model under the namplate mercury.
    Could you tell me someone what's doing kerkorian useful for Ford Motors ? Please Bill Ford, kick his ass, your family has enough money. Get a true car guy !
     
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  4. At this point, Ford should use its Mercury division as rebadged Ford of Europe cars and from its division from Australia. I personally see no reason to choose a Mercury Mariner or a Milan over the Ford counterparts. I doubt that Ford will even import any of its Euro models (unlike what GM is doing with its Opel and Holden cars). I think it will be time to just dump the brand.
    Also, what is Ford doing with Lincoln? Cadillac has turned itself around and is more competitive. Lincoln's competitors are the Hyundai Azera and Genesis. Its sad to see a brand that has potential, to slowly die in the same path as Mercury. It seems that Chrysler and Buick may soon have more prestige than Lincoln.
     
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