Ford Decides To Retire 72 Year Old Mercury Brand

The Detroit News reports that Ford Motor Company today confirmed that it is killing its mid-market Mercury brand to focus its resources on its luxury Lincoln marque.  “We are very proud of its history, but we are now looking forward,” said Ford Americas President Mark Fields, who promised that the nation’s 1,712 dealers would be fairly compensated for the loss of their Mercury franchises.  He said the company would work with them to make sure their remaining Ford and Lincoln franchises make up for the lost sales. “We absolutely remain committed to working with our dealers.”  There are no stand-alone Mercury dealers left. However, 276 of those stores are paired only with Lincoln, and Ford acknowledged some may have a hard time surviving alone.

Ford said no employees will lose their jobs as a result of the decision, which was ratified at a meeting of Ford’s board of directors this morning. It had been expected for some time; the brand has been losing market share in the United States since the 1990s.  ”Our total market share for Mercury is eight-tenths of a percent,” Fields said, noting that Ford’s mass market Blue Oval brand has increased its share of the U.S. market by more than double that amount since the beginning of this year.  In fact, he said, Ford’s success is a big reason for the decision, as it gives the automaker the financial resources it needs to wind-down Mercury without undermining its stated goal of being “solidly profitable” this year. Ford made $2.1 billion in the first quarter.  “It really allows the company to absorb the short-term cost of discontinuing Mercury,” he said.

The decision also is motivated by the need to invest more resources in Lincoln, which has struggled to hold its own in an increasingly crowded and competitive luxury marketplace.  “We’ve made a lot of progress with the Ford brand,” Fields said. “Now’s the time to do that with Lincoln.”  Derrick Kuzak, Ford’s head of global product development, said the automaker will deliver seven all-new or substantially refreshed Lincolns to showrooms over the next four years.

Included in that will be a new compact based on the same platform as the new Ford Focus. Mercury was to get a more upmarket version of the Focus, but those resources will now go to a Lincoln version that Kuzak said would be quite different from the Ford version.  “It will not be a badge-engineered version of another Ford product,” he said.

Lincoln also will get new, brand-exclusive powertrains, including an all-new V-6 engine. And all Lincolns, including the big Navigator sport utility vehicle, will be available with one of Ford’s fuel-saving EcoBoost engines as an option.

Dealers were informed of the decision during a webcast this afternoon. Some said they were “disappointed” in the decision.  “My phone’s been ringing off the hook,” said Bob Tasca, chairman of the Lincoln Mercury DealerCouncil.  He said the reactions he was getting from his members depended on whether they also owned a Ford store. Tasca said those who do “are OK” and believe the decision will make the company stronger.  As for the rest, he said “it’s a different call.”  “Some of them are going to go out of business,” Tasca said.

Fields said Ford will work with those dealers to combine their Lincoln franchises with a Ford franchise where possible. The rest, he said, will be compensated.  Henry Ford’s son, Edsel Ford, started the Mercury brand in 1938 to bridge the gap between Ford and Lincoln. Since then, there has too often been little to differentiate Fords and Lincolns.

But the brand has succeeded in attracting new buyers — particularly women — who would not otherwise have considered a Ford product. Now, Fields said the Blue Oval’s newest products are proving just as attractive to those customers. He noted that Ford’s share of the U.S. car market has increased by more than double Mercury’s total share since the beginning of this year.  George Pipas, head of sales analysis at Ford, said 53 percent of Mercury customers cross-shop Ford or Lincoln.

By:  Bryce G. Hoffman – The Detroit News