Reports Say That Ford is Ready to Kill Mercury

By Chris Haak

Since Mercury’s new-product fountain seemingly dried up several  years ago, there has been speculation from time to time that Ford was considering shuttering its Mercury brand.  Each time, Ford denied that the rumors were true and promised that Mercury’s future plans would be clarified at some point down the road.  According to a report that first surfaced from Bloomberg, Mercury may now have reached that fork in the road where its future must be decided, and the future may not be bright for the brand that once brought personal luxury to Ford, and now brings marginally tarted-up Fords with waterfall grilles to the market.

Meanwhile, the maintenance of the Mercury brand appears at its face value to be contrary to Ford CEO Alan Mulally’s strategy of focusing most resources on the core Ford brand worldwide and divesting itself of distracting niche brands such as Mazda, Jaguar, Land Rover, Aston Martin, and most recently, Volvo.  Although Ford announced just this past January 2010 that Mercury would receive a new Lynx based on the 2012 global Ford Focus, the brand’s current lineup is about to shrink to two cars after the demise of the geriatric Grand Marquis and unloved Mountaineer SUV.  The remaining models will be the Milan midsize sedan (a rebadged Ford Fusion) and the Mountaineer crossover (a rebadged Ford Escape).

If Ford plans to do something with Mercury, the timing seems good.  Like some of Detroit’s other recent dead brands littering life’s highway (Plymouth in 2001, Oldsmobile in 2004, Saturn and Pontiac in 2009, and Hummer in 2010), the brand has fallen hard from peak sales.  In 1978, Ford sold 579,498 Mercurys, and in 2009, it sold just 92,299 vehicles.  Mercury sales are up so far in 2010 as the auto market begins its recovery, but its sales gains lag Ford Motor’s overall gains.  The aforementioned crossroads that Ford finds itself with Mercury means that the company will either have to come up with new models for Mercury (meaning product-development and marketing expenses) or pull the plug on the 71 year old brand.

Edsel Ford, son of Ford Motor Company founder Henry Ford, created the Mercury brand in 1939 during the waning days of the Great Depression as a mid-price brand between low-cost Ford and high-zoot Lincoln.  Until recently, the biggest obstacle to eliminating Mercury has been the Ford family’s reverence for Edsel.  They didn’t want to euthanize Edsel’s brainchild, and since the family holds about 40 percent of the corporation’s voting stock, weren’t really required to.

The family’s interests are represented within the company by Executive Chairman Bill Ford (Henry Ford’s great-grandson), and Elena Ford (Henry’s great-granddaughter).  Bloomberg’s sources noted that the family is now in support of the move, and that Elena, while initially opposed to the move, has come to accept Mr. Mulally’s recommendation.  (Elena Ford was once in charge of Mercury marketing, so she may have a personal interest in the brand beyond family loyalty to Edsel that influenced her earlier opinion).

Should this story prove true (Ford spokespeople neither confirmed nor denied that it was true, only saying that an announcement would be made if anything changed), the move would likely have a more profound impact on some dealers than it would on Ford itself.  Mercury sales only comprised 1.9 percent of Ford Motor Company’s global sales in the first quarter, which may have encouraged the family to act now in the best interest of the overall business rather than out of sentimentality.  Mercury held 0.9 percent of the US market through April 30, which is the same share it held a year ago.

Ford-Lincoln-Mercury dealers – those that carry all three brands – are likely to see little negative impact from a shuttered Mercury, since every Mercury has a Ford counterpart that shares basically all features aside from minor trim variations.  More complicated is the situation with Lincoln-Mercury dealers that do not have a Ford franchise, because Mercury is currently those dealers’ volume brand.  Ford’s plans reportedly call for L-M dealers to close or with Ford dealers to fill out the lineup.

The bad news for Lincoln-Mercury dealers doesn’t end with Mercury’s potential demise, either.  The Wall Street Journal is reporting that the Lincoln brand is also under “an intense review” because the brand’s relatively new lineup hasn’t resonated well with buyers.  In fact, the differentiation between several Lincoln models and their Ford counterparts is closer to the historical differentiation between Ford and Mercury.  For example, the Taurus and MKS don’t share sheetmetal, but share platforms, some powertrains, and many features.  It’s the same story with the MKT and Flex, MKZ and Fusion, and MKX and Edge.  The differences between the current Lincoln lineup and and the Ford lineup – where there is platform sharing – reminds one of the 1967 Mustang vs. the 1967 Mercury Cougar.  If Lincoln would also happen to go away, then the “merge with a Ford dealer or go out of business” concept takes on a much greater sense of urgency.

Author: Chris Haak

Chris is Autosavant's Managing Editor. He has a lifelong love of everything automotive, having grown up as the son of a car dealer. A married father of two sons, Chris is also in the process of indoctrinating them into the world of cars and trucks.

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6 Comments

  1. Ford has being doing well lately!!!!!!!

    But Alan Mutally would be wise to hire some ‘Car Guys” at Ford!

    “He has cut all the brands he needs to cut”, he should be spending money on Mercury!
    One Ford is not enough, Mercury has little baggage just needs some new products, such as Grand Marquis, Cougar!

    Here they are going to hurt the resell of the new upscale Taurus by going after the police market are spending money for the Police Intercepter and even a Explorer, to try to recap a 75,000 market, but cannot do nothing for Mercury!
    I would be willing to bet, if Ford named or rebadged a Lincoln such as MKS AND CALL IT MERCURY GRAND MARQUIS, it would sell better!

    If they are going to dimiss the Mercury market as a old persons car with a MARQUIS having a average age of 70 year old!
    Well they are “making 70 year old persons “every day! People are living longer so why go after a market you have to fight for when the old market has little risk!

    No Mr Mutally you said you needed Ford to focus a ‘ONE FORD’, but failed to see one Ford includes Mercury!

  2. It could be interesting to see if the future “70 old persons”, mainly the first wave of the baby-boomers will go for a Mercury or a Buick? Ironically, the new Lacrosse, the Enclave and the upcoming Regal begin to attract younger folks, who doesn’t want to drive “grand’pa Camry” or “auntie’s Accord” 😉

  3. I think that everyone agrees that something has to be done about Mercury. “Not as ugly as a Ford” is not exactly a marketing strategy. (i like Fords, I just think the 3-bar grill design is seriously ugly looking).

    The 3-tier strategy is long dead. A third brand needs to be something other than a Jr. Luxury brand. Sporty, eco, funky, whatever, anything but an almost ran luxury brand.

    I’d revive it as an “American Mazda”. I.e. younger, hipper, and more sporty. Bring back the Cougar, and compete directly against brands/marques like Mazda, and Scion.

  4. As an unabashed Ford fanatic, the mismanagement of Lincoln-Mercury has been an ongoing frustration. A few years ago it seemed like Ford had found that niche for Mercury, and marketed the brand to women and the urban lifestyle (marked by the ad campaign featuring the lovely Jill Wagner). It seemed to resonate, as 60% of Mercury buyers are women, many of which may not have considered a Ford product otherwise. The lineup seemed to be finalized as well, with Mercury filling the smaller vehicle line, and Lincoln picking up with larger vehicles (only overlapping with the Milan and MKZ). It all seemed to make some sense except for one glaring problem: as always, Ford didn’t really commit to the strategy. Marketing for Mercury has dried up almost completely, and, most importantly, almost no real differentiation has been made between Ford and L-M, even though Lincoln has gained much-needed product. I understand and agree with Mulally’s desire to simplify things and focus on core brands, and maybe Mercury’s end has come, but the lessons of Mercury, namely that real differentiation from Ford are necessary, need to be learned, otherwise we’ll be reading about Lincoln’s end in a few years. A true premium brand is beneficial (and almost necessary) and Ford’s management of Lincoln has been a confusing mess for decades. In an otherwise sterling track record since his arrival, Mulally has seriously dropped the ball with L-M.

  5. I agree with other posters here and believe that Mercury has been mis-managed for years. Back in the late 1990s, Jacques Nasser said that “Mercury would never again be a full-line brand” and cancelled any number of products. Later, they semi-reversed that thinking by introducing models like the Monterey to plug a hole in their lineup.

    However, this on-again/off-again campaign of kill/keep Mercury has tarnished the brand far worse than Dearborn has anticipated. While the situation seems somewhat more akin to Plymouth’s death than the more recent death of Saturn/Pontiac, there is a lesson: In order to succeed, you must allocate funds/resources or just stop wasting everyone’s time.

    What I never understood about how Mercury was managed is why they never offered any true differentiation. They always claimed that the volume never justified the investment, yet even the old-mismanaged GM seemed to have better differentiated models like the G6 from the Malibu or the Sunfire from the Cavalier, etc.

    If GM could do this, why couldn’t Ford?

    This will truly be sad…

  6. As an unabashed Ford fanatic, the mismanagement of Lincoln-Mercury has been an ongoing frustration. A few years ago it seemed like Ford had found that niche for Mercury, and marketed the brand to women and the urban lifestyle (marked by the ad campaign featuring the lovely Jill Wagner). It seemed to resonate, as 60% of Mercury buyers are women, many of which may not have considered a Ford product otherwise. The lineup seemed to be finalized as well, with Mercury filling the smaller vehicle line, and Lincoln picking up with larger vehicles (only overlapping with the Milan and MKZ). It all seemed to make some sense except for one glaring problem: as always, Ford didn’t really commit to the strategy. Marketing for Mercury has dried up almost completely, and, most importantly, almost no real differentiation has been made between Ford and L-M, even though Lincoln has gained much-needed product. I understand and agree with Mulally’s desire to simplify things and focus on core brands, and maybe Mercury’s end has come, but the lessons of Mercury, namely that real differentiation from Ford are necessary, need to be learned, otherwise we’ll be reading about Lincoln’s end in a few years. A true premium brand is beneficial (and almost necessary) and Ford’s management of Lincoln has been a confusing mess for decades. In an otherwise sterling track record since his arrival, Mulally has seriously dropped the ball with L-M.

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