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Ford weighing Mercury’s fate

Signs point to end of the line as sales dry up

A Mercury Montego rolled down an assembly line. Ford is reportedly moving to discontinue the sagging division. A Mercury Montego rolled down an assembly line. Ford is reportedly moving to discontinue the sagging division. (Getty Images/File 2004)
By Keith Naughton
Bloomberg News / May 28, 2010

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SOUTHFIELD, Mich. — Ford Motor Co. is preparing to wind down the Mercury line, created in 1939 by Edsel Ford, after sales plunged 74 percent since 2000, according to two people familiar with the plan.

The automaker’s top executives will present a proposal to kill Mercury to directors in July, said the people, who asked not to be identified revealing internal discussions. Mercury will lose two of four models next year and will be starved of products and promotion, the sources said.

Chief executive Alan Mulally emphasized the Ford brand as he revived the only major US automaker to avoid bankruptcy. The timing of Mercury’s demise depends on how fast executives can persuade the brand’s dealers, who also sell Lincolns, to close or merge with Ford showrooms, they said.

“Mercury is a forgotten brand,’’ said John Wolkonowicz, an auto analyst with IHS Global Insight in Lexington, Mass. “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, which have lagged in profit.

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 sources estimated. General Motors, as part of its government-backed reorganization last year, sold or closed four of its eight brands sold domestically.

Edsel Ford, son of founder Henry Ford, established Mercury during the 1930s as a midpriced alternative to mainstream Ford and upscale Lincoln. Edsel’s great-granddaughter, Elena Ford, now the automaker’s director of global marketing, initially opposed discontinuing Mercury, the sources said.

Doing away with Mercury is supported by Ford’s 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.

Mercury sales peaked in 1978 at 579,498. Deliveries fell 84 percent to 92,299 last year. As the US auto market recovers, Mercury’s sales are up 23 percent this year through April, less than Ford Motor’s overall gain of 33 percent, according to researcher Autodata Corp. of Woodcliff Lake, N.J., Mercury had 0.9 percent of the US market through April, unchanged from 2009.

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