By on January 27, 2010

For all the praise and positive comparisons he earns, Ford’s Alan Mulally still refuses to man up and acknowledge that at least one of his firm’s brands is as meaningful to the American consumer as Kaiser or Cord. And it’s not like Mulally can just ignore the brand’s slide into ignominy: after all, people notice when you never introduce new products for a brand that was wholly comprised of cheap rebadges in the first place. Well, Inside Line noticed, and they cornered Mulally at the Washington Auto Show to get his take on the brand with no purpose.

“The plan right now is (to develop) Ford, Lincoln and Mercury,” Mulally answered.

He said Ford is working to more effectively position Mercury with smaller vehicles that occupy the void between the mainstream Ford brand and Lincoln, which directly targets the luxury-premium market. “That’s our plan — to continuously improve the Mercury and Lincoln brands,” Mulally said.

But after a little more discussion, Mulally felt compelled to reiterate: “That’s the plan right now.”

Could Mulally be more tentative? Mercury will continue to exist so that Lincoln can focus on rebadging larger vehicles? And this after Lincoln’s latest concept was the compact Concept C? It’s impossible to deny that Alan Mulally has done a lot of good at Ford, but his inability to take Ford’s luxury brands seriously is a major black mark on his tenure that analysts can only ignore for so long.

The “Mercury treatment” (i.e. throw the monthly output of a small chrome factory at an up-optioned Ford) will play especially poorly with Ford’s new global Focus and Fiestas, and will serve only to futher cement Mercury’s status as an unfunny joke played at the expense of the American consumer. Not to mention Mullaly’s well-intentioned desire to add more premium appeal to Ford-brand offerings. The sooner Mulally realizes that Mercury’s main competition is the JC Whitney catalog, the better.

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28 Comments on “Mercury Retrograde: Alan Mulally Stands By His Brand...”

  • avatar

    He’s killing Mercury intentionally even if he’s not saying it. Notice there’s no Sable, the Mountaineer is being canceled, and the Grand Marquis will be put out to pasture by 2012 IIRC. That leaves the Milan and Mariner.

    When the Fusion is re-designed in four years or so, I’ll bet you Mercury doesn’t get a new Milan. Ditto when the Escape is replaced, no Mariner. Then Mercury will be dead. I guess he’s just giving time for Lincoln-Mercury dealers to merge with Ford dealers.

    Ford only had enough cash and time to save two brands, not three, sadly.

  • avatar

    Maybe he does realize it, but can’t say so publicly. The last thing the dealers need right now is to have one of their car lines tagged with the moniker of “orphan.” That is the kiss of death for sales.

    Remember the reaction when Bob Lutz labeled Pontiac and Buick as “damaged brands,” and how dumb it made him look when he had to issue a retraction? Lutz, of course, was correct, but he should have known better than to put his foot in his mouth.

  • avatar

    The Mercury display at my local auto show was pathetic.

    This being the plan “for now” says to me that until Lincoln can generate sufficient volume to adequately support the dealers, there have to be some Mercurys to make up the difference.

    If they want to sell some cars, keep the Grand Marquis, rename it the Marquis, then take the existing Town Car, de-content it a bit (like the air suspension), and call it a Grand Marquis (a la the 74-75 Imperial that became a New Yorker and sold a bundle).

    But nobody listens to me.

    • 0 avatar

      I’ll do you one better; Kill Mercury and turn all the Merc/Lincoln dealerships into Volvo/Lincoln dealerships. You get to keep Volvo, which has technology and more appeal than Mercury and is a worldwide brand. That alone would save Ford hundreds of millions of dollars (at a minimum) because it would not have to make Lincoln into an international brand. You also don’t give (sell at firesale prices) Volvo tech to a possible future competitor (Geely).

  • avatar

    Here is what’s happening –

    – Mulally can’t publicly say that Mercury is being killed off because it will destroy current Mercury sales and trash residuals on current products.

    – Mercury is needed for the moment to help stand-alone Lincoln-Mercury dealerships fill out their lineup. As Ford continues to push Ford dealers to buy up their local L-M franchises and combine under one (or two) roof(s) there will be less of a need for Mercury to exist.

    – The cost of keeping Mercury around is minimal, and for the moment, there is no reason not to enjoy it, you get the same high quality well engineered product you get with the Ford badge, with a different set of cosmetic touches that you may or may not prefer, for pretty darn near the same price with the same options.

    As far as investors calling Mulally on ignoring the luxury divisions, he’s doing nothing of the kind. Lincoln is getting a lineup that is improved over what it had before, price points are being pushed up slowly so that new, unique products can be added to the lineup in the future and sold at a profit. Right now focusing on the core brand (Ford) obviously makes the most sense – you have to get your volume sales brand profitable to create a flow of new money before you can start investing it into the sub-brands.

    • 0 avatar

      A local Lincoln-Mercury dealer has just had its franchise yanked by Ford for insufficient sales, defined in this case as less than ten cars per month. I am wondering exactly how much the continuation of the remaining Mercury models helped these folks, and how much they help L-M dealers in general.

    • 0 avatar

      Absolutely. I would add that even when the Ford and L-M dealer merge is complete Mercury will still exist if the Milan, Mariner and the upcoming Focus-based car (I say name it “Mode,” French for fashion) continue to sell at a reasonable level with little advertising. If it makes money why not keep it? On the other hand, I find it interesting that Ford seems to have made no effort to secure the domain from Hewlett-Packard.

  • avatar

    Sad but probably inevitable. Ford only has only so many borrowed dollars to spend on R&D and Mulally chose to spend them on Ford products when he thinks he can get the most return. Given the choice, that was probably the right way to go.

    While Mercury is almost definitely dead, the question is if he can keep the Lincoln name alive until he has the funds to back it with competitive products?

  • avatar
    George B

    Lincoln will become the new Mercury at Ford Lincoln dealerships. Ford platform with more chrome. No way that Lincoln will be cross shopped against Mercedes and BMW. Jaguar, Land Rover, and Aston Martin were Ford’s more serious effort at the luxury car market and Ford wasn’t able to make those brands work.

  • avatar
    Mr. Sparky

    Mercury is quite obviously heading to the great chrome gates in the sky, but Alan’s not ready to the tell the children that Scraps, uh, Mercury, won’t be coming home from the veterinarian.

    I give Alan props for handling the Mercury problem. Ford is communicating where this is headed (“Mercury will sell premium small cars… Hey, look at this small premium Lincoln C test ballon, I mean, concept car”, “Sable, what Sable?”, “2011 Mountaineer, what Mountaineer?”, “Lincoln will be the volume leading in the L/M brand channel”) while not outing Mercury (which would cause sales and resale to cliff dive). Maximum Bob could learn a thing or two here after the damaged brands Pontiac death spiral.

    Ford is phasing out the brand in an orderly way by not introducing replacement products.

    New Explorer, No Mountaineer.
    New Escape (Kuga), No Mariner.
    Panthers Die, No Grand Marque.
    New Fusion (Mondeo), No Milan, and No Mercury.

    I expect Ford to announce the death of Mercury as a minor side note at the introduction of the 2014 Fusion/Mondeo. By then, I think the kids will already know.

  • avatar

    Lincoln will become the new Mercury at Ford Lincoln dealerships. Ford platform with more chrome.

    I have to say, I like the visual treatment of Mercurys better than Fords, and the Lincolns come with more than just chrome; back-to-back at the auto show, the Mercury interiors were more whimsical than the Fords (which I like), and the Lincolns covered the average dashboard materials with Leather (or leather-like) material that made ’em much, much nicer. The difference between Chevrolet and Buick interiors is about the same as Ford and Mercury, and the difference between Chevrolet and Cadillac interiors is less significant than Ford and Lincoln (based on what I saw.)

    If I had my way, the Mercury “look” (inside) would become the Ford “look”, and the Mercury “look” (outside) would become the Lincoln “look”.

  • avatar

    Yeah I always liked the look of Mercury better than the same Ford product, but then I always liked the look of GMC better than Chevy, so what the heck do I know. If Mercury dies will it stop me from considering a Ford? No. Will I still shop Mercury when I’m looking at used? Yes, you’d be a fool not to with them sharing SO MANY parts with their Ford bretheren.

    • 0 avatar

      A lot of us guys that have been around for a few years have great memories of old Mercurys: The upstyled 1940 coupes and convertible sedans; the 46-48’s with their longer noses and fancy diecast grilles and the rear quarter windows on the two-door sedans; the long, low, but too-heavy 49-51 cars, just begging to be customized; the 52-56 cars, all of which came with color-keyed interiors, many with genuine leather upholstery; the 57-58 Turnpike Cruisers; the 65 Comet V8’s.
      And all this was in spite of the fact that Mercury was ALWAYS, right from its beginning, either a fancy Ford or a decontented Lincoln. I suppose that what I’m saying here is that it’s possible by good marketing to make a continuing good image for a badge-engineered car. Therefore Mercury’s failure in recent years has to be laid at the feet of the marketers at Ford.
      “Mercury in retrograde” indeed. Astrologers tell us that many communication difficulties are caused during the time when Mercury is in retrograde.

    • 0 avatar

      @fincar: Mercury wasn’t always a “senior” Ford or a “junior” Lincoln, it was also once an almost entry-level small car in the Edsel range … most people know it as the first Comet…

  • avatar

    Hasn’t Mulally already said that the grand scheme is to combine all Lincoln-Mercury and Ford dealerships under one roof? Under that scenerio Mercury is a dead brand walking unless they give it a particular niche distinct from Ford (i.e., performance, hybrid, electric, etc). Otherwise, Mercury’s days as a slightly fancy Ford are numbered.

  • avatar

    If Lincoln ever moves up, if Ford (a la $40,000 Taurus) ever goes back down, there’ll be a need for Mercury. More importantly, there’ll be a need for standalone Lincoln dealerships, for the same reason why people don’t buy a Lexus to visit a Toyota service department.

    And if that demand for a premium dealership experience ever comes back, Mercury will be there to keep the Lincoln dealers alive. Too bad the latest Euro-Fords are NOT in Mercury’s future:

    • 0 avatar

      I don’t know about euro Fords as Mercs, but I agree that there is no place for Merc when Fords are too high and Lincolns too low.

      It would seem to me there is enough room in the NA market for 3 brands – assuming they were actually different from one another.

      I’m not really sure about the wisdom of killing of Merc – if that’s what is being done on the QT. I’m not sure Lincoln will ever be strong enough to stand alone, and I’m not sure a real Luxury brand can be sold alongside cars for the proletariat.

      A sales channel that sells entry level luxury and full luxury makes sense to me. The trick would be turning Lincoln into a respectable luxury brand, and Merc into an actual entry level lux brand. A sales channel selling transport for the masses and full luxury strikes me as less sensible.

      But then, maybe the plan is kill Merc quietly so LM dealers will jump at the chance to sell their franchise to the local Ford dealer, then let Lincoln die of natural causes and not have to go through the cull/arbitration process – which now days is unavoidable even when the bankruptcy judge says you can do it.

  • avatar

    Just don’t fire Jill.

  • avatar

    Why did Ford keep Lincoln and sort of Mercury but sold Volvo? If it weren’t for this site, then I would have no idea whether Lincoln and Mercury continued to exist.

    Since Ford has kept Mercury (for the time being), why not continue to badge engineer it and use it strictly for fleet sales? It would protect the Ford brand while giving FoMoCo access to easy and relatively cheap cash. The NPV on this arrangement should be huge.

  • avatar

    LM dealers could not survive as stand alone Lincoln stores when Lincoln’s volume was considerably higher than it is today. Combining Lincoln under the same roof with Ford won’t work either in the long run.

    Ford needs to get this mess figured out or forget about Lincoln too. Of course with Lincoln’s current line up and sales volumes there’s not much left to worry about.

  • avatar

    I agree with what has already been said by several people. If the plan is for Mercury to die a slow death, it would make no sense to announce it. Ford needs to get Ford right and then start helping Lincoln. I don’t think Ford has the resources to fix all 3 at once even if that is what they want to do right now.

  • avatar

    Whenever I read about Ford, Mercury and Lincoln I always ask myself what the hell is ‘luxury’ now anyway? Most electrical googaws are at a minimum optional on most cars, down to the least imposing vehicles. The same is true of leather. I suppose real wood is relatively scarce. Is it size? Looking at some BMWs and Audis, apparently not. Power I suppose is part of it, but does it have to be?

    I think that if someone could answer that question definitely, they might be able to figure out what to do with these three.

    • 0 avatar

      Good point. Luxury is supposed to be unobtainable by the masses. When a fair number of cars in the parking lot at my gym in a middle to upper-middle income neighborhood are BMW 5-Series and Mercedes E-Classes, it’s fair to say that they aren’t really luxury cars anymore. Neither are the Audis, Lincolns, Cadillacs, or even most of the Lexus line-up.

  • avatar

    If I had my way, I’d bring over the Ford Focus coupe cabriolet from Europe over as a Mercury. It’d compete against the Volkswagen Eos for a niche market of convertible coupes and sell a distinctive product not offered by either Ford or Lincoln. However, this would compete against the Volvo C70.

  • avatar

    One of our problems as armchair QBs is a lack of patience. We want Alan Mulally to do it and do it NOW –whatever “it” is. Fix Ford! Fix Lincoln! Fix Mercury! Come on, Alan, you slacker!!

    He’s doing fine. His plan, if you didn’t hear, is called “One Ford”. He is Focus-ed (pardon the pun) on Ford, as he rightly should be, for if Ford isn’t fixed, it doesn’t matter about Lincoln or Mercury as they go down with the blue oval ship as well.

    Pairing Volvo with Lincoln as someone suggested above sounds like a fine idea, especially since I *hate* the thought of selling Volvo. But if the L/M combo platter isn’t creating enough volume for certain dealers to stay alive I wonder if Volvo moves enough metal to please the accountants.

  • avatar

    Niedermeyer, you’re really over the top on this one. Jeez, I think TTAC may have run out of Ford-related stuff to bitch about.
    Is site traffic down so much that you have to manufacture false outrage over Ford not killing Mercury fast enough for you?

    It’s OK, I understand how it is…and I’ll take the bait. Why? Because I think you’re great. Every now and then, though, you need to be taken out to the woodshed.

    Trash-talk and taunts about Mulally not manning up are fine for the NBA, a great story for the press and online addicts like us, but not so good for Ford stock price. Saying that Mulally’s “inability to take Ford’s luxury brands seriously is a major black mark on his tenure that analysts can only ignore for so long” is ridiculous. What is he supposed to do, answer with the equivalent of Bob Lutz’s idiotic “damaged brands” statement about Buick and Pontiac?

    Ford will kill Mercury when it will cause the least pain. That could be after 2012 when the Panther platform dies, when the mainstream products are replaced, and the L-M franchises that haven’t closed are merged or sold into Ford dealers. That’s when Lincoln will officially become what it already is — more like Buick than Cadillac, positioned as a near-luxury brand for under $50K sedans and CUVs, with maybe a stylish traffic-builder or two, and sold alongside Fords.

    The Ford brand is and should be Dearborn’s top priority now. Ford shouldn’t try to take on too much at once. I have a feeling that President Obama would now agree with that. Forget about Lincolns that take on Lexus and the German luxo brands. Ford’s PAG fiasco should have taught them it’s nothing but a fool’s game and ego stroke.

    Or, maybe I’m completely wrong and the only reason Mercury lives is because Mulally has a crush on Jill Wagner.

  • avatar
    Steve Biro

    “It’s impossible to deny that Alan Mulally has done a lot of good at Ford, but his inability to take Ford’s luxury brands seriously is a major black mark on his tenure that analysts can only ignore for so long.”

    Good Lord, Edward… Ford is barely back in the black and you’re giving us this? First, Mercury may or may not be headed to the Island of Misfit Toys – but no one on this Web site knows. And anyone insisting Mercury is clearly on its way out is merely engaging in conventional groupthink.

    To me, Mercury is clearly a placeholder right now – a brand that costs almost nothing to keep going and would cost a lot to close. Once Mulally has Ford solidly in the money, he can turn to Mercury. I agree with Sajeev – there can be a strong role for the brand to play in the future and I expect more-unique product in the future, even if it’s all based on common platforms with Ford.

    And, as for the analysts, they already have a crush on Alan Mulally. If he delivers a profitable quarter on Thursday, it’ll be true love. If he turns a profit for the year, as is rumored, they’ll be calling the minister and reserving the church hall. As far as they are concerned, Alan can keep Mercury as long as he wants if the company keeps making money.

    You accuse Mulally of being tentative about his plans for Mercury. But, if you’ve been listening, you’ll notice that’s the way he talks about EVERYTHING. Clearly, he’s not showing his hand to us or anyone else. Talk is cheap. Just ask Bob Lutz.

    And, for the record, while I generally have preferred the styling of the Ford versions of vehicles shared with Mercury over the years… there have been some home-run victories for Mercury in my humble opinion. These include but are not limited to the 1949-52 Mercury sedans and coupes vs. equivalent Fords, the 1967 Cougar (despite how good the Mustang also looked that year), the European-built Capris offered in the early-to-mid 1970s (no equivalent Ford sold in this country as the Capri was actually a European Ford) and both the current and previous incarnations of the Milan vs. the Fusion. The Fusion is a nice-looking sedan, but the Milan looks just a bit more sophisticated and European to my eyes.

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