Ford CEO declines to confirm plans to kill the Mercury brand
Ford Motor Co. Chief Executive Alan Mulally said the automaker is reviewing its nameplates but declined to confirm reports this week that he plans to kill the Mercury brand.
“We have shared in the past that we continue to look at our portfolio of brands and specific nameplates themselves, but we have nothing new to add to that,” Mulally said Friday in a meeting with industry analysts.
Earlier in the meeting he talked about the automaker’s “laser-like focus on the Ford” division, with no mention of Mercury.
Mulally said the company was adhering to a long-term plan to simplify its operations by focusing on fewer brands and by developing vehicle platforms that could be used worldwide.
The former Boeing Co. executive is credited with guiding Ford through the recession without having to join rivals General Motors Co. and Chrysler Group in bankruptcy reorganization.
Mulally said the new Ford Fiesta subcompact, which goes on the market in the U.S. this summer, shares about 65% of its parts with Fiesta models sold in Europe and China.
The upcoming new-generation Focus that goes on sale here next year will share as much as 85% of its content with similar versions of the compact car sold in other regions of the world.
Such a strategy enables Ford to spread design and development expenses across a great number of vehicles sold, Mulally said.
As a stand-alone American-designed and -built vehicle, the Focus would have sold about 150,000 units annually, he said. But as a global vehicle, its development expenses are spread across sales expected to approach 2 million. The automaker also derives economies of scale and other efficiencies by having the various regional versions share the same platform and other components, he said.
Analysts say that dropping the struggling Mercury brand would be part of a move to focus the automaker’s design and sales efforts on its Ford and Lincoln lines. Ford officials have previously said they planned to push Lincoln over Mercury in design and development decisions.
Mulally “has shown little mercy when forced to make decisions that set the company up for long-term growth,” said James Bell, an analyst with Kelley Blue Book, the auto pricing information company. “Closing this historic brand, while bittersweet, is yet another tough but good decision.”
Bloomberg News reported Thursday that Ford’s board of directors would meet this summer to consider a proposal to wind down Mercury.
Ford has made moves in recent years to shrink the number of brands it produces. In March, the company sold its Swedish Volvo division to Zhejiang Geely Holding Co. of China. Previously, it shed the Jaguar, Land Rover and Aston Martin nameplates.
Killing off brands has been part of the formula GM has used to revive its business over the last year, shutting down its Pontiac, Saturn and Hummer divisions and selling off the Saab line.
The Mercury line is down to just four vehicles: the mid-size Milan sedan, the Mariner and Mountaineer SUVs and the giant Grand Marquis sedan.
Production of the Grand Marquis will end next year when Ford closes the Canadian factory where the car is built. And while Ford has said it plans to build a new-generation Ford Explorer SUV, it has been silent on any plans for the Mountaineer, the Explorer’s Mercury-branded sibling.
Mercury was established in 1939 by Edsel Ford, son of founder Henry Ford, to fill what he considered a void between the automaker’s mass-market Ford brand and the upscale Lincoln line.
Sales peaked in 1978 at 579,498 but have fallen precipitously since then. Mercury sold only 92,299 vehicles last year. By comparison, the Ford brand sold about 1.4 million.
