02 June 2010

Ford Board Approves Ending Mercury

The Wall Street Journal

Ford Motor Co. will shut its Mercury brand after its board of directors voted to phase out the 71-year old nameplate, according to a person familiar with the matter.

The company has scheduled a news conference for later Wednesday where it will outline its Mercury plan, this person said.

A Ford spokesman said the news conference will cover the company's strategy in the U.S. "I can't get into specifics," he said.

Ford Chief Executive Alan Mulally and his top lieutenants recently won the backing of key members of the Ford family to kill Mercury after years of dwindling sales. Its sales fell another 10.7% for May compared with the same month last year, the auto maker reported Wednesday.

Mercury's future has been in limbo ever since Mr. Mulally arrived as CEO in 2006 with a restructuring plan that relied on phasing out extraneous brands and putting most of the company's resources into its Ford division. Since then, Ford has sold Jaguar and Land Rover, while the sale of its Volvo brand should be complete later this year.

Mercury was supposed to give Ford a midpriced car that fit between inexpensive Ford models and its more luxurious Lincolns. But that plan bore little fruit in recent years. In 2009, Ford sold 92,299 Mercury vehicles, down from 359,143 in 2000.

The hundreds of dealers that sell only Lincolns and Mercurys may find it difficult to continue without the volume from Mercury. A person familiar with the matter at Ford said the company hopes to merge many of those dealers with existing Ford dealerships or shut them. Mercury had 1,780 U.S. dealers at the end of 2009.

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