Why Ford Won't Kill Mercury

Is Ford Motor Co. killing off its Mercury Division? That's the $64,000 question as rumors persist that the Mercury brand is in a death rattle or should be sold off, as proposed by Kirk Kerkorian's right-hand auto man, Jerry York. My answer to the hot question, based on more than 50 years of writing about cars plus 25 years as an at Ford, is: No, not in the foreseeable future. Let me tell you why I

Is Ford Motor Co. killing off its Mercury Division?

That's the $64,000 question as rumors persist that the Mercury brand is in a death rattle or should be sold off, as proposed by Kirk Kerkorian's right-hand auto man, Jerry York.

My answer to the hot question, based on more than 50 years of writing about cars plus 25 years as an “insider” at Ford, is: “No, not in the foreseeable future.”

Let me tell you why I believe that and what I think Ford's strategy is.

True, Mercury's product line has been thinned, while at the same time, Lincoln's product line has been expanded. And Lincoln brands can be sold at significantly higher bucks than Mercury brands. (More on this in a minute.) And remember, virtually all of these vehicles are sold in the U. S. through the network of Lincoln-Mercury dealers. (In small markets, there also are Ford-Lincoln-Mercury dealers.)

The Mercury line-up presently goes like this: Mariner and Mariner Hybrid compact SUVs, Mountaineer SUV and the Milan, Sable and Grand Marquis cars.

In contrast, when the new Fiesta subcompact, or “B-car,” is introduced soon, Ford dealers will be offering that, in addition to Focus, Fusion and Taurus cars and a wide range of SUVs and trucks (but no Crown Victoria, which will be relegated only to taxi and police fleets).

So Mercury in the middle will continue its traditional “upscale” role, with no low-end entries but with the Grand Marquis so treasured by us old geezers. The Grand Marquis today arguably is the best value in the automotive market.

The Lincoln line-up presently is MKZ (upscale Lincoln version of Ford Fusion and Mercury Milan), MKX (upscale version of Ford Edge cross/utility vehicle), Explorer-based Aviator SUV, F-150-based LT luxury pickup truck, Expedition-based Navigator and, finally, the rear-wheel-drive Lincoln Town Car.

To this will be added this summer the MKS, a sleek upscale version of the Mercury Sable and Ford Taurus.

The Lincoln lineup will be enhanced next year by the addition of a station wagon, tentatively named the MKT. You can bet it will be priced at the Lincoln level rather than as a Mercury, part of Ford Motor's strategy for higher revenues from badge engineering. A production Lincoln station wagon will be a first, but it's a smart move because wagons are popular among luxury brands.

To appreciate what Ford is doing, you have to look at sticker prices on rebadged vehicles. For example, the mid-sized Fusion is $18,010, the Milan $19,095 and the MKZ $30,980. Of course, equipment levels are different, but all three cars come off the same design platform at the same assembly plant.

Likewise, the Lincoln MKX at $35,840 carries a big premium over the $25,565 Edge, and the Lincoln Navigator lists for $48,745, compared with $31,120 for a Ford Expedition.

It's clear from the popularity of Mercedes-Benz, BMW and Lexus that today's yuppie buyers are willing to shell out big bucks for their wheels. The Detroit domestics are finally catching on to this particular branding-up game. In Ford's case, it is re-branding cars and trucks as Lincolns rather than making the intermediate stop at Mercury.

So the stair-step concept of automobile marketing created by General Motors Corp.'s Alfred P. Sloan Jr. in the 1920s remains in place, but within a brand's name. That may help Mercury stay alive.

The idea was that as car buyers prospered and more and more new car features were introduced, buyers had to be induced to buy fancier, better-equipped cars but stay within the corporate family.

I doubt if any Mercuriac has ever thought of Sloan as a godfather of Mercury, but perhaps he should be, since the brand was born out of Ford's need to join stair-stepping. When Walter P. Chrysler formed his auto company out of the old Maxwell-Chalmers in the mid 1920s, he quickly moved to the Plymouth-Dodge-DeSoto-Chrysler-Imperial ladder.

When Chrysler Corp. subsequently ousted Ford Motor even from second place in industry sales in 1933, it must have been a shock to Henry Ford, and the company embarked on creating its own stair steps upward.

First came the upper-middle-priced Lincoln-Zephyr as a 1936 model and then the lower-middle-priced Mercury for 1939.

Over the decades since, Mercury models have gone through cycles of being unique from Ford to being mere clones. Cost considerations now dictate cloning. Look how Toyota Motor Corp. has successfully sold essentially the same car as a Camry, Avalon and Lexus IS. Badge engineering is not just a Detroit thing.

There likely has been much hand-wringing among faithful Mercury folks about the future of the “real Mercury,” the Grand Marquis.

Town Car, Crown Victoria and Grand Marquis cars — internally called the Panther family — now are assembled at Ford's St. Thomas, ON, plant in Canada. Together they continue to produce enough volume to justify their existence. The designs haven't changed much in years, so investments should have long been amortized even with updates in engines, frames and suspensions. And there is no direct competition for the sturdy, virtually bullet-proof rear-wheel-drive, body-on-frame layout.

In Canada, Ford merged its two dealer bodies into one: Ford-Lincoln, eliminating the Mercury brand, but keeping the Grand Marquis with a Ford badge. Is this a portent for the U.S.? I don't think so.

This Ford Grand Marquis also is sold as an export vehicle. Three years ago, when I was in Mexico City, I noted a plethora of these chauffeur-driven, Canadian-built cars clustered around luxury hotels.

Some of the relatively young managers at Ford have been trying to get rid of the Panther line for years, basically because they don't identify with it. It's old in origin, customers and concept. But its performance in the market, loyalty of owners and even accolades from Consumer Reports keep it going.

The venerable Panther faces three threats: 1) Will it become a victim of the environmental craze over global warming and 35-40 mpg fuel economy requirements? 2) Will the gradual dying off of its traditional retiree customers be replaced by aging Baby Boomers who discover the comfort and value of the car design? 3) Will any successful competitor for the taxi and police business of Crown Vics appear on the scene?

As Forrest Gump said, that's all I have to say about that.

Mike Davis is an auto commentator, author of several automotive history books and a retired Ford Motor Co. public relations executive.

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