Somthing rotten in Denmark

[mercurymichael]

LM4EVR I think you are entirely correct. Mercury, Pontiac, Olds etc. has nothing to do with living in the past but a combination of the erroding middle class in America and the fact that we as a nation continue to give away our manufacturing and wealth to foriegn nations.

 

I cannot tell you how many times I have heard people justifing purchasing a Honda or Toyota because it was build in the US by American workers. They never take into consideration that all of the profits benefit a foriegn government or that if they purchased a domestic car built in the US that it would employ an American worker and the profits would remain here where they belong. In addition, if enough people purchased domestic cars built in the US, it would employ more American workers as demand increased leading to reopening or building of more factories. Yes, quality was an issue once upon a time and the domestics earned the rep they received, but the idea that domestics are not as good as foreign cars is living in the past. The number of quality issues between manufacters is minute and often not serious at all.

 

As far Mercury's demise I do blame Nassar and the Ford Family for not staying on top of what was happening. At the beggening of the 90's when Ford could not build enough trucks and SUVs they completely forgot about the car side of the business. They let the Crown Vic, Taurus and Thunderbird age and die on the vine--did not even try! Did not bother to replace the Contour and let the Escort and Mustang get long in the tooth as well. Since Mercurys and Lincolns are all based on these cars in some form or another and no time or money were invested the L-M division suffered along with Ford cars. The quick fix: Mercury and Lincoln trucks and SUVs! Now that SUV's and trucks are somewhat passe, L-M was left with some quick rebadges and next to no advertising. Then they started starving Mercury which has led to where things are today.

 

1985 was Mercury's banner year selling over 500k cars. In 1985 the was the Grand Marquis in 2 dr, 4dr and Colony Park wagon and 2 trim levels. Marquis first half or the year and Sable in the last half in both 4dr and wagon and 2 trim levels, Cougar in 2 trim levels, Capri in multiple trim levels, Topaz in 2dr and 4dr with 2 or 3 trim levels and Lynx in 2dr, 4dr, wagon and LN-7 with multiple trim levels. In 2009 Mercury sold 90 some thousand cars with a 31 years old Grand Marquis, an aging Mountaineer and Mariner in various trim levels, Milan and an almost Sable (3-4 months). 2009 was one of the worst years ever for auto sales for everyone, not just Mercury. Overall I would say they did pretty well considering what they were given to work with and they were running 25-33% ahead in 2010. I do see potential for Mercury if they were to be given some product and advertising. Meanwhile, Lincoln now has 6 models and cannot match Mercury in sales.

 

This is just how I see it.

[akirby]

Stable ground!? WTF? Ford isn't maintaining strong volume they are just cutting capacity to match their reduced sales...and they will have to cut further if sales continue to spiral down. Not to mention the companys debt.

 

Example: In both 2004 and 2005 Ford sold OVER 900,000 profitable F-Series trucks. By 2009 F-series was down to less than 415,000. I use that example because it is simply Fords best selling vehicle. This company wasn't built on low volume.

 

What part of the entire U.S. car market dropping from 17M per year to 11M per year did you miss? It wasn't Ford - it's the economy!

 

Some Ford models were being overproduced requiring huge incentives to get rid of them or dumping to rental fleets. The profitable retail sales were already gone and they weren't going to magically reappear. All the mgt team did was stop overproducing and get rid of capacity that they simply didn't need. Was it the result of poor management and poor product and business decisions? OF COURSE! But that's water under the bridge.

 

If Ford had not closed plants and cut back on the overproduction they would also be in bankruptcy today.

 

Ford is no longer spiraling down. I guess you don't understand market share - or maybe you only care about the number of factory jobs.

[AlRozzi]

If you were starting a new full line car company from scratch today to cover the gamut from entry level to top end luxury , would you create 2 brands or 3?

Did you know that business analysts have done calculations and did determine the optimum number of brands for a most successful auto company, and the answer is three?

 

They concluded that too many brands is an unsustainable business practice, obviously. GM and Ford have been there and VW is doing it now. Too expensive and resources get spread to thin.

 

At the other extreme, they concluded a one-brand auto company cannot be sustainable (I won't get into detail as to why - I think you know some of them) and best is three, although two can work.

 

If Ford weren't in the dire straits of having an overload of debt, they wouldn't be selling Volvo and more especially, would not be dumping Merc. They are doing it because they have no choice.

[F250]

What part of the entire U.S. car market dropping from 17M per year to 11M per year did you miss? It wasn't Ford - it's the economy!

 

Mark Fields Way Forward plan was announced in December 2005. The recession did not begin until December 2007. Obviously the company was in serious trouble years before the market drop.

[retro-man]

Nice post!

And right away, you were attacked by those saying that this is how it works, capitalism, free market...blah blah blah... But those attackers (you know who you are) were not listening to what you said. The post is not really about whether or not the Mercury decision was good or bad - It is about this being a SYMPTOM of a bigger problem. I agree with you 100%.

 

I often think - We are told that the US is now a "consumption" based economy. So, in order to have economic growth, we need to spend. In order to spend, we need to earn. In order to earn, we need to produce, But we have sold out much of our production to foreigners (as you noted) or outsourced it entirely. So, wages are now decreasing. So, we can't sustain a consumption based economy simply because we don't produce! You are absolutely correct - we have a much bigger problem!

So basic, so true, so roundly denied. I heard some economist (rather a lone voice amongst professional business analysts) at the beginning of the recession say something to the effect of "You can't stop making things and expect to maintain your standard of living." Mercury is neither here nor there to me - they haven't made anything that stirs me since 1970 - but I agree with the broader premise.

[jpd80]

So basic, so true, so roundly denied. I heard some economist (rather a lone voice amongst professional business analysts) at the beginning of the recession say something to the effect of "You can't stop making things and expect to maintain your standard of living." Mercury is neither here nor there to me - they haven't made anything that stirs me since 1970 - but I agree with the broader premise.

On that production vein,

They're pitching to the "bland" market of lowest common denominators with vehicles

that offend the least number of people in the intended demographic.

Huh?

Vehicles that inspire or stir people's emotions now seem to be frowned upon,

having a vehicle which creates polarising opinions is not seen as good for business..

that's kind of sad....

Edited June 5, 2010 by jpd80

[LM4EVR]

I would like to point out, in defense of my basic argument, that Henry Ford I made his fortune AND put thousands of men and woman to work in thousands of jobs of every conceivable skill level. Henry ford II did the same thing when he turned Ford around after the war. Did these men make missteps? Yes, so don't nit pick over the mistakes because they recovered from those mistakes and made Ford stronger. The thing is they built the company and contributed to the overall economy of our nation. If the F150 has dropped 50 per cent in sales over the last 5 years that is even scarier than the death of Mercury. That can not be entirely due to the economy. If it is then why isn't Ford maintaining higher sales by taking sales from Toyota and Dodge? I know enough that the F150 is not only more important than Mercury, it is more important than all of Lincoln, the Taurus or even the Mustang. The Ford F150 is iconic and a major money maker. It is also a fundamental product. Sort of like milk and eggs to a grocer.

 

 

 

Edited June 5, 2010 by LM4EVR

[mettech]

Mercury offered an option to buy a Ford with a different look. In the past, I have taken advantage of that and will miss Mercury in the future.

[akirby]

Did you know that business analysts have done calculations and did determine the optimum number of brands for a most successful auto company, and the answer is three?

 

I guess they forgot to tell Nissan and Honda and if they told Toyota they must not have listened very well because Scion is not a success.

 

I guess they forgot to tell MB and BMW that you can't succeed with only one brand.

 

If having a low end and high end brand with another brand in between was a good idea then there would be more new companies doing that. They aren't and that's all the proof you need. Surely some new company would take advantage of all those smart "business analysts".

[PowerbyFord]

I don't think Mercury has been relevant for a long long time now - I'm talking decades. MBAs watered Mercury down until it was little more than a trim level. Who needs an entire division for that? All it did was create a resource drain on Ford. GM learned its lesson with all the badge engineered brands it had. Perhaps when the times were such that it was just the Big 3 turf warring it made sense but no longer. Ford needs to focus and without Mercury, that's just more resources they can devote to being more competitive with the brand. One hopes though that they resist making Lincoln into another Mercury and being little more than a trim level. The MKZ was worrisome and the LT as well. Don't get me wrong, Mercury dying was a shame and definitely indicative of how tough the competition is getting. That said though, Mercury existing as this ghostly shadow of itself wasn't a good thing either. I think of it in terms of the Rolling Stones: retire before you become a joke of your former self.

[akirby]

I don't think Mercury has been relevant for a long long time now - I'm talking decades. MBAs watered Mercury down until it was little more than a trim level. Who needs an entire division for that? All it did was create a resource drain on Ford. GM learned its lesson with all the badge engineered brands it had. Perhaps when the times were such that it was just the Big 3 turf warring it made sense but no longer. Ford needs to focus and without Mercury, that's just more resources they can devote to being more competitive with the brand. One hopes though that they resist making Lincoln into another Mercury and being little more than a trim level. The MKZ was worrisome and the LT as well. Don't get me wrong, Mercury dying was a shame and definitely indicative of how tough the competition is getting. That said though, Mercury existing as this ghostly shadow of itself wasn't a good thing either. I think of it in terms of the Rolling Stones: retire before you become a joke of your former self.

 

I still believe the Mark LT was only created to help the dealers after the loss of the Continental, LS, Cougar and Villager. If nothing else killing Mercury will fix the dealer problem so that Ford doesn't have to subsidize them. They'll either be healthy stand alone Lincoln shops or F/L combined.

[syrtran]

I guess they forgot to tell Nissan and Honda and if they told Toyota they must not have listened very well because Scion is not a success.

 

I guess they forgot to tell MB and BMW that you can't succeed with only one brand.

 

If having a low end and high end brand with another brand in between was a good idea then there would be more new companies doing that. They aren't and that's all the proof you need. Surely some new company would take advantage of all those smart "business analysts".

You might want to revise your second line, there.

 

BMW AG has three brands:

BMW

Mini

Rolls Royce

 

plus, they make BMW and Husqvarna motorcycles.

 

With that, Honda makes cars under two brands, motorcycles, lawn power equipment, and has started a jet manufacturing company - and let's not forget ASIMO, even though you can't buy it.

[akirby]

You might want to revise your second line, there.

 

BMW AG has three brands:

BMW

Mini

Rolls Royce

 

plus, they make BMW and Husqvarna motorcycles.

 

With that, Honda makes cars under two brands, motorcycles, lawn power equipment, and has started a jet manufacturing company - and let's not forget ASIMO, even though you can't buy it.

 

BMW was successful before it bought Mini and the argument wasn't about just the number of brands. You can certainly have multiple brands if they're doing totally different things. But none of these other companies have chosen to put a middle brand in between their full line entry level and luxury brands like has been suggested for Mercury.

 

The only argument for keeping Mercury is an emotional one.

[silvrsvt]

Mark Fields Way Forward plan was announced in December 2005. The recession did not begin until December 2007. Obviously the company was in serious trouble years before the market drop.

 

 

Ford has been a basket case since the 1990's or so...what is planned in 1995 affects you in 2000 in the automobile business...thats quite obvious with the way the whole Ford passenger car program was treated with SUV's and Trucks making stupid sales and profits at the time...the management at the time was living in the moment, not planning for the future.

 

As for your F-series sales argument is rather disingenuous...gas prices where right around a whopping $2 bucks a gallon in 2004, then spiked to $4 bucks a gallon in 2008, then are currently at about $2.50 to $2.75 a gallon in my area....with that huge price increase over the past 6 years and it settling back down to an "affordable" level..people are going to think twice about buying a big gas guzzler like a truck. Then add in the housing bust and the rest of the economy, well you have your answer about why sales are so bad vs back then.

 

 

 

 

[blksn8k2]

As that sage philosopher Charlie Brown would say...good grief. Most of you guys are missing the original poster's point. He is not arguing for the retention of Mercury or any other nameplate. What he is trying to point out is that we as a country have squandered our future by failing to support the very industry that arguably built this country into the most influential nation on Earth and the death of Mercury is just more proof of that fact.

[syrtran]

BMW was successful before it bought Mini and the argument wasn't about just the number of brands. You can certainly have multiple brands if they're doing totally different things. But none of these other companies have chosen to put a middle brand in between their full line entry level and luxury brands like has been suggested for Mercury.

I don't really disagree, I was just being pedantic. I probably should've used a smiley.

 

(And the general perception of Acura seems to be that it's already a mid-level brand with extremely, shall we say, "controversial" styling).

 

The only argument for keeping Mercury is an emotional one.

True. Some of us are very emotional about Mercury being continually starved of new product for over a decade, then having "dad" tell us that the plug is being pulled 'cause it's just skin-and-bones. We feel cheated by a series of possibly bone-headed decisions that should've gone a different way.

 

Lincoln isn't going to gain anything from the death of Mercury except for more money for advertising (and a little showroom space). The money saved from not slapping different taillights on a Fusion is certainly not going to pay for a new Lincoln-specific skin on the MKZ. The people who bought a Milan or Sable because they couldn't afford an MKZ or MKS still can't afford the MKZ or MKS. Those are sales that could just as easily go to Buick or Nissan rather than Ford.

 

And I have to add this somewhere: In the press release, it was stated that future Lincolns could get "sportier" handling. Well, there isn't anything stopping them from doing that. If they want sportier Lincolns, it's ridiculous that right now one can buy a Fusion that out-handles the MKZ for some $7K less - when they share the same suspension components.

[NickF1011]

Mark Fields Way Forward plan was announced in December 2005. The recession did not begin until December 2007. Obviously the company was in serious trouble years before the market drop.

 

Yes, they were in serious trouble. They had far too much excess capacity, even in 2005. They were over-producing and then deeply discounting and fleet dumping just to keep factories that weren't needed running. That's not how you run a profitable business. Capacity was cut to demand. It's not like Ford is suddenly in need of 10 more assembly lines to make up for the droves of people lined up waiting for new vehicles.

 

And yes, Ford is on much more stable ground now than they were prior. They are now profitable for one. They are gaining market share for the first time in over a decade. Their quality is now amongst the best in the industry. Their image has improved. I'm not sure what more you want from them. More over-production and huge incentives that kill resale value (which has also improved dramatically) just for the sake of keeping an unnecessary plant running?

[grbeck]

I would file the bad quality 75% under the poor corporate policy side and 25% under the economic policy side of my assertion. The 25% goes to strong unions domestically and open trade barriers internationally in the economic policy side of things. However, US manufacturing continues to erode as the shift to China/India, etc.

 

I'm baffled as to how allowing foreign companies to sell cars in this country caused quality problems for the domestics. The simple fact is that the domestics have had problems with quality control periodically since the 1950s, when GM, Ford, Chrysler and AMC controlled 90+ percent of the market. American quality fell off a cliff in 1957-58, got better in 1959, continued improving through 1964, and then began declining again after 1965. There were some bright spots in the late 1960s and 1970s (Oldsmobiles and Buicks were pretty good - in some ways, better than the Cadillacs - and Lincolns were good, too), but it was pretty much a downhill slide for the domestics until it reached crisis levels in the late 1970s.

 

Read the old Popular Mechanics Owners Reports from the 1950s and 1960s to get an idea of the problems that people experienced with their brand-new cars.

 

At the most, the imports - primarily the Japanese imports, as the European cars were quite hit-and-miss when it came to reliability, too - showed Americans that they didn't have to take a chance with substandard assembly and hit-and-miss reliability when buying a new car.

[akirby]

True. Some of us are very emotional about Mercury being continually starved of new product for over a decade, then having "dad" tell us that the plug is being pulled 'cause it's just skin-and-bones. We feel cheated by a series of possibly bone-headed decisions that should've gone a different way.

 

I understand that Mercury fans view it that way, but looking at it objectively I don't believe the plug was pulled due to poor sales because that could have been fixed with new models now that Ford is making money again.

 

I think it was a case of Ford deciding to give Ford buyers more options (more models, more features, higher end versions) and making sure that Ford was as strong as it could possibly be without any artificial influence from other brands due to marketing, etc. And deciding that Lincoln was needed to compete in the higher end of the market.

 

Once you lay out the business and product plans for Ford and Lincoln, there just isn't enough left to justify keeping a middle brand like Mercury. Will they lose some sales to Mercury lovers? Probably. Will they make it up on higher end Fords and Lincolns and lower costs? I think so, otherwise they wouldn't be doing it.

[silvrsvt]

What he is trying to point out is that we as a country have squandered our future by failing to support the very industry that arguably built this country into the most influential nation on Earth and the death of Mercury is just more proof of that fact.

 

 

So we are supposed to support crap just because its OUR crap?

 

 

 

 

[akirby]

I'm baffled as to how allowing foreign companies to sell cars in this country caused quality problems for the domestics. The simple fact is that the domestics have had problems with quality control periodically since the 1950s, when GM, Ford, Chrysler and AMC controlled 90+ percent of the market. American quality fell off a cliff in 1957-58, got better in 1959, continued improving through 1964, and then began declining again after 1965. There were some bright spots in the late 1960s and 1970s (Oldsmobiles and Buicks were pretty good - in some ways, better than the Cadillacs - and Lincolns were good, too), but it was pretty much a downhill slide for the domestics until it reached crisis levels in the late 1970s.

 

Read the old Popular Mechanics Owners Reports from the 1950s and 1960s to get an idea of the problems that people experienced with their brand-new cars.

 

At the most, the imports - primarily the Japanese imports, as the European cars were quite hit-and-miss when it came to reliability, too - showed Americans that they didn't have to take a chance with substandard assembly and hit-and-miss reliability when buying a new car.

 

Detroit was built around a closed market where all of the companies operated with the same baggage. Union rules, higher wages, etc. It didn't matter as long as all 3 mfrs were equally disadvantaged. The imports came in without all of that baggage and simply started making better products with lower prices. Detroit refused to change for a long time. Had they made the drastic changes necessary back in the 80s or even 90s they would probably be enjoying much higher market share today and the imports would have much less.

 

Management was unwilling to give up their empires and the workers were unwilling to hop off the gravy train and they ended up driving 2 of them into bankruptcy and only a smart hail mary business decision saved the 3rd.

 

We didn't lose the auto manufacturing business. It just moved out of Detroit and into the South. It's not like the imports are paying peasant wages or they're using child labor.

[akirby]

So we are supposed to support crap just because its OUR crap?

 

Apparently.

[Chester]

You might want to revise your second line, there.

 

BMW AG has three brands:

BMW

Mini

Rolls Royce

 

plus, they make BMW and Husqvarna motorcycles.

 

With that, Honda makes cars under two brands, motorcycles, lawn power equipment, and has started a jet manufacturing company - and let's not forget ASIMO, even though you can't buy it.

 

 

I guess Ford could buy out New Holland, and start slapping their name on the side of a tractor again. Ehh. I hope they stick to building cars, and good ones at that.

 

What I hope they do though, is develop their engine producing capacity and start selling their engines to other companies. Would be nice to see a demand for Ford engines in other industries. 2 6.7 liter ford diesel engines for a yacht etc.

[Kev-Mo]

So we are supposed to support crap just because its OUR crap?

 

 

And - what do you do for a living? I am sure - as YOU noted- it is crap, so I will avoid allowing any of my dollars to go your way.

[NickF1011]

And - what do you do for a living? I am sure - as YOU noted- it is crap, so I will avoid allowing any of my dollars to go your way.

 

Think you're missing the point.

 

Not everything made in America is crap. Far from it. But should we buy the American-made product if it worse than the foreign-built product just because it is built here? That's ludicrous. However, that's where the domestic auto industry was from the better part of 1980-2005.