Jump to content

Debate: Did Ford pull the plug on Mercury prematurely?


Did Ford pull the plug on Mercury prematurely?  

111 members have voted

  1. 1. Did Ford pull the plug on Mercury prematurely?

    • Yes
      47
    • No
      54
    • Neutral
      10


Recommended Posts

I see it as sort of a chicken & the egg kind of thing. Some say Ford should have waited until Lincoln was stronger before axing Mercury. Others suggest that Lincoln wouldn't get strong as quickly as long as Mercury still existed. I'm more in the second camp. With fewer distractions, Ford Motor Company doesn't need to waste any resources at all "gussying up" Ford-branded vehicles for Mercury and can instead put all of that focus on 1. keeping Ford's vehicles up to date and 2. breaking new ground at Lincoln.

 

(Side note: I find myself almost always automatically capitalizing "focus" when I type it now because of these forums. :lol: )

 

Couldn't agree more!

Another benefit should be an impovement in effiency and QUALITY at all assembly plants that currently produce all three makes. One less grill, tail-light and complete interior to install. Way less complex, less distractions.

I could only imagine the design studios will benefit greatly with a free hand to express Ford models.

Link to comment
Share on other sites

The more I think about this, the more I'm convinced that the decision to kill Mercury NOW was done to accelerate the dealer consolidations/closings. There are obviously too many dealers to support the new anticipated L/M volume. Otherwise, they could have left Mercury alone with the Milan and Mariner for another year or two.

 

 

I think your right on the money...plus the amount of dealers they need to chop that are independent L-M dealers won't cost FMC that much to close out there.

 

 

 

Link to comment
Share on other sites

One thing is certain, if you are a Lincoln/Mercury dealer you are screwed.

When the last Mercury rolls off the lot it's all or nothing with Lincoln and frankly their volume simply isn't there.

That means each one sold will have to hold the highest possible profit so look for Lincoln to increase in that regard. Question is will it be enough to keep the Lincoln dealers (high overhead) doors open. Or will those dealers pick up a cheap volume import to sell so they can pay the bills.

 

In my view, the LM dealers that survive in Metro Detroit will do so only by selling more used cars and doing more service. God knows, they aren't going to survive selling a few MKS's and a little more overly priced MKZ's. Ford made a big mistake IMO ending Mercury so soon. They should have kept the Milan and Mariner around until Escape and Fusion went to new platforms. In this way, LM dealers could hang in until more Lincoln product comes to the rescue. As time goes by, I disagree more and more with Mulally's decisions or whoever makes them.

Link to comment
Share on other sites

The more I think about this, the more I'm convinced that the decision to kill Mercury NOW was done to accelerate the dealer consolidations/closings. There are obviously too many dealers to support the new anticipated L/M volume. Otherwise, they could have left Mercury alone with the Milan and Mariner for another year or two.

 

I also think this plays into the new product developments. Now they don't have to spend anything on a new Tracer, Mariner or Milan.

 

I guarantee there is a much bigger and well thought out picture here that we aren't privy to and killing Mercury now gets them to the end goal quicker.

 

What would it have hurt to let Milan and Mariner stick around in present form? Fusion and Escape will not change until they go to new platform that is not very far away now. Ford designers wouldn't have had to do anything but maybe change the color schemes a couple times. Ford will also have two less hybrids to sell or brag about like they do. I have no problem with Ford ending Mercury, just with ending them in a few months. You are right....I don't see the reason for doing it so abruptly other than getting rid of a bunch of loyal dealers which is not a good reason in my book. I'm upset with the way Chrysler treated their dealers. I guess at least Ford is paying off their dealers which is better than nothing. If I were a LM dealer, I wouldn't stick around to see what Ford does with Lincoln which is years down the road. Get out now.

Link to comment
Share on other sites

Mullaly doesn't get brands. At Boeing every thing is a Boeing. At Ford you had all these brands... what does it mean? He sure couldn't answer the question.

 

I can tell that there hasn't been much board room level experience here. Here is how minor brands die.

 

During line reviews, each brand presents its product plan, the revenue projection, and pleads for the budget to bring the plan to fruition.

 

All it takes to turn off the lights for the little guy is for one person in the room to say: "but if we developed the same product, and put Ford on the hood, it would generate so much more revenue". Now you have to know that the person that is making the statement has no intention of actually executing the plan, only pointing out that Big Brand can get a bigger return than Small Brand for the same dollar. To understand the process you have to fully get this one salient point: big brand doesn't have to replace the sales of small brand, only to point out how much more efficient they are. So killing Small Brand has no downside on Big Brand. They don't get tasked with replacing the sales. But there is an upside, they don't have to fight over the meat on the table.

 

Now the board members will jump on the idea that Big Brand is money better invested. Why, the difference in return on investment is obvious.! This is bottom line myopia; since the bottom line looks so clear, why worry about the top line? So the decision is made to "focus on the core of the business". They exit the non-core business units. Basically it means the board forgot why the Small Brand came into existence in the first place.

 

Small brands exist because no matter how good your hamburgers are, sooner or later the customer is all hamburgered out. So they decide to give pizza a try. Now you can claim that your Pizza Flavored Hamburgers are all that, but eventually somebody else is going to start converting your Burger eaters into Pizza lovers. And a funny thing happens when you try to be all things under one brand: Rather than being good at what you know, you become know for being mediocre at doing things you are not good at. Would you order a pizza at McDonalds? So Ford selling Ford Platinum Plus vehicles will really bring new meaning to putting lipstick on the pig. This is why Toyota has Lexus, and Scion.

Edited by xr7g428
Link to comment
Share on other sites

What would it have hurt to let Milan and Mariner stick around in present form? Fusion and Escape will not change until they go to new platform that is not very far away now. Ford designers wouldn't have had to do anything but maybe change the color schemes a couple times. Ford will also have two less hybrids to sell or brag about like they do. I have no problem with Ford ending Mercury, just with ending them in a few months. You are right....I don't see the reason for doing it so abruptly other than getting rid of a bunch of loyal dealers which is not a good reason in my book. I'm upset with the way Chrysler treated their dealers. I guess at least Ford is paying off their dealers which is better than nothing. If I were a LM dealer, I wouldn't stick around to see what Ford does with Lincoln which is years down the road. Get out now.

imho "They" had to kill Merc while "They" could get away with it

 

![/b]!June 2010 - 07:18 AM' timestamp='1276611505' post='621264']

...I guarantee there is a much bigger and well thought out picture here that we aren't privy to and killing Mercury now gets them to the end goal quicker.

[broken record]

imho the BIG picture is avoiding (a) lawsuit(s) - pure & simple

the asshole faction got Merc worn down to a nub (that still outsells Lincoln)

but

IF "They" waited until next year, the Merc C-car would DOUBLE Merc's sales

and then "They" couldn't kill Mercury without an open'n'shut case by the dealers

...which would also be true if FoMoCo all of a sudden said they just weren't going to build the little Merc

((personally, I believe the dealers have 10 years worth of evidence that FoMoCo has deliberately killed their business as it is))

Edited by 2b2
Link to comment
Share on other sites

Don't you just love idiots who think they know more than the CEO, Board of Directors, Chairman of the board and the rest of the Ford management team?

 

Especially after Ford has already proven that they know what they're doing.

 

We don't know exactly what Ford has in mind, but I guarantee you there is a well thought out plan. This team is too good to do something totally stupid.

Link to comment
Share on other sites

Mullaly doesn't get brands. At Boeing every thing is a Boeing.

Maybe not. He owned a Lexus 4-something top-of-line 4-door, and he understands Toyota.

 

I say that Ford could not afford to do anything but badge-engineer the Mercury brand, which wasn't doing a lot for the brand. In the 60's, the Comet was a 2" or so stretch on the Falcon floorpan and a totally different top hat.

 

In the 50's, the Full-size Merc was a different piece of engineering. The Big "M" of the Sullivan Show ads.

 

Unfortunately, today, Ford can only afford to do that with 2 brands: Ford, and Lincoln — and Troller! :)

Link to comment
Share on other sites

Don't you just love idiots who think they know more than the CEO, Board of Directors, Chairman of the board and the rest of the Ford management team?

 

Especially after Ford has already proven that they know what they're doing.

No one here is claiming they know more. This is an opinion poll.

 

And, um, idiots? Are we feeling a little grumpy today?

 

We don't know exactly what Ford has in mind, but I guarantee you there is a well thought out plan. This team is too good to do something totally stupid.

You may be right, but I think it's a lousy plan to tell the dealers they're getting a new C-class Mercury called Tracer and then spin them around 4 months later and tell them "Gotcha! - we're really getting rid of Mercury altogether." It doesn't bode well when a manufacturer lies to their dealers.

Link to comment
Share on other sites

There are factors here that many of us are unaware of, such as operating costs, profit margins, ad budgets, and general long-term investment and planning. The later is certainly speculative and requires more human decision making, but a good CEO draws from experience and reasonable data along with a company vision and mission statement. Since 2006, Ford has been a fairly by-the-numbers company with an occassionally irrational decision making here and there (Flex, Taurus fixation, etc.) Of course, decisiosns are only 'irrational' if they fail.

 

Ford has also said that the only brand that matters to them is Ford, which has always reminded me that Lincoln's future isn't very secure. At this point, I'm convinced that Lincoln doesn't have a strong future either and Ford's lack of real commitment to a brand outside of "Ford" signifies to me that they are preparing for a future without them. So my bold prediction is that Lincoln will be out by 2016, they simply can't continue this way and expect to survive.

Link to comment
Share on other sites

Since 2006, Ford has been a fairly by-the-numbers company with an occassionally irrational decision making here and there (Flex, Taurus fixation, etc.) Of course, decisiosns are only 'irrational' if they fail.

 

Flex and Taurus were perfectly rational decisions, regardless of how successful they are. It didn't make sense for Ford to pursue the highly competitive but shrinking minivan market at the time. The Flex is selling ok with high transaction prices. It's not a home run but it's a solid double.

 

As for Taurus - Mulally was right. Why would you throw away all that brand name recognition just to try and build it up again on a totally new name? And I haven't heard anyone associating the new Taurus with the fleet queen.

 

Ford has also said that the only brand that matters to them is Ford, which has always reminded me that Lincoln's future isn't very secure. At this point, I'm convinced that Lincoln doesn't have a strong future either and Ford's lack of real commitment to a brand outside of "Ford" signifies to me that they are preparing for a future without them. So my bold prediction is that Lincoln will be out by 2016, they simply can't continue this way and expect to survive.

 

That is NOT what they said. They said Ford came first, then Lincoln, then Mercury. The lack of commitment to Lincoln over the last 3 years was on purpose (fix Ford first). The plan that was just announced is their new commitment to Lincoln, now that Ford's repair is almost complete.

 

This is how you operate with resource limitations. If they really wanted to get rid of Lincoln they wouldn't be giving it new stuff.

 

 

Why is this so hard for people to comprehend? Fix Ford first (almost done), then fix Lincoln (just started).

Link to comment
Share on other sites

You may be right, but I think it's a lousy plan to tell the dealers they're getting a new C-class Mercury called Tracer and then spin them around 4 months later and tell them "Gotcha! - we're really getting rid of Mercury altogether." It doesn't bode well when a manufacturer lies to their dealers.

 

You must not understand how these types of decisions are made. It was business as usual for Mercury for everyone - dealers, Ford employees, etc. The employees working on the Tracer were just as surprised as everyone else.

 

This was a change in plans made at the highest level. It happens all the time. It wasn't a bait and switch - they changed their mind and decided to pursue another business direction.

Link to comment
Share on other sites

So my bold prediction is that Lincoln will be out by 2016, they simply can't continue this way and expect to survive.

 

Why is that? That would be downright stupid to do...if anything Lincoln should be flourishing by the time 2016 rolls around...just look at what Ford has done since the dark ages of 2005 to now.

Link to comment
Share on other sites

Don't you just love idiots who think they know more than the CEO, Board of Directors, Chairman of the board and the rest of the Ford management team?

 

Especially after Ford has already proven that they know what they're doing.

 

We don't know exactly what Ford has in mind, but I guarantee you there is a well thought out plan. This team is too good to do something totally stupid.

 

So getting rid of Ranger, Sport Trac, and Town Car with no announced replacements is well thought out plan? I may be a dumb amateur, but somehow I see a market for a small pickup with much more stringent CAFE rules coming and a luxury RWD vehicle. Especially a small pickup with the built up name recognition of RANGER and a luxury car named the TOWN CAR. It's not their fault that Ford let both die on the vine. I understand that Ford can't do everything and needs to narrow its focus with limited resources, but to give up markets it was so strong in not that long ago is frustrating to say the least.

Link to comment
Share on other sites

So getting rid of Ranger, Sport Trac, and Town Car with no announced replacements is well thought out plan? I may be a dumb amateur, but somehow I see a market for a small pickup with much more stringent CAFE rules coming and a luxury RWD vehicle. Especially a small pickup with the built up name recognition of RANGER and a luxury car named the TOWN CAR. It's not their fault that Ford let both die on the vine. I understand that Ford can't do everything and needs to narrow its focus with limited resources, but to give up markets it was so strong in not that long ago is frustrating to say the least.

 

The Ranger I will agree on. Ford needs a modern small pickup.

 

Sport Trac? Pssh. They don't sell. No loss.

 

Town Car? Yeah, it's a recognized name alright -- as an "upscale" taxi you see at the airport.

Link to comment
Share on other sites

Will they make cars that are capable of being sold outside the isolation of North America Nick?

 

Yet to be seen, but that's what I'm hoping. Now whether or not Europe will be included in that "outside North America" is another thing. I would expect to see them first in markets that are more easily penetrable like China and possibly Australia where larger vehicles are more accepted.

Link to comment
Share on other sites

The Ranger I will agree on. Ford needs a modern small pickup.

 

Last time I checked they still make a Ford ranger - selling over 6K/month in fact.

 

I don't think Ford will walk away from the Ranger - I just think that they haven't figured out how to do a replacement efficiently. Apparently the global ranger isn't suitable.

 

As for Town Car - it has a reputation but not one that Ford wants to perpetuate. It will not be missed.

Link to comment
Share on other sites

1700 LM dealers.

 

170,000 LM sales last year.

 

100 new car sales per year (8 per month) isn't going to keep the lights on. Dealers might gross $2k off a new car sale--IF they get the buyer to pick up an extended warranty or credit life/GAP. $16k per month isn't enough to keep a dealership open.

 

Granted, losing $9k of that stings---it's not good.

 

But don't kid yourself that Mercury is life/death for these dealers.

 

May 2010 sales stats:

Mercury: 9,128

Lincoln: 7,755

 

I don't know how those dealers are paying the bills now on those few sales combined much less after the higher volume Mercurys are gone.

 

7,755 split unevenly across 1,700 dealers!

 

So don't kid yourself it will be the death of many of them.

Link to comment
Share on other sites

don't kid yourself it will be the death of many of them.

 

Losing $16k/month gross = losing two to four employees.

 

I'm not saying that it's not going to affect dealers. But if losing $16k will absolutely bankrupt your dealership, it's on pretty shaky ground to begin with.

 

I have a client that lost his GM franchise. He'll be able to stay open, but he's had to dramatically scale back his operation and his budget, and I don't know how any dealer could possibly exist with a smaller footprint than what he's got now.

Link to comment
Share on other sites

You must not understand how these types of decisions are made. It was business as usual for Mercury for everyone - dealers, Ford employees, etc. The employees working on the Tracer were just as surprised as everyone else.

 

This was a change in plans made at the highest level. It happens all the time. It wasn't a bait and switch - they changed their mind and decided to pursue another business direction.

I understand that decisions like this aren't made at a company the size of Ford in less than 4 months unless:

 

1. There are several competing proposals, and the board was waiting to see how the "future projections" were going and weighing the proposals against that

 

or

 

2. It was a hard-and-fast decision made by someone very high up in the structure.

 

I was pointing out that Ford did not have a "well-thought-out" plan for Mercury. They were swaying in the breeze.

 

And, no, I didn't actually think Mr. Fields lied to the dealers. A company doesn't get to the point of presenting a plan to their sales force unless they're sure they're going forward with that plan.

 

It looks more to me like there was some kind of internal power struggle over Mercury, which smacks more of Trotman's Ford than Mullaly's. If this works and Lincoln survives without Mercury, then watch who gets promoted. If it turns out that Lincoln still needs to cut costs, then heads will roll.

Link to comment
Share on other sites

1...It looks more to me like there was some kind of internal power struggle over Mercury,

2...which smacks more of Trotman's Ford than Mullaly's.

3...If this works and Lincoln survives without Mercury, then watch who gets promoted.

4...If it turns out that Lincoln still needs to cut costs, then heads will roll.

1 my feeling too

2 imho the root of this evil goes back at least 10 years

3 interesting - good point

4 I hope that'll be LITERALLY

guillotine.gif

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...