Will Mercury Follow Plymouth and Oldsmobile?
02-10-2002, 11:26 AM
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Will Mercury Follow Plymouth and Oldsmobile?
Mercury team in overdrive
Executives determined to prove that brand can survive, thrive
February 8, 2002
BY JEFFREY MCCRACKEN
DETROIT FREE PRESS BUSINESS WRITER
CHICAGO -- Ford Motor Co. Chief Operating Officer Nick Scheele sounds a bit like Mark Twain (albeit with an English accent) when he says rumors of Mercury's death are greatly exaggerated.
"The patient isn't really dead, as originally reported," he says, laughing.
Brian Kelley, the new president of Lincoln-Mercury, utters a similar refrain.
So does the team of executives Ford has charged with giving a much-needed push to the staid Mercury brand. Kelley's team members, including Mercury product development director Susan Pacheco, design chief Darrell Behmer and brand manager Elena Ford, have labored to make the Chicago Auto Show a testament to their faith in Mercury.
This week they unveiled a Mercury Marauder concept convertible as well as a redesigned Grand Marquis. But their most crucial debut comes next month, when they will unveil to top Ford executives like Chairman William Clay Ford Jr.a plan for the future of the beleaguered Mercury brand.
That plan could decide whether there deserves to be a future at all.
"We -- me, Elena, Darrell -- are all here for a reason. We were put here for the purpose of delivering a long-term, compelling plan for Mercury. I'm confident we can do it,"said Pacheco, a Ford veteran of 18 years.
As proof, she and the others point to the six new vehicles Mercury will introduce during the next five years, including the Marauder and a redesigned Grand Marquis, both due this summer. Also expected is a replacement in 2003 or 2004 for the Villager, the minivan being eliminated this summer.
The four top Mercury executives point to their recent appointments as further evidence Ford is committed to ensuring a future for the 63-year-old brand. All were named to their jobs in the last few months.
Pacheco, Behmer and Elena Ford are charged with creating a long-term plan by mid-March. They are to bring it to Kelley -- and then he to his superiors. The plan is supposed to define Mercury's customer base, product-development future and design vision.
Brand uncertainty
Wall Street auto analysts and product insiders wonder why Ford is bothering. They ask how long the automaker, coming off a $5.45-billion loss in 2001, will pour money into a brand with dwindling sales, falling customer loyalty and increasing reliance on rental-car companies for sales. Mercury's share of the U.S. market was 1.7 percent in 2001, less than half of what it was in 1993.
Ford insiders say the Lincoln-Mercury division lost nearly $1 billion last year. Within Ford, many employees view the pending March plan as Mercury's last gasp.
Couple that with uncertainty about where Mercury fits at Ford -- whether it is luxury enough to be part of the Premier Automotive Group with the likes of Jaguar, Land Rover and Lincoln -- and a number of Ford followers question the wisdom of putting more resources into Mercury. It's a brand, they say, that should rest in peace with Plymouth at the Chrysler Group and Oldsmobile at General Motors Corp.
"My view is that Ford should spend more of its money on the Ford brand and Premier brands like Volvo or Lincoln. If they took whatever they'd spend in a year on Mercury, let's say it's $300 million, if that went to Volvo, it would blossom. Mercury won't," said Scott Hill, auto analyst for Sanford Bernstein & Co. in New York. "And it's not like Ford has unlimited capital at this particular moment."
Indeed, the automaker is attempting to cut $9 billion in annual spending via a plan that will eliminate 21,500 jobs in North America and kill four products, including the Mercury Cougar and Villager. In late January, top executives like Scheele took to the road to help Ford raise $4.5 billion in the equity market for a cash infusion.
"Mercury people keep telling me they are going to do a better job with the brand," Hill said. "But that's not going to cut it. They need to create something new and relevant. Consumers don't even think about Mercury when they are out there shopping."
He cites a Decemberstudy by CNW Marketing Research of Bandon, Ore. CNW found only 9.4 percent of consumers consider Mercury when vehicle shopping, compared to 51.3 percent in 1980 and 34.2 percent in 1990. In the all-important youth market, just 2.6 percent consider Mercury as a potential purchase, compared to 26.4 percent in 1980.
Kelley and other Mercury executives support their case for the brand's relevance with a kind of connect-the-dots argument: If you believe the Premier Automotive Group is important to Ford (which it is), and believe Lincoln is important to that group (which it is), then Mercury must survive because it's important to Lincoln and the 1,200 U.S. Lincoln-Mercury dealers.
"Listen, Mercury and Lincoln fit together. Without one, there isn't the other," said Elena Ford, a fifth-generation member of the Ford family. "Mercury fits as the near-luxury segment entry to Lincoln. It's tied to Lincoln that way. If Lincoln is going to be an important part of the Premier Automotive Group, then Mercury is part of that group because it's so important to Lincoln."
A checkered history
Mercury was launched in 1939 by Edsel Ford, son of founder Henry Ford. The idea was to create a luxury brand halfway between the entry-level or mainstream Ford division and the more expensive Lincoln cars.
By 1945 it became part of the Lincoln-Mercury division.
Through the years Mercury has had such hits as the Comet, Cougar, Sable and Grand Marquis.
Nonetheless, the brand is still viewed as being a bit all over the map. Perhaps nothing better reflects its split personality than this: One of the brand's high points came in 1955 when James Dean drove the 1949 Mercury Series 9CM in "Rebel Without a Cause," yet its longest-running, best-selling car ever, with 2.7 million units sold, is the grandfatherly Grand Marquis.
"Mercury does have a bit of muddy past," Kelley said.
This makes Behmer's job challenging. As the first dedicated chief designerfor Mercury in four decades, he must create a so-called design DNA for Mercury, deciding what design threads should tie all of Mercury together.
The design history has "a checkered past that kind of goes all over the place," said Behmer, in place for two weeks. His 19-year career at Ford includes designing the 2003 Lincoln Town Car, 1994 Mustang and 1992 Taurus. "I need to decide what there is from the past we need to bring back."
By the 2003 Detroit auto show, Behmer said, he and his team will unveil a concept vehicle he can hold up to Ford executives and consumers as the future of Mercury.
Fitting in
Mercury's murkiness bolsters the argument from analysts like Hill that the brand doesn't quite fit anywhere at Ford.
"It's in nowheresville. It should be part of the Ford brand, but they won't put it there. They say it's part of PAG, but it's not a luxury brand."
Hill said Mercury won't get attention from Premier Automotive Group leader Wolfgang Reitzle "because it doesn't deserve to and it will eventually die. They'll spend a lot of money, but in five years it will probably be where Olds was when GM killed it, lots of good product, but no audience."
He estimates Ford could save 9 cents a share -- roughly $175 million a year -- if Mercury dies.
To overcome the skepticism and apparent consumer disinterest -- Mercury sold a little more than 311,000 cars and trucksin 2001, down 13.2 percent from 2000 and 29 percent from 1999 -- the brand will have to create products people want and a smart way to sell them. That job will fall to Pacheco and Ford. They will be in charge of determining Mercury's product plan, how to market that product and to whom.
Auto insiders say that besides the Maurauder, Grand Marquis and a new minivan that may be called the Mariner, three vehicles are on the drawing board: a crossover vehicle to be built at the Chicago assembly plant along with a similar Ford product; a midsize premium sedan that will compete with products like the Volkswagen Passat, and a smaller sportier sedan that will be based off the Mazda 6 and built at the Flat Rock assembly plant.
Kelley will not confirm what's coming from Mercury, but adds: "Six new products in five years should shut people up about our future."
What would silence the critics, of course, would be a profitable Mercury with rising sales. Kelley won't say how Mercury did last year, but said during the last 20 years it's made Ford lots of money.
It helps Mercury's business case that many of its products -- like the Taurus-twin Sable -- borrow heavily from Ford platforms, limiting the amount spent to make a Mercury.
"That's the big difference between Mercury and Olds," said Nick Twork, product analyst with AutoPacific Inc., a Southfield-based auto-marketing consulting firm. "Mercury has made Ford money, especially the Grand Marquis. Besides, it took GM over 20 years to ruin Oldsmobile. Ford is catching the fall at Mercury after just two bad years, and that's pretty early."
Executives determined to prove that brand can survive, thrive
February 8, 2002
BY JEFFREY MCCRACKEN
DETROIT FREE PRESS BUSINESS WRITER
CHICAGO -- Ford Motor Co. Chief Operating Officer Nick Scheele sounds a bit like Mark Twain (albeit with an English accent) when he says rumors of Mercury's death are greatly exaggerated.
"The patient isn't really dead, as originally reported," he says, laughing.
Brian Kelley, the new president of Lincoln-Mercury, utters a similar refrain.
So does the team of executives Ford has charged with giving a much-needed push to the staid Mercury brand. Kelley's team members, including Mercury product development director Susan Pacheco, design chief Darrell Behmer and brand manager Elena Ford, have labored to make the Chicago Auto Show a testament to their faith in Mercury.
This week they unveiled a Mercury Marauder concept convertible as well as a redesigned Grand Marquis. But their most crucial debut comes next month, when they will unveil to top Ford executives like Chairman William Clay Ford Jr.a plan for the future of the beleaguered Mercury brand.
That plan could decide whether there deserves to be a future at all.
"We -- me, Elena, Darrell -- are all here for a reason. We were put here for the purpose of delivering a long-term, compelling plan for Mercury. I'm confident we can do it,"said Pacheco, a Ford veteran of 18 years.
As proof, she and the others point to the six new vehicles Mercury will introduce during the next five years, including the Marauder and a redesigned Grand Marquis, both due this summer. Also expected is a replacement in 2003 or 2004 for the Villager, the minivan being eliminated this summer.
The four top Mercury executives point to their recent appointments as further evidence Ford is committed to ensuring a future for the 63-year-old brand. All were named to their jobs in the last few months.
Pacheco, Behmer and Elena Ford are charged with creating a long-term plan by mid-March. They are to bring it to Kelley -- and then he to his superiors. The plan is supposed to define Mercury's customer base, product-development future and design vision.
Brand uncertainty
Wall Street auto analysts and product insiders wonder why Ford is bothering. They ask how long the automaker, coming off a $5.45-billion loss in 2001, will pour money into a brand with dwindling sales, falling customer loyalty and increasing reliance on rental-car companies for sales. Mercury's share of the U.S. market was 1.7 percent in 2001, less than half of what it was in 1993.
Ford insiders say the Lincoln-Mercury division lost nearly $1 billion last year. Within Ford, many employees view the pending March plan as Mercury's last gasp.
Couple that with uncertainty about where Mercury fits at Ford -- whether it is luxury enough to be part of the Premier Automotive Group with the likes of Jaguar, Land Rover and Lincoln -- and a number of Ford followers question the wisdom of putting more resources into Mercury. It's a brand, they say, that should rest in peace with Plymouth at the Chrysler Group and Oldsmobile at General Motors Corp.
"My view is that Ford should spend more of its money on the Ford brand and Premier brands like Volvo or Lincoln. If they took whatever they'd spend in a year on Mercury, let's say it's $300 million, if that went to Volvo, it would blossom. Mercury won't," said Scott Hill, auto analyst for Sanford Bernstein & Co. in New York. "And it's not like Ford has unlimited capital at this particular moment."
Indeed, the automaker is attempting to cut $9 billion in annual spending via a plan that will eliminate 21,500 jobs in North America and kill four products, including the Mercury Cougar and Villager. In late January, top executives like Scheele took to the road to help Ford raise $4.5 billion in the equity market for a cash infusion.
"Mercury people keep telling me they are going to do a better job with the brand," Hill said. "But that's not going to cut it. They need to create something new and relevant. Consumers don't even think about Mercury when they are out there shopping."
He cites a Decemberstudy by CNW Marketing Research of Bandon, Ore. CNW found only 9.4 percent of consumers consider Mercury when vehicle shopping, compared to 51.3 percent in 1980 and 34.2 percent in 1990. In the all-important youth market, just 2.6 percent consider Mercury as a potential purchase, compared to 26.4 percent in 1980.
Kelley and other Mercury executives support their case for the brand's relevance with a kind of connect-the-dots argument: If you believe the Premier Automotive Group is important to Ford (which it is), and believe Lincoln is important to that group (which it is), then Mercury must survive because it's important to Lincoln and the 1,200 U.S. Lincoln-Mercury dealers.
"Listen, Mercury and Lincoln fit together. Without one, there isn't the other," said Elena Ford, a fifth-generation member of the Ford family. "Mercury fits as the near-luxury segment entry to Lincoln. It's tied to Lincoln that way. If Lincoln is going to be an important part of the Premier Automotive Group, then Mercury is part of that group because it's so important to Lincoln."
A checkered history
Mercury was launched in 1939 by Edsel Ford, son of founder Henry Ford. The idea was to create a luxury brand halfway between the entry-level or mainstream Ford division and the more expensive Lincoln cars.
By 1945 it became part of the Lincoln-Mercury division.
Through the years Mercury has had such hits as the Comet, Cougar, Sable and Grand Marquis.
Nonetheless, the brand is still viewed as being a bit all over the map. Perhaps nothing better reflects its split personality than this: One of the brand's high points came in 1955 when James Dean drove the 1949 Mercury Series 9CM in "Rebel Without a Cause," yet its longest-running, best-selling car ever, with 2.7 million units sold, is the grandfatherly Grand Marquis.
"Mercury does have a bit of muddy past," Kelley said.
This makes Behmer's job challenging. As the first dedicated chief designerfor Mercury in four decades, he must create a so-called design DNA for Mercury, deciding what design threads should tie all of Mercury together.
The design history has "a checkered past that kind of goes all over the place," said Behmer, in place for two weeks. His 19-year career at Ford includes designing the 2003 Lincoln Town Car, 1994 Mustang and 1992 Taurus. "I need to decide what there is from the past we need to bring back."
By the 2003 Detroit auto show, Behmer said, he and his team will unveil a concept vehicle he can hold up to Ford executives and consumers as the future of Mercury.
Fitting in
Mercury's murkiness bolsters the argument from analysts like Hill that the brand doesn't quite fit anywhere at Ford.
"It's in nowheresville. It should be part of the Ford brand, but they won't put it there. They say it's part of PAG, but it's not a luxury brand."
Hill said Mercury won't get attention from Premier Automotive Group leader Wolfgang Reitzle "because it doesn't deserve to and it will eventually die. They'll spend a lot of money, but in five years it will probably be where Olds was when GM killed it, lots of good product, but no audience."
He estimates Ford could save 9 cents a share -- roughly $175 million a year -- if Mercury dies.
To overcome the skepticism and apparent consumer disinterest -- Mercury sold a little more than 311,000 cars and trucksin 2001, down 13.2 percent from 2000 and 29 percent from 1999 -- the brand will have to create products people want and a smart way to sell them. That job will fall to Pacheco and Ford. They will be in charge of determining Mercury's product plan, how to market that product and to whom.
Auto insiders say that besides the Maurauder, Grand Marquis and a new minivan that may be called the Mariner, three vehicles are on the drawing board: a crossover vehicle to be built at the Chicago assembly plant along with a similar Ford product; a midsize premium sedan that will compete with products like the Volkswagen Passat, and a smaller sportier sedan that will be based off the Mazda 6 and built at the Flat Rock assembly plant.
Kelley will not confirm what's coming from Mercury, but adds: "Six new products in five years should shut people up about our future."
What would silence the critics, of course, would be a profitable Mercury with rising sales. Kelley won't say how Mercury did last year, but said during the last 20 years it's made Ford lots of money.
It helps Mercury's business case that many of its products -- like the Taurus-twin Sable -- borrow heavily from Ford platforms, limiting the amount spent to make a Mercury.
"That's the big difference between Mercury and Olds," said Nick Twork, product analyst with AutoPacific Inc., a Southfield-based auto-marketing consulting firm. "Mercury has made Ford money, especially the Grand Marquis. Besides, it took GM over 20 years to ruin Oldsmobile. Ford is catching the fall at Mercury after just two bad years, and that's pretty early."
02-10-2002, 06:40 PM
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Originally posted by airgate
To that I only say. . .I sure hope so!
[/b]
To that I only say. . .I sure hope so!
[/b]
Why Ford need Mercury anyway.
just keep Lincoln as the only luxury brand.
then the market will be more clear to them I think so.
02-11-2002, 04:21 AM
#5
After the chopped and channeled '49 Merc with Moon hubcaps it's been all down hill... But they still know about the brand at the assisted living centers.
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