Mercury Dealers Offered Compensation for Brand Closure

Mercury Dealers Offered Compensation for Brand Closure

In the wake of Ford‘s announcement that it is eliminating the Mercury brand after 72 years, existing franchises that peddle the division’s offerings – a total of 1,712 dealers in the U.S. (276 of which are exclusive Lincoln-Mercury stores), are being offered cash compensation. Production of all Mercury vehicles will end in the fourth quarter of this year, meaning that it’s likely there won’t be any 2011 models for dealers to sell.

Although, according to Ford, Mercury’s total market share stands at a 0.8 percent, some Mercury models, notably the old Grand Marquis were still highly profitable. According to Ford’s U.S. Sales Supremo; Ken Czubay, the dealer compensation package is based on a three year sales average of Mercury branded vehicles in relation to the percentage of total vehicle sales at each dealership.

“We feel the compensation we’re offering them is reasonable and fair,” said Mark Fields, Ford’s President of the Americas. “It goes beyond what the franchise agreements state and well beyond what our competitors have done in the marketplace.” Ford has also stated that on the parts side, it will let the existing Mercury franchises keep their parts inventory and pay 10 percent of the value on those parts. Therefore, if a dealer had invested $1 million in parts inventory, it gets to keep all those parts and Ford will issue a check for $100,000.

However some dealers feel they’ve gotten the short end of the stick. One, who’s been offered $200,000 based on sales his store generates through Mercury sales, says that it’s still not enough, especially considering he invested millions of dollars building a brand new showroom in the last three years. Another, who says he sells about 350 Mercury cars and trucks a year – generating $2 million in revenue, has been offered $500,000, but says that the compensation is not enough, considering the loss of sales the brand closure is likely to bring, at least in the short term. “My property is also likely to be now worth less,” he stated.

[Source: Automotive News]

  • Dustin Munro

    Take the blue oval with the FORD name,take that name out and replace it with HONDA .That is what Ford is on the verge of becoming:instead of the Ford blue oval, it will soon be Honda blue oval.Most of all,Allan Mulally has done a great job turning Ford around from money losing to money making.However,he is making two major mistakes.
    1.The plan to eliminate the full size rear drive cars!Crown Victoria/Grand Marquis/Town Car in North America and considering eliminating the Falcon in Australia-or putting a FALCON badge on a Taurus.Ford should continue making the full size rear drive cars in Australia and in North America along with possibly ressurecting the Scorpio in Europe.Here is how Ford should do that:
    First step is to retrofit the Crown Victoria/ Grand Marquis /Town Car with the Duratech v6 as base engine-would improve weight distribution for good winter traction,probably give a fuel economy similar to the Taurus,and give great power.Use the coyote engine as optional and for the Police version.
    Second step is to close the St Thomas factory where those cars are made-not to discontinue but to retool for an improved Crown Victoria/Town Car.Make the 2012 Crown Victoria as a left hand drive version of the Australian built Falcon and the Town Car as a luxury version.Possibly make a European version as a ressurected Scorpio.I also recommend making a shrunken coupe version as a resurrected Thunderbird/Continental.Those vehicles were originally Unibody like the Falcon.For 2014,update those vehicles the same way Ford Plans to do with the 2014 Mustang.Make them all with front wheels in front of engine to have at least 50% weight in back for good traction in slippery conditions and have optional 4wd.
    2.The plan to eliminate the Mercury brand!.Ford should keep it’s Mercury brand and use it for Specialty vehicles,Retro style cars,and anniversary edition vehicles.Some examples could be to make a retro style car resembling a 1950 Mercury Coup and Mercury Sedan either as continuous production as a replacement of the Grand Marquis or whenever demand goes down,discontinue and replace with some other resemblance like a 1930’s Ford Coupe etc.That would make Ford and Mercury distinct frome each other.Possibly make one or more front drive Mercury cars too resembling possibly a 1930″s Citroen or a 1950’s Mini etc.
    3.Another mistake Ford is making is putting a rear drive badge-EXPLORER on a front drive vehicle.They should put a Front drive badge on it the same way the put a front drive badge on the front drive Mustang-The Ford Probe.A good front drive badge for the Front drive Explorer would be the Ford Oppertunity! Named after the highly successful solar powered Mars Rover oppertunity which has outlasted the nuclear powered Viking 1 and to date has driven over 12 miles on Mars.
    Ford could also do something else with the Mercury division-make it into a CUSTOMIZING DIVISION that could be run in a similar manner to Panoz.Panoz is a private company that makes their own cars while using some Ford parts like a v8 Mustang engine and transmission while making their own platform and car body.Mercury could be run by teams that like souping up cars and trucks,restoring old vehicles etc.while still owned by Ford.What could be the difference between Mercury and Ford/Lincoln is that Ford wouldn’t build the Mercury vehicles,but would supply the platforms,engines and transmissions while the teams would design and build the vehicles.Some would be retro style while using up to date technology (like Chrysler’s discontinued Plymouth Prowler)while others could be futuristic like helping Ford design a new all size universal rear drive platform etc.

    Honda has no full size rear drive cars,to my understanding no rear drive vehicles at all and their Acura division is Honda twins.Do we want Ford to be another Honda?Many companies now realize that it was a mistake to get rid of their rear drive cars.Allan Mulally should learn from other companies mistakes.