Kerkorian's boy says Ford should offload Mercury, Volvo

Every villain needs a sidekick, and if there were ever a villain character in the soap opera that is the North American auto industry, it's 91-year-old billionaire Kirk Kerkorian who recently revealed that his private holding company, Tracinda Corp., was buying up Ford stock like he knew something the rest of us didn't. Kerkorian's sidekick in this saga is Jerry York, an ex-auto exec who the billionaire placed on GM's board of directors back when he was pushing for an alliance between the biggest of the Big 3 and Nissan/Renault.
York has revealed that he met with Ford CEO Alan Mulally after Tracinda Corp. began buying up Blue Oval stock and expressed his confidence in the executive's plan to turn around Ford. He also said that if it were him at the helm, both Mercury and Volvo would be sold. York thinks that Mulally will likely put Volvo up for sale in the next 18 months, but there's a bit more analysis to be done on whether or not to sell Mercury.
While Volvo might command a pretty penny on the open market for its brand cachet and expertise in the area of safety, we're not sure there's much demand out there for Mercury. We suspect that Ford is faced with the same question that GM was when it scuttled Oldsmobile: kill it or keep the lights on? Like Oldsmobile, Mercury is seen as a brand of rebadged vehicles so intertwined with its parent company that no potential buyer would want to deal with the long, expensive process of extricating it from Ford and starting over. But York thinks Ford might be able to get something for it, which doesn't say a lot to us about Kirkorian's sidekick.
UPDATE: Ford issued a press release saying that Volvo is not for sale and that it continues to invest in Mercury. Lewis Booth, Volvo's CEO, also reiterated that his brand's not going anywhere.
[Source: Automotive News, sub. req'd]












Reader Comments (Page 1 of 3)
DJ 1:34PM (5/02/2008)
Ford cannot sell Volvo right now because too much of it's near future product line shares Volvo developed platforms.
And is York senile or just old and clueless? Who would buy Mercury? Every single Mercury vehicle is nothing more than a rebadged Ford vehicle. I seriously doubt anyone would buy the brand anme and begin building totally new and different cars.
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Red Star 2:00PM (5/02/2008)
I would buy Mercury. Mercury's interior is a lot nicer than Ford's and a lot of equipment that is options on Ford is standard on Mercury. And you get all that for only $1,000 more than Ford.
Alex 2:44PM (5/02/2008)
Why do you think they have more equipment at such a low cost? Its the only way to get people into their bland rebadged cars, Ford killed Mercury long ago put the nail in the coffin and focus on making Lincoln an actual luxury brand
Red Star 2:59PM (5/02/2008)
I don't care for what reason Mercury have more equipment than Ford for only $1,000 more, I'm just trying to say that Mercury is a better buy than Ford.
Westside T.O. 7:25PM (5/02/2008)
@RedStar...
Yeah, when you're buying a car it's a better buy. Not when you're buying a company!
usncmfox 8:21PM (5/09/2008)
A sale of Mercury would be the death of Ford. Probably a worse move than when it sold of it's Heavy Truck and Ag equipment divisions. One reason being that all of Mercury's models are the same as Ford's, with a different logo on their grill. A Chinese or Indian company could move production overseas, and probably sell the same product as Ford for half the price, not to mention the dealer base, and brand awareness already achieved. I believe a sale of Volvo would be a smart move, if possible, Ford needs to focus on it's core brands.
naggs 1:35PM (5/02/2008)
who on earth would buy mercury?
ford is continuing with its best of many bad options with that brand and slowly starving all the mercury dealers to death so it can eventually kill the brand.
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The Other Bob 3:19PM (5/02/2008)
Maybe fold up shop for Mercury or just sell those models under the Lincoln name. Lincoln is not really luxury anymore anyway. Or have Mercury sell Ford's Europian makes under the Mercury label.
Ford should not sell Volvo, especially now that they platform share so much.
York is another wall street butt-head who doesn't understand the car buisness. Kinda like everyone at Chrysler.
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John P. 1:37PM (5/02/2008)
The name Mercury itself is cool, and their the best looking of the rebadges. Too bad Ford never really went mid-market with it, and way up market with Lincoln. That way they'd have the bases covered instead of what they have now. One crowded base with three not quite touching it.
And I'm historically a Ford Guy.
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geo.stewart 2:43PM (5/02/2008)
I STILL say that Mercury should be Ford's Saturn brand- peddling Europe's fare.
otherwise, shutter the doors. Lincoln is too close to Buick and not Cadillac for Mercury to survive.
mmm 1:39PM (5/02/2008)
I bet the Chinese or Indians would be interested. Would be an easy way into the US market.
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DJ 1:46PM (5/02/2008)
If the Chinese were to buy any brand name at this point, it would be Buick. They love the nameplate in China and it would be a great entry for them.
Mercury just skews way too old. The only people buying Mercurys now are geezers like Jerry York.
BizReporter 2:49PM (5/02/2008)
MMM is right, the Chinese or Indians would kill for the Mercury name. As for demographics, they wouldn't care. They simply want the name brand and the dealer networks, not the actual cars. Those would be replaced with their own models, and may diverge from Ford's design language.
mikes 11:29AM (5/03/2008)
Great point mmmm.. I, and apparently most of the folks here, hadn't thought of that. The Chinese or Indians would love the Mercury brand name.
This might be a big sell for Ford - they wouldn't lose anything, just a name. Whereas Volvo would leave with all its IP? not sure how that would work.
Tricky dicky 1:45PM (5/02/2008)
the guy comes off as senile.
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Xcountryflyer 6:52PM (5/02/2008)
If they are going to do nothing but do chrome accents to Ford products and call them Mercury vehicles it should die. If they keep it, they should make an effort of differentiating it like Saturn.
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FSM 1:43PM (5/02/2008)
Its funny, before I was ever interested in the car business, at around age 8, I remember being puzzled by Ford/Mercury
and Chrysler/Plymouth/Dodge. Since there were so many rebadged cars that looked identical and it seemed weird to me. I guess in that case I was wise beyond my years, because evidently multi-billion dollar corporations can't figure it out.
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compy386 2:14PM (5/02/2008)
You simply don't understand how the average person thinks. I have a friend that mistook a Camry as a Mazda3. To me those vehicles look nothing alike, but the average American probably would have trouble telling you which automaker owns Mercury. The fact is the consumer does see something different in Mercury and the cost of maintaining Mercury is relatively low. There are no stand alone dealerships and the only true cost is advertising. You said yourself that it's just a rebage so the cost of rebaging should be minimal. Ford has a lot more problems on its mind than what to do with Mercury.
Throwback 1:43PM (5/02/2008)
I agree that Mercury serves no purpose but does he really think there is a buyer for Mercury? If he does Ford should not let him anywhere near the board becuase he clearly has lost it.
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adelossa 1:44PM (5/02/2008)
Mercury should become a performance/luxury brand of Ford, while Volvo 'develops' safer cars whose features will eventually make it to the other Ford fleet.
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