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Ford is getting out of the Mercury business in a big, fat hurry, and that means no 2011 models, no more Jill Wagoner commercials and cash compensation for the 1,700+ dealers who sell Ford's long-abused step-brand. Automotive News quotes unnamed sources who say dealers will receive up to $200,000 to stop selling Mercury cars and crossovers, along with money for any new service parts they have lying around.

Ford sales boss Ken Czubay tells AN that the company has worked out a formula for compensation that calculates the three-year average of Mercury vehicles sold at a dealership as a percentage of overall Ford, Lincoln and Mercury sales. The formula also calculates the cost for dealer signage and parts. An AN source claims that dealers who sell zero to 25 percent Mercury products receive $1,500 per unit retailed annually. The number shoots up to $1,650 per unit at 26 to 50 percent of sales and $2,000 for dealers at 51 to 75 percent. The dealer repayment program tops out at $2,500 for dealers who averaged a high 76 to 100 percent Mercury sales over the past three years. Dealers will also get 100 percent of their money back for Mercury parts purchased, and the dealers get to keep those parts free and clear.

Ford President Mark Fields called the dealer payoff "reasonable and fair," adding that it is "beyond what the franchise agreement states. It is beyond what state law states. It's well beyond what other competitors have done in the marketplace."

Some dealers, of course, say the payment is far too small to cover their investments in the Mercury brand. One dealer, who didn't want to be identified, reportedly told AN that he would be losing money even if Ford gave him $500,000.

[Source: Automotive News, sub. req.]


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  • 29 Comments
      • 4 Years Ago
      A total of 1700+ dealers sold 93,000 Mercury's last year. That's roughly 50 each. There's is no way with carrying costs, salaries, commisions, utility bills and advetising that anyone was actually making a profit. It seems that Ford's offer is very at first glance.

      I also doubt that they were any dealers that sold Mercury and no other brand at any other location.
        • 4 Years Ago
        50 cars average per dealer, per year?
        DAMN, that's less than one car sold per week per dealer.

      Tim
      • 4 Years Ago
      Perhaps someone who owns/works at a dealship could chime in on this...

      but why can't you just stop selling Mercurys, don't order anymore, downsize the technicians/salespeople and be done with it....

      Besides signage(which I know is expensive)...what other investments are involved in maintaining a brand like this?
        • 4 Years Ago
        @Tim
        Yep, stand alones were omitted from this...so that's why it might not make too much sense, as those with other brands would keep parts for service, where standalones would have no need anymore.

        "The company has just 276 stand-alone Lincoln Mercury dealers."
        http://www.freep.com/article/20100603/BUSINESS01/6030375/Mercury-dealers-to-take-hit
        Tim
        • 4 Years Ago
        @Tim
        The basic assumption I'm making is that noone is running a standalone Mercury dealership....
        • 4 Years Ago
        @Tim
        The last standalone Mercury store closed already, a little over a year ago.

        Ford has an easy time in my area. Both our Lincoln-Mercury dealers folded a while back and the only place that sells them is already a big established Ford dealer. They only have two small signs to indicate that they have added Lin-Mer products, but the store's main facade and signage are very much Ford.
        • 4 Years Ago
        @Tim
        Mercury does not have stand-alone dealerships. The only dealerships that were outside of standard Ford,Lincoln and Mercury dealerships were the Lincoln-Mercury dealerships. I have worked at a Mercury-Lincoln dealer for nearly 20 years in Northern Va. While this will create change to the dealership I work for, we are receiving heavy incentives to "swap-out" for the Ford brand or accept the buyout as listed above. This is truly a win-win situation for the consumer as Ford will be able to focus more resources on Ford and Lincoln brands. As you can tell all current Mercury models were simply rebadged Fords anyway.
      • 4 Years Ago
      Okay, I might be a bit naive here, but would someone be kind enough to explain what will happen with all the cars that are now NOT being sold? Cars sitting in the dealers' lots? Seems an awful waste to just crush them, doesn't it, especially when Ford's teetering on the edge of the crap-economy bankruptcy abyss. I'm sure that there are plenty of folks who'd be happy to have a brand new car, even if it came without any kind of warranty, expressed or implied. Times are tough, and if Ford's just going to take these cars and destroy them, I think that sort of sucks. And what about folks who already own Mercs? Any replacement parts going to be made available for them? Seems like Ford's just trying to eliminate Mercury from ever existing. Unless I might be missing something here...?
        • 4 Years Ago
        Where did you ever get the idea that the remaining inventory will be crushed? When did that ever happen to a discontinued brand? C'mon.

        They will be sold with attractive incentives.
        • 4 Years Ago
        Tourian: Thank you for your response. I appreciate your taking the time to explain this to me. All makes perfect sense now.
        • 4 Years Ago
        When you have a franchise agreement with a company, you agree to sell their product and they agree to supply you. When either side wants to break that agreement it means they well STOP selling them. After the deal has been made the dealers undoubtedly own the cars and can do whatever they want with them. They won't be required to buy any more from the manufacturer, they won't be required to display them in any sort of fashion, they won't be required to have a sign up, have salespeople trained on the product or anything.

        If they want to sit them in the back of KIA behind the used cars they can. Maybe some will get dumped at auction at huge losses or raffled off or given away on the Price is Right but I can safely say none will be crushed.
      • 4 Years Ago
      I think you mean Jill Wagner. Though, add another 'e' to your spelling, and you get a whole other kind of model.
      • 4 Years Ago
      sounds pretty down right fair for a brand not selling cars....
      • 4 Years Ago
      I can't understand the culture of entitlement that has become so pervasive. Why do some dealers think that they should be immune from any losses? All business investments have some risk involved. In this case Ford is definitely bearing more than their fair share of damages.
      • 4 Years Ago
      A franchise to sell products that aren't being made has no value. This is not intended to make everyone whole, it is a quit claim settlement, and even so I'm not convinced it is the best use of Ford's cash reserves. Sometimes, even often, a business has a loss. Unfortunately, state courts can be quite receptive to the local businessmen who fund judges' election campaigns when they sue the evil out-of-state corporation.
      • 4 Years Ago
      Perhaps a bit off subject here, but I think a "final edition" 5.0 Mercury Marauder would be totally boss and the proper way to celebrate the Mercury brand in its final year.
        • 4 Years Ago
        Just shove a new 400 hp + 5.0 in a "final edition" Grand Marquis derived Marauder with the appropriate suspension upgrades.... and limit the numbers to a few thousand or so. I actually test drove one in '03 as I liked the looks of the car, but it was underpowered and drove, well, like a Grand Marquis. Besides, what other car can/would they use in the new CBS Hawaii 5.0 series???
        • 4 Years Ago
        The Marauder hasn't been sold in 6 years. Just let it go man.
        • 4 Years Ago
        ? You mean to rebadge Mustang as Mercury? Or rather developing a whole new body just to add it to the coffin of the brand that is being discontinued? :)
        • 4 Years Ago
        @jsr: right, "five oh" made me remember some people asking for up-market/refined Mustang being sold as Mercury Marauder
      • 4 Years Ago
      Seems to be quite a fair deal.
      • 4 Years Ago
      There will always be casualties but that sounds pretty fair to me! Much better than what the Saturn and Pontiac dealers got.
        • 4 Years Ago
        This is well in excess of "fair" - the stealers should take the money and run.

        If I were Ford, I'd put a clock on it and cut the offer by 20% every week.
      • 4 Years Ago
      "Okay, I might be a bit naive here"

      Yes you are. I'll let someone else explain.........
      • 4 Years Ago
      Mercury really has been gone for some time now. The dealer I drive by every day (suburban Chicago) has a back lot the size of a football field with about 15 new cars sitting in it. Been this way for a couple of years. Ford needs to take Lincoln up market but has way to many dealers. Figure about 70% of the current L-M dealers will also loose their Lincoln deal. China must be salivating having all these empty stores available just waiting for a place to sell their crap.
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