Ouch! Killing Mercury said to cost Ford $500 million

Filed under: Ford, Mercury


In life, Mercury was an under-funded brand mainly composed of waterfall grilles stapled to bone-stock Ford models. In death, however, Mercury apparently gets to see some of the money it always dreamed of having when it was alive. According to Automotive News, Ford CFO Lewis Booth claims that shutting down Mercury before the end of this year will cost the Oval roughly $500 million overall. Booth says Ford already took a $247 million charge in the first half of 2010 to cover the neglected marque’s mercy killing.

The lion’s share of the money being spent will go toward buying out 700 of the 1,700 Mercury dealers across the United States. Back in June, we told you about a package that Ford was presenting to dealers who sign a termination agreement. The reported buyout totaled as much as $200,000 per dealership. (Actual dollar amounts for individual dealers were based on the number of vehicles they sold over a three-year period; more cars moved meant more FoMoCo cash received.)

Would a half-billion invested in updated Mercury product instead of a cash-lined casket have made a difference? Mercury’s sales numbers (or lack thereof) suggest that few car shoppers would have even noticed. Ditching Mercury to concentrate on bread-and-butter Ford has seemed like a no-brainer for years. More importantly, Lincoln, which hasn’t exactly lit up the monthly By the Numbers reports of late, should only benefit from the much-needed infusion of resources that were previously being wasted keeping Mercury afloat.

[Source: Automotive News – sub. req.]

Ouch! Killing Mercury said to cost Ford $500 million originally appeared on Autoblog on Sat, 24 Jul 2010 12:33:00 EST. Please see our terms for use of feeds.

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