Ford pledges to revive struggling Mercury brand

CHICAGO -- Despite two years of steep sales declines, Ford's Mercury brand has plenty of life left and will expand from four to seven vehicles next year, chairman Bill Ford said Wednesday at the Chicago Auto Show.

Mercury's U.S. sales fell 23.2 percent last year after a 15.6 percent drop in 2002. Declining sales have prompted some industry observers to speculate whether Mercury might go the way of Oldsmobile, the aging General Motors Corp. brand that will call the 2004 model year its last.

But Ford said Mercury still plays an important role in the automaker's lineup, filling a niche between the Ford nameplate and upscale Lincoln brand.

But he acknowledged the misstep in moving the Lincoln-Mercury division in 1998 to the West Coast, where it was managed along with Ford luxury lines Volvo, Jaguar, Aston Martin and Land Rover.

Lincoln-Mercury returned to Ford's world headquarters in Dearborn, Mich., last year, giving the outfit closer coordination with the Ford brand and more interaction with the company's top executives.

"There is still, we believe, a very strong market for Mercury," Ford told a group of automotive journalists. "We think it's very important for Ford Motor Co. to cover the entire waterfront ... so people looking for any kind of vehicle can find it."

Bill Ford, who spoke earlier to a luncheon gathering of the Chicago Economic Club, was on hand for the introduction of Mercury's latest entry, the Montego mid-size sedan.

Ford Motor, the world's third-largest automaker behind GM and Toyota, also announced plans Wednesday to build a new Mercury crossover wagon, a yet-unnamed model that will be based on the Ford Freestyle, which debuts in showrooms later this year.

The new crossover, which will have characteristics of both a minivan and sport utility vehicle, will be built at Ford's Chicago assembly plant, along with the Freestyle, Montego and another sedan scheduled to make its debut this year, the Ford Five Hundred.

Mike Wall, an industry analyst with CSM Worldwide, said the automaker's challenge is "threading the needle" between Ford and Lincoln and trying to differentiate between the Ford and Mercury brands.

"You'd think they can stabilize sales by adding that many new vehicles," Wall said. "The question is how far will it go. The competition is so intense."

On another positive note for Chicago, Bill Ford said the company would add 300 new jobs at its Chicago plant, bringing the total to 2,700. Supplier-related work could add another 100 to 300 jobs in the area, he said.

The automaker, which began building cars in Chicago in 1914, has spent more than $400 million to modernize the plant.

At Mercury, Ford is trying to revive a brand that in recent years has scrapped models such as the Cougar sports coupe, Mystique midsize sedan and Villager minivan. The only model added last year was the Monterey minivan.

By the end of 2005, Mercury will have seven vehicles in its lineup, the most in 36 years. Today, there are four: the Monterey, Grand Marquis and Sable sedans and Mountaineer SUV.

Joining the Montego later this year will be the Mariner, an upscale version of the Ford Escape small SUV. Mercury also is working on its own version of the Ford Futura mid-size sedan planned before the end of 2005.

Ford officials did not say when they'd begin production of the new Mercury crossover.

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Ford Motor Co.: http://www.ford.com

Chicago Auto Show: http://www.ChicagoAutoShow.com