SOUTHFIELD, Mich. — Ford is preparing to wind down the Mercury line, created in 1939 by Edsel Ford, after sales plunged 74 percent since 2000, said two people familiar with the plan.
The automaker's top executives are preparing a proposal to kill Mercury to be presented to directors in July, said the people, who asked not to be identified revealing internal discussions. Mercury, losing two of four models next year, will be starved of products and promotion, the people said.
Chief executive officer Alan Mulally had emphasized the automaker's namesake brand as he revived the only major U.S. automaker to avoid bankruptcy. The timing of Mercury's demise depends on how fast executives can persuade the brand's dealers, who also sell Lincoln models, to close or merge with Ford showrooms, they said.
"Mercury is a forgotten brand," said John Wolkonowicz, an auto analyst with IHS Global Insight in Lexington, Mass. "Many Americans probably already think it has been discontinued. Mercury was too similar to Ford from the very beginning."
Ronnie Thomas, general sales manager of Madison County Ford Lincoln Mercury in Richmond, Ky., said of the proposal, "That's news to me."
Thomas said Mercury makes up about 10 percent of new car sales at his dealership. But "it wouldn't surprise me one bit" if the big bosses decided to axe the line because of belt-tightening. On the other hand, he's not too worried. He has heard such rumors before. "It could be some executive just talking," he said. "We may not see anything change for five years."
Mulally, Ford's CEO, also is unloading Ford's European luxury brands, after the automaker failed to achieve a goal to have them generate one-third of automotive profits. Ford in March agreed to sell Volvo to China's Zhejiang Geely Holding Co. It sold off Jaguar, Land Rover and Aston Martin in the past three years.
Mercury would join Pontiac, Saturn, Oldsmobile and Plymouth among the departed Detroit brands of the 21st century. Sales will end within four years, one of the people estimated. General Motors, as part of its reorganization last year, sold or closed four of its eight brands sold domestically.
Edsel Ford, son of founder Henry Ford, established Mercury during the Great Depression as a mid-priced alternative to mainstream Ford and upscale Lincoln. Edsel's great-granddaughter Elena Ford, now the automaker's director of global marketing, initially opposed discontinuing Mercury, which she was in charge of promoting before 2002, the people said.
Doing away with Mercury is supported by Ford executive chairman Bill Ford and other members of the founding family, who have 40 percent voting control of the automaker through a special class of stock, the people said. With Mercury accounting for 1.9 percent of Ford's global sales in the first quarter, the family has decided that ending it is best for the business, the people said.
"Our plans regarding Mercury have not changed," said Mark Truby, a Ford spokesman. "Like any good business, we constantly assess our business portfolio. If things change, we will let you know." Bill and Elena Ford declined to comment, Truby said.
Mercury sales peaked in 1978 at 579,498, when it had the slogan "The Sign of the Cat." Deliveries fell 84 percent to 92,299 last year. Mercury's sales are up 23 percent this year through April, less than Ford Motor's overall gain of 33 percent, according to researcher Autodata Corp. of Woodcliff Lake, N.J.