Dead Brand Walking

In recent statements to the press, Tracinda's Jerry York quipped on "what he would do" if he were running Ford Motor Company, namely sell off or axe Volvo and Mercury. Tracinda is looking to invest heavily into Ford after failed forays at Chrysler and GM. After some thought, he may be onto something here but these two brands are in different situations. Since my time at Ford in the late 1980's (and even before that), Mercury was always the red-headed stepchild -- product-starved, little advertising or marketing and a revolving door of brand managers passing through the Ford executive training program. Everyone had to do a stint at Mercury, ask Bill Ford. The Mercury situation is little improved twenty years later. So why does Ford keep them around? That's easy -- they don't want to piss off their dealers (no rocket science there). It has little to do with loyal Mercury customers or orphaned product lines. It has everything to do with potential lawsuits, bad press and massive dealer buyouts. GM went through this organizational trauma when it shutdown the ancient Oldsmobile brand earlier this decade -- it was a painful and very expensive bullet to bite.

Volvo is another breed of brand. Volvo has a distinct and loyal fan base, quirky but fun vehicle designs and a premium European cache. For full disclosure, I have to say I am a Volvo owner wannabe -- so I own a Saab instead -- and have been wanting to buy an XC90 for the last four years to no avail. Volvo dealers are also a different set of dealers. Often nestled in tony suburbs of major metro areas, these dealers have pockets of repeat buyers and a cool product to sell. As an organization, Ford has abused Volvo just slightly less than Mercury. In the 1980's and 1990's, Volvo was headquartered in the affluent suburbs of NYC (Northern NJ) before joining their Premium Automotive Group brethren in Irvine, California for a few years. Now Ford is moving Volvo back to NJ to be near its largest buyer base in the Northeast US. Volvo has also been on the low end of the totem pole with marketing and advertising dollars for the past few years.

So what would I do if I were Mr. Mullaly? Shutdown Mercury ASAP, it's been a dead brand walking for twenty years. Keep Volvo but give them some space. Let them design their own vehicles, market and sell to their core base and basically let them be.