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Old 01-06-2003, 23:46   #1 (permalink)
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Lincoln Mercury maps success strategy

New leader hopes to steer division to recovery
By Mark Truby / The Detroit News
Daniel Mears / The Detroit News

DETROIT -- Ford Motor Co.'s Lincoln Mercury division changed strategies in the past three years about as often as most people change their oil.

The division moved to California to soak up cutting-edge car culture. The result: better weather, but worse communications with the home office in Dearborn.

The two American brands briefly rubbed elbows with Jaguar, Land Rover and Volvo after joining Ford's Premier Automotive Group, but were treated like unwanted party crashers.

One after another, grand plans to overhaul Lincoln Mercury have been scrapped. The only consistency has been sales declines and red ink.

Now new Lincoln Mercury President Darryl Hazel is determined to end this automotive identity crisis and steer Lincoln Mercury back to prosperity.

"Everybody wants to be something other than what they are," Hazel said Monday in an interview. "I want to be 100 pounds lighter. Lincoln Mercury went through the same thing. When you try to be someone else you get trashed. So now we are paying the price and we're on a remedial course."

Hazel, hired last year to replace miscast former General Electric Co. executive Brian Kelley, is setting what he believes is a more realistic course for the two brands. Lincoln and Mercury, Hazel said, are distinctly and exclusively American brands.

Lincoln Mercury's sales and marketing staffs moved back to Dearborn after a three-year stint in Irvine, Calif. And the division is back under the control of Ford's North America operations, which has simplified its product development and sales operations. Executives have shelved plans to sell Lincolns in Europe. Unprofitable models like the Lincoln Continental and Blackwood and the Mercury Cougar were whacked.

Hazel is counting on the stability to allow Lincoln Mercury to focus on improving dealer profitability and bolstering employee morale, which remains low compared to other groups of Ford employees, Ford officials say. Free from distractions, Lincoln Mercury has drawn up a credible plan to build new cars and SUVs over the next few years, Hazel said.

On Monday, at the North American International Auto Show, Lincoln unveiled the Navicross, a slab-sided crossover vehicle that combines the attributes of a sedan and a sport utility vehicle. Mercury, in turn, unveiled the Messenger, a sleek, angular coupe that has become one of the surprise hits of the show. Neither may become production vehicles in their current form, but they offer a realistic expression of what Lincoln Mercury can become.

"These are brands that badly need an identity," said Jeff Schuster, an analyst with J.D. Power and Associates.

While the show cars provide a glimpse of a better future, Lincoln Mercury must find a way to halt sliding sales and steep financial losses.

Lincoln sales dipped 5.6 percent this year, while Mercury's fell 15.6 percent. Hazel said his goal is to stop the sales slide this year. That won't be easy -- and turning a profit this year is far from a given.

"It will be nip and tuck," said Ford Group Vice President Jim O'Connor, who oversees Ford and Lincoln Mercury sales and marketing. "The losses will be substantially reduced. I won't know about profits until near the end of the year."

O'Connor said Lincoln Mercury probably will have to sell 100,000 units among its Lincoln Navigator, Lincoln Aviator and Mercury Mountaineer SUVs to have a chance to make a profit.

Lincoln Mercury plans to reduce its sales to rental car and other fleet buyers by 10 percent to 20 percent, Hazel said. The plan is to sell more cars and SUVs to individual buyers, a more profitable proposition.

The strategy calls for rolling out one all-new Mercury product per year for the next four years. The additions will include a new minivan, due out this fall, a small SUV, and two sedans. Lincoln Mercury's sales arm also plans to start pushing the venerable Mercury Grand Marquis large car. Once a steady profit maker, the Grand Marquis was virtually ignored by the company in the past two years and sales have suffered.

Last year, Lincoln was busy launching the new Aviator mid-sized SUV and revamping its big Navigator sport-ute and LS and Town Car sedans. While the products have been generally well-received, they don't look significantly different than the vehicles they replaced.

"We have a big challenge because they are new but they kind of look a lot like the ones we had before," Hazel said. "People want their neighbors to know they are in something new."

Hazel, in fact, concedes that Lincoln Mercury has a hard road to travel before it can churn out profits like it once did so reliably for parent Ford.

"We have a lot of issues," he said. "But we are no longer trying to be something that we're not. What we are is not bad at all if we do it right."

(Photo) The Mercury Messenger, unveiled Monday, was a surprise hit of the auto show at Cobo Center. The Ford division has had stable sales but financial losses in the past few years.
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Old 01-06-2003, 23:54   #2 (permalink)
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Concept captures the style of future models
January 7, 2003
Y JAMIE BUTTERS
FREE PRESS BUSINESS WRITER

With the unveiling of the Messenger sports car Monday at the North American International Auto Show, Ford Motor Co. was trying to send the message that the Mercury brand has an attractive future.

The Messenger was aimed at skeptical industry analysts who have urged the automaker to kill the brand that Edsel Ford started almost 70 years ago as a stepping-stone between the bread-and-butter Fords and luxury Lincolns.

But company executives touting the brand at the show had different ideas about the type of customer Mercury should pursue.

Executive vice president Jim Padilla sees Mercury continuing to play its traditional role as a middle-brand, with more refinement, power and luxury than the Ford brand but at a lower price than Lincoln.

As such, said Chris Theodore, Ford's vice president for North American product development, the brand likely would skew a little feminine, and the silver and teal show stand lends support to that idea.

Lincoln Mercury President Darryl Hazel disagrees. Yes, the industry is paying more attention to the needs of women, he said. But he doesn't want to limit the brand or the automaker's thoughts on what women might like, he said. "That gets us into trouble."

Mercury, he says, is for the individual who wants Ford-like value but sees himself as distinct from the pack.

Outgoing brand manager Elena Ford, on the other hand, said Mercury needs to appeal to a younger audience -- Generation Xers in their mid-30s -- that will be around long after today's loyal buyers of Grand Marquis sedans.

Despite those differences, they all agree that Mercury has the product on the way that will make money for Lincoln Mercury dealers and Ford.

This year, Mercury is getting a Monterey minivan. Next year, it will get an Escape-size sport-utility vehicle. New car models will follow each of the next two years.

Neither of those cars will be the Messenger, and Ford executives say it will probably never make it to a Mercury showroom.

Lincoln Mercury designer Gerry McGovern said Messenger shows the designs of future Mercury models in the way that the Continental showed what Lincolns would be like.

It was inspired by the Cougars of the '60s, McGovern said, although it proportions more closely resemble those of a Chevrolet Corvette.

"Lincoln is about elegance and sophistication," he said. "Mercury is a little more in your face. But not so much in your face that you need a pair of pliers to take it out."

Lincoln, which last year refreshed its entire lineup, Monday introduced the Navicross concept, a combination of a coupe and sport-utility vehicle. While the Mercury lineup catches up with Lincoln's, the division is moving its headquarters to Dearborn from Irvine, Calif., where the Premier Automotive Group has its North American headquarters.

Lincoln Mercury will likely lose about one-third of its employees who choose to stay in Southern California, Hazel said. Those people will all be replaced.

Companies try to do without employees who retire or pursue other jobs. But that isn't an option for Lincoln Mercury, Hazel said.

"If we had more ideas on how to run more efficiently, we'd be doing it now," he said.

Hazel stressed that every employee is invited to move to Michigan. But he wants them to commit one way or the other by March.

Their offices will be somewhere at Regent Court, the Ford Division headquarters known as the Blue Lagoon.

This will provide more career opportunities for Lincoln Mercury employees in the long run, Hazel said, because they will be able to try jobs in Ford Division or sales and service.
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