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On the Ropes
Plant closure, low sales could sink Lincoln's venerable Town Car flagship

By AMY WILSON | AUTOMOTIVE NEWS
AutoWeek


Photo by Global Auto Index

DETROIT -- Ford Motor Company has informed the Canadian Auto Workers union that it won't move the Lincoln Town Car to a plant in Ontario, putting the venerable luxury nameplate in jeopardy.

Ford plans to idle the Wixom, Mich., plant, where the Town Car is assembled, during the second quarter of 2007. Ford officials won't say what will happen to the Town Car, Lincoln's top-selling vehicle since at least 1980.

The Town Car also has been a mainstay of the livery business, which Chrysler will enter this year with the stretched 300.

CAW President Buzz Hargrove told Automotive News that Ford executives have told the union that Town Car production won't shift to the St. Thomas, Ontario, plant. That plant makes the Town Car's sister products, the Ford Crown Victoria and Mercury Grand Marquis.

The automaker underscored that decision in meetings with the CAW in early June, Hargrove said.

"We've been arguing for it," he said. "It makes sense, even if you only put 30,000 or 40,000" units in the Canadian plant.

Indeed, moving the Town Car to St. Thomas seems to be the only plan that makes sense if Ford intends to keep the Lincoln flagship in its lineup. Because St. Thomas is tooled up for similar products, it would cost Ford far less to move the Town Car there than elsewhere.

Without a move to St. Thomas, it looks as if the Town Car will die after Wixom production ends next year, one analyst says.

"I'm going to put the fork in it because there's no other place they can go with it," said Erich Merkle of IRN Inc., an automotive consulting firm in Grand Rapids, Mich. "They're not going to invest in the tooling and equipment for Town Car at another plant - I can't imagine."

The end of the Town Car would leave just Cadillac as a player in the "old codger" segment of the luxury market, Merkle said.

The average age of a retail Town Car buyer this year is 69, according to J.D. Power and Associates' Power Information Network. The average age of a Cadillac DTS buyer is 68. The average age of buyers in the large-premium-car segment is 61.

As its customers have aged, the Town Car has suffered.

"Let's face it, Town Car sales overall are just much lower than they used to be," said Ford sales analyst George Pipas. "The retail business is next to nothing."

During the first five months of 2006, about 59 percent of Town Cars built went to fleet customers, including livery businesses. Although the Town Car remains Lincoln's highest-volume car, it has been surpassed as the brand's retail top seller by the Zephyr, a mid-sized sedan that went on sale last fall.

This year Lincoln is selling an average of about 1,530 retail Town Cars per month, compared with about 2,550 retail Zephyrs per month. The Town Car's retail sales are down 21 percent through May, Pipas said. The Lincoln brand's overall sales are up 5.3 percent for the same period.

Pipas said he is not privy to Ford's plans for the Town Car. But he said retail customers - even though their numbers are dwindling - would be disappointed if the model dies.

"Customers who view the next-generation large Lincoln, they may view it very positively - but it won't be a Town Car," he said.

If Ford stops making the Town Car with the closure of the Wixom plant next year, there will be a gap before a replacement product is on the market. Ford plans a production version of the Lincoln MKS concept car featured at the 2006 Detroit auto show. It could arrive as early as late 2007. But that vehicle, based on the Ford Five Hundred platform, is much smaller.

It wouldn't be a suitable substitute for livery businesses that have relied on the Town Car for decades. They might look at a stretched version of the Chrysler 300 that goes on sale this fall. Chrysler has said it expects as much as 70 percent of the sales of the Chrysler 300 Long Wheelbase sedan will go to livery customers.

Even if the Town Car is discontinued after Wixom closes, that

doesn't mean its Panther platform siblings also will be killed. Ford has told the CAW that it plans to build the Crown Victoria and Grand Marquis at the St. Thomas plant until at least 2010, Hargrove said. After that, the plant's future is up in the air.

St. Thomas already has had a number of down weeks this year, Ford sources said. It will go to four-day production weeks in July, reducing weekly output to 4,000 units from about 5,000. A line-speed reduction planned for August will reduce output further.

The capacity reductions will minimize the need for further down weeks for the rest of the year, a Ford spokesman said.

The St. Thomas plant is scheduled to go to one shift of production in 2007. Going to one shift often is a harbinger that a plant will close.

Ford has said it will close seven assembly plants through 2012 as part of its Way Forward restructuring plan for North America. Two of those seven plants remain unidentified.

"I have a very nervous feeling long term about St. Thomas," Hargrove said. "We have no reason at this point to be optimistic that they're going to do anything with St. Thomas."
 
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