DETROIT -- Ford Motor Co. will take a three-part approach to retaining Mercury customers disenfranchised by the brand's demise.
Ken Czubay, Ford's U.S. sales chief, told Automotive News that the company is displaying a phone number on its Web sites for concerned Mercury customers to call. By the end of this week, new Mercury owners will be sent a letter addressing the shutdown. Ford also plans consumer offers for service and new-car incentives to retain the brand's buyers.
Czubay said he did not know how many Mercury owners exist. Edmunds.com data show that nearly 4.3 million new Mercury vehicles were sold in the past 15 years. Edmunds does not have scrappage data.
After announcing plans last week to close Mercury by year end, Ford offered the 1,700 dealerships with Mercury franchises cash for the loss of the brand. Total compensation would range from the very low thousands up to about $700,000, sources said.
Compensation is based on a three-year sales average of Mercury as a percentage of a dealership's total sales. It also factors in repayment for signs and parts and a blue-sky value, Czubay said. Blue sky measures a store's intangible assets, such as good will.
In an interview, Mark Fields, Ford's president of the Americas, said the compensation "is beyond what the franchise agreement states. It is beyond what state law states. It's well beyond what other competitors have done in the marketplace." For example, most Mercury parts are commingled with Ford parts, Czubay said. Ford will let dealers keep Mercury parts and pay them 100 percent of the value.
But one dealer who asked not to be identified said Ford offered nearly $200,000 in total compensation. He said that's not enough, given that he invested millions in a new Lincoln-Mercury showroom three years ago.
Sources said the formula gives dealers whose Mercury sales were 0 to 25 percent of total sales $1,500 per unit retailed annually. Dealers with 26 to 50 percent of sales get $1,650, those with 51 to 75 percent get $2,000, and those with 76 to 100 percent get $2,500.
Last orders will be taken in early August. Ford is offering $1,500 in dealer cash on all Mercury vehicles through August.