However, it seems the Ford hasn’t managed to avoid a financial black hole coming from Mercury. The first company’s CFO, Lewis Booth, said that the killing of the Mercury brand by the end of the current year will burn around half a billion dollars, as Automotive News reports (subscription required).
The CFO also said that Ford has already spent $247 million in the first six months of the current year to shut down some of Mercury’s dealers and cover other aspects.
An important part of the funds will be used to buy out some of the Mercury dealers across the U.S. Ford plans to offer money to 700 of the 1,700 dealerships that make the current network. These will close their businesses in return for financial compensation. Various media reports show that a dealership could receive up to $200,000 for closing its doors. The amount of money paid is calculated using an algorithm that is based on the sales volume of the dealer.
Ford has decided to discontinue the Mercury brand due to the fact that its sales were showing extremely low levels. The Blue Oval said that the move will allow it to concentrate on the Ford and Lincoln brands. The latter doesn’t currently have a best-seller status, so the shutting down of the Mercury sister should help it, as this means that it will receive additional funding and more attention.
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