Ford summons dealers to discuss Lincoln's future-UPDATE 2

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Thursday September 09, 2010 11:53:19 AM GMT

* Lincoln dealers to meet at Ford headquarters Oct. 4

* Ford to pitch vision for expanding, enhancing Lincoln

* Meeting planned as Ford phases out Mercury brand (Adds comment from Ford spokesman, sales figures)

By Bernie Woodall

DETROIT, Sept 9 (Reuters) - Ford Motor Co is summoning Lincoln dealers to a meeting in October to discuss plans to breathe new life into a brand that has long trailed the likes of Cadillac and Mercedes.

"It will be a Lincoln update ... giving dealers a look at how Ford will now work with Lincoln as an exclusive, luxury brand," Ford spokesman Christian Bokich said.

The meeting is scheduled for Oct. 4 at Ford's Dearborn, Michigan, headquarters.

Ford is preparing to phase out its Mercury brand and is negotiating with dealers on compensation for dropping the brand. Mercury was created in 1939 by Edsel Ford, son of Ford's founder, Henry. It was intended to be a stepping stone between the Ford brand and Lincoln, a strategy modeled after General Motors Co's "brand ladder" between Chevy and Cadillac.

Among the brand's notable launches was the Mercury Cougar, a 1960s entry that led to the Mercury slogan, "The sign of the cat."

Of roughly 1,700 Mercury dealerships, most are paired with Ford or Ford and Lincoln. There were 264 Lincoln-Mercury dealerships at the end of July.

Many of those dealers have depended on Mercury for the bulk of their sales and some see an uncertain future when they are reliant only on Lincoln.

Some Mercury dealers have been offered payouts of $300,000 to $400,000 each by Ford in a bid to avoid a protracted legal battle, a source familiar with the discussions has said.

Bokich declined to comment on compensation being offered to Mercury franchise holders because negotiations were ongoing.

Ford will end production of Mercury vehicles within the next two months, Bokich said.

LOOKING TO WOW LUXURY MARKETS

Lincoln was founded in 1917, and acquired by Ford in 1922. In the late 1990s, it became the centerpiece of Ford's luxury portfolio that had also included the Jaguar, Aston Martin and Volvo brands.

Bokich said the number of Lincoln dealers selling only that brand would be known after the Oct. 4 meeting.

Ford will use the meeting to discuss upcoming products, including versions of the MKX crossover and a hybrid MKZ sedan, and plans to build Lincoln's image in luxury markets like New York, Los Angeles, and Miami, Bokich said.

He said that while the luxury market was concentrated in large cities, dealers in those places would not be given preference over dealers in smaller markets.

Dealers will "decide if they find these updated parameters in line with their priorities for their markets," Bokich said.

Ford has been restructuring since 2006 based on a strategy of shedding niche brands and focusing on improvements for its mass-market Ford vehicles.

Lincoln has failed to catch fire with younger consumers. Its U.S. market share slipped in 2010 while General Motors Co's Cadillac and Daimler AG's Mercedes gained ground.

Toyota Motor Corp's Lexus is the U.S. luxury market leader. Lexus dealers sold over 145,000 vehicles through August 2010 compared with nearly 56,000 sales of Lincolns.

Lexus sales were up 11 percent over the first eight months of the year versus 5 percent for Lincoln. (Reporting by Bernie Woodall; Additional reporting by Kevin Krolicki; Editing by Toni Reinhold)

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