UPDATE 2-Ford aims to wrap Mercury dealer talks by year end

* Hopes to complete Mercury dealer discussions by end 2010

* Ford 2010 and 2011 earnings outlooks ‘absolutely intact’

* Overall dealer consolidation ‘pretty much on track’
(Adds quotes from CEO, background, byline)

By David Bailey

CHICAGO, June 8 (BestGrowthStock) – Ford Motor Co (F.N: ) hopes to
wrap talks by year end with the dealers for the Mercury brand
it is shutting to focus on its mass-market Ford and luxury
Lincoln brands, Chief Executive Alan Mulally said on Tuesday.

Mulally declined to discuss the expected cost for phasing
out the Mercury brand, part of a restructuring that includes an
expanded investment in the Lincoln brand lineup. Mercury
production is expected to halt in the fourth quarter.

“We don’t have a time frame per se, but we are hoping to
help everybody through the rest of this year, that is the
general time frame,” Mulally said after an appearance at the
Chicagoland Chamber of Commerce annual meeting.

Company data showed that the broadly improved Ford brand
vehicle lineup would meet the needs of Mercury customers,
Mulally said of the decision announced last week to phase out
the Mercury brand which was created by Edsel Ford in the

Mercury has no stand-alone dealerships in the United States
and some 1,436 of its 1,712 dealerships are paired in some way
with the Ford blue oval brand that has been expanding. That
leaves 276 Mercury-Lincoln dealerships that could become solely
Lincoln dealers when the phase-out is completed.

“We have the vehicles that people really do want to cover
the needs of the customers who were looking at Mercury before,”
he said. “The entire Ford product line has moved up.”

Ford has reintroduced a small car to the United States this
year in the Fiesta and will add a redesigned Focus compact car
and a redesigned Explorer SUV to its brand lineup among other
additions and investments. That leaves the Ford brand with a
full lineup globally and within the United States, he said.

When it announced the Mercury closing, Ford affirmed its
outlook for “solidly profitable” in 2010 and for its 2011
earnings to improve on 2010. It has not detailed the cost to
wind-down Mercury or a specific earnings target.

“We have everything associated with what we are doing
included in our guidance,” Mulally said.

Ford, which last year posted its first full-year profit
since 2005, reported a first-quarter profit (Read more your timing to make a profit.) of $2.1 billion and
raised its full-2010 outlook to solidly profitable. The
automaker’s losses totaled $30 billion from 2006 through 2008.

Ford has been working for several years to reduce its
dealership network, primarily in some metropolitan areas where
consolidations would leave the surviving dealers with higher
annual volumes.

“We are pretty much on track with our consolidation,”
Mulally said. “We have a few too many dealers in some of the
larger metropolitan areas, but we are continuing to work with
all of our dealers including the Mercury dealers in a
collaborative way.”

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(Reporting by David Bailey, editing by Matthew Lewis and Gunna

UPDATE 2-Ford aims to wrap Mercury dealer talks by year end