DETROIT – Ford Motor Co., moving to wind down its Mercury brand, extended the dealer cash program offered on all Mercury products through September, Automotive News reported.

The program, which allocates $1,500 per vehicle, was set to end Aug. 31.

“We are continuing to provide strong sales tools to our dealers so they are able to remain competitive in the marketplace,” Ford spokesman Steve Kinkade said. Some dealers feared Ford would reduce the per vehicle dealer cash amount to $1,000, but Kinkade says that amount has not been reduced.

Ford announced on June 2 it would shutter the Mercury brand by Dec. 31. It plans to sell all remaining Mercury inventory before the year ends.

Many dealers welcomed the extended dealer cash program as they try to sell their last remaining Mercury products.

“It’s good news. It’s helped us,” said Ed Witt, owner of Witt Lincoln Mercury in San Diego. He has a 30-day supply of Mercury vehicles.

“Business in general is still difficult,” Witt said. “But we have a big luxury market here and we feel confident with a lot of hard work and support from Ford we’ll do fine.”

At the end of July, Ford had about 8,200 Mercury vehicles in U.S. dealer stock, said Ken Czubay, Ford’s vice president of U.S. marketing, sales and service. That’s less than a 40-day supply.

At the end of June, Ford had 10,000 Mercury products in U.S. stock.

Ford plans to end production of Mercury vehicles in early October.

“The sell down is proceeding smoothly,” Czubay said during a July sales call. “By the end of the year there will be very few Mercurys in stock.”

Many Mercury dealers are reluctant to sign their settlement deal with Ford Motor Co. because they want larger payments, Automotive News reported.

Some dealers and their lawyers say the reluctance to sign points to a rocky wind-down of Mercury. Lawsuits are possible, and negotiations between many dealers and Ford are certain. Many dealers aren’t sure of their options but know they don’t like the offers.

Of the 1,712 Mercury dealerships, about 700 have signed Ford’s compensation agreement, the automaker says. Ford announced in June that it would terminate the 71-year-old Mercury brand by Dec. 31.

“I haven’t talked to anyone who has signed it yet,” says Chris Lemley, owner of Sentry Auto Group Ford-Lincoln-Mercury-Mazda in Medford, Mass.

Dealer lawyers have seen offers ranging from $100,000 to nearly $800,000. Ford declined to comment on the amounts. The company says it will pay 100 percent of what dealers paid for parts. Dealers also may keep and sell them, Ford says.

“There’s no question that dealers feel Ford’s offers are not a true value for the franchise,” says Mike Charapp, a McLean, Va., lawyer who represents dealers. “Ford’s contention, as I understand it, is they’ll broaden the Lincoln lineup, and the dealers will pick up the sales that way. I don’t think Ford even has a pretense this is a true value for the franchise.”

In the next four years, Ford will expand the Lincoln lineup with at least one new product and will update several vehicles, say Ford and industry sources.

Ford says its cash compensation to Mercury dealers is fair. The compensation is based on a formula that considers many factors including dealers’ recent sales, says Ford spokesman Steve Kinkade.

“We’re not trying to pull the carpet out from under these guys at all,” Kinkade says. “This goes along with our collaborative process of working with dealers on a case-by-case basis.”

One Mercury dealer who requested anonymity because he hopes to negotiate with Ford says he spent millions on his franchise, real estate and construction. Yet Ford is offering him less than $150,000 in compensation for his Mercury franchise.

Another dealer who spoke on the condition of anonymity says he plans to sue Ford. His compensation offer was about $500,000, which he thinks is a far cry from the millions he has invested to build and operate the store.

Some Mercury dealers fear that if they are left with only Lincoln, they will go out of business.

“For some dealers, the loss of Mercury will lead to the destruction of their Lincoln franchise,” says Charapp, the dealer lawyer. “They have legal cause now to argue that by terminating Mercury, it’s a constructive termination of Lincoln also.”

Many Lincoln-Mercury dealers say Mercury accounts for 40 to 60 percent of their new-vehicle sales and service revenue. Last year Lincoln sold 82,847 vehicles in the United States, while Mercury sold 92,299.

Ford acknowledges that some of the 276 Lincoln-Mercury dealerships are in markets that cannot support a stand-alone Lincoln store. Mark Fields, Ford’s president of the Americas, has said Ford will work with those stores, helping them either get a Ford franchise or sell their Lincoln operations to a Ford store.

Charapp declined to speculate how many Mercury dealers might pursue legal action against Ford, because there are steps dealers must follow before considering a suit.

DETROIT – Ford Motor Co. could spend nearly $500 million to shutter its Mercury brand, CFO Lewis Booth said.

In an interview with Automotive News, Booth said Ford took special charges of $247 million in the first half of 2010 to cover the cost of ongoing dealer reductions and shuttering the Mercury brand. He estimates the total cost to close the brand will be twice that amount.

About 700 of the 1,700 franchised Mercury dealers in the United States have signed agreements to close their stores in return for cash compensation, Booth said.

“The plan is in place and we’re having very fruitful discussions with our dealers,”

Booth said. No dealer lawsuits have been filed against Ford related to the shutdown of Mercury.

Ford announced in June that it would discontinue the 71-year-old brand by Dec. 31 and focus solely on the Ford and Lincoln brands. It expects to sell off all Mercury inventory before year end. Ford plans to end production of the Mercury lineup in early October.

DETROIT – Ford Motor Co. will begin the wind-down of Mercury production in late September. Ford wants to shutter the 71-year-old brand and dealer network by Dec. 31, Automotive News reported.

According to three dealers informed of the automaker’s plans, Ford will end production of the rear-wheel drive Grand Marquis sedan on Sept. 30, the Mountaineer SUV on Oct. 1, the Milan mid-size sedan on Oct. 2, and the Mariner small SUV on Oct. 3.

Ford spokesman Robert Parker said in an e-mail that Ford will end production of Mercury in the fourth quarter, but added, “we’ve not shared specific dates.”

Mercury dealers submitted their final factory orders last month. Those vehicles will arrive at dealerships in about 30 days. If dealers want additional stock after that, they must acquire vehicles from other dealers, according to several dealer sources.

Mercury had a 38-day supply of vehicles on July 1. Ford’s head of U.S. sales, Ken Czubay, has said he expects Mercury dealers to sell out of the lineup well before Dec. 31.

Ford announced on June 2 it would kill Mercury by year-end and concentrate on two brands — Ford and Lincoln.

There are 1,712 dealerships selling the Mercury brand in the United States, but no stand-alone Mercury stores.

Ford has offered dealers with Mercury franchises a cash settlement. But the dealers won’t be compensated until they sell all remaining Mercury inventory and close their franchise.

The compensation ranges from the low thousands of dollars up to about $1 million depending on the dealership.

DEARBORN – Ford Motor Co. today confirmed that it is killing its mid-market Mercury brand to focus its resources on its luxury Lincoln marque, The Detroit News reported.

“We are very proud of its history, but we are now looking forward,” said Ford Americas President Mark Fields, who promised that the nation’s 1,712 dealers would be fairly compensated for the loss of their Mercury franchises.

He said the company would work with them to make sure their remaining Ford and Lincoln franchises make up for the lost sales. “We absolutely remain committed to working with our dealers.”

There are no standalone Mercury dealers left. However, 276 of those stores are paired only with Lincoln, and Ford acknowledged some may have a hard time surviving alone.

Ford said no employees will lose their jobs as a result of the decision, which was ratified at a meeting of Ford’s board of directors this morning. It had been expected for some time; the brand has been losing market share in the United States since the 1990s.

“Our total market share for Mercury is eight-tenths of a percent,” Fields said, noting that Ford’s mass market Blue Oval brand has increased its share of the U.S. market by more than double that amount since the beginning of this year.

In fact, he said, Ford’s success is a big reason for the decision, as it gives the automaker the financial resources it needs to wind-down Mercury without undermining its stated goal of being “solidly profitable” this year. Ford made $2.1 billion in the first quarter.

The decision also is motivated by the need to invest more resources in Lincoln, which has struggled to hold its own in an increasingly crowded and competitive luxury marketplace.

“We’ve made a lot of progress with the Ford brand,” Fields said. “Now’s the time to do that with Lincoln.”

Ford CEO Alan Mulally told talk-radio host Paul W. Smith that he had “nothing to add” to the discussion swirling about the automaker’s Mercury brand, which is rumored to be killed off this year, MLive.com reported.

After two unnamed executives spoke to Bloomberg News about a plan to wind down Mercury, plagued by middling sales and a lack of brand identity, by July, Ford has yet to confirm or deny if the 71-year-old brand is on the chopping block.

“We continue to review all of our brands and all of our nameplates,” Mulally told Smith Tuesday morning before changing the subject.

In most dealerships, Mercury vehicles are sold alongside Lincolns, and killing the brand could hamper business at those lots. Ford is reportedly considering merging Lincoln dealerships with existing Ford dealerships.

Mulally has reportedly been adamant about killing off Mercury since taking over as CEO in 2006. Global marketing director Elena Ford, great-granddaughter of Mercury’s founder, Edsel Ford, has been one of the brand’s biggest supporters.