Cougar Slump Idles Plant

If there was ever any doubt about how fickle the small specialty segment buyer is, one need not look any further than what's happened to sales of the Mercury Cougar. After posting its single best sales month in May 1999, Cougar sales have been on a slide. The "latest and greatest" in this segment now is the redesigned Toyota Celica and Mitsubishi Eclipse, which means the Cougar may not be able to claw itself back to respectability without a refreshening.

After halting production for one day in March at the AutoAlliance International Inc. (AAI) plant in Flat Rock, MI, that builds the coupes, Ford is said to be considering one week layoffs in April, May and June as a way to trim massive inventories, workers at the plant say. Workers would receive 95% of their pay if laid off.

The temporary closure of AAI, a plant jointly owned by Mazda Motor Corp., also means production of the Mazda 626 will be temporarily halted. Sales of the 626 also are off pace.

"We are hurting a little bit and we have to look at a way to turn it around," a Mercury spokesman concedes, adding that additional incentives (now at $500) are under consideration but not likely. "We could throw money at it and turn it around, but I don't think that is going to happen."

Such a move would only increase losses, currently running more than $1,300 per Cougar sold, Ford sources say. Sales could receive a slight boost when the performance Cougar S goes on sale in September (not March as originally planned), but not enough to offset losses. Either way, Ford will need to find a way to turn sales around because Cougar is expected to remain in the Mercury lineup until calendar 2003.