Toyota and Tesla jointly announced a new joint venture to develop and build electric vehicles (EVs). As part of the deal, Toyota will invest $50 million in Tesla, and Tesla buys the New United Motor Manufacturing Incorporated (NUMMI) factory in California. The NUMMI plant was previously a joint venture of Toyota and General Motors. The NUMMI plant, in Freemont, California, began production in 1984 after being a “regular” GM plant from 1962-1982. As a NUMMI plant, it produced vehicles such as the Chevrolet Nova, Pontiac Vibe, Toyota Tacoma and Toyota Corolla. Tesla plans to produce the Model S, which Tesla expects to be the world’s first all-electric sedan, at the plant in 2012. They also said other future Tesla vehicles would be produced there.

The announcement was short on details, with the usual fluffery where Toyota said how great Tesla is and vice versa. The full text of the joint announcement is below.

Bloomberg is reporting today that Ford plans to kill the Mercury brand - again. At least twice in the last decade, Mercury was on the chopping block, only to be given a stay of execution. The Ford family, specifically Elena Ford, has vetoed efforts by management to kill off the brand in the past.

Mercury was created in 1939 by Edsel Ford as a bridge between the mainstream Ford brand and the luxury Lincoln brand. Mercury products have lately been nothing more than Fords with more features and (slightly) fancier styling. Mercury’s present lineup shows this: Milan (Fusion twin), Mariner (Escape), Mountaineer (Explorer) and Grand Marquis (Crown Victoria). The last time Mercury had a unique vehicle (not shared with a Ford) was in 2002, when Mercury last sold the Cougar and the Villager minivan (though the Villager was engineered by, and shared with, Nissan).

In 1999, Ford planned to kill the Mercury brand by phasing out the lineup and eventually “encouraging” Mazda dealers and Lincoln dealers to dual with the other brand. They saw Mercury sales dwindling and Mazda sales going in the opposite direction. The plan was set, and the future product (”cycle”) plan was modified to reflect Mercury’s demise. Then the company got cold feet. A powerful combination of the Ford family and Lincoln Mercury dealers killed the plan before it really got going. The Ford family opposed it due to sentimental reasons (the tragic story of Edsel and Mercury being his creation was a big part), while the dealers didn’t like the idea of selling Japanese cars.

Many at Ford had already mentally written off the Mercury brand, and the reversal left Mercury without a plan for future products. Instead of taking the opportunity to “reboot” the brand into something other than fancy Fords, the company went back to the old ways and hastily threw some money at Fords with different lights and grilles. It was a self-fulfilling, defeatist attitude that went something like this, “Mercury sales suck, so let’s not spend too much money on Mercury products. That way, we won’t have to sell too many to get a return on the money.” Of course, spending very little on badge-engineering ensured the sales would suck, and the geniuses who made the decision patted themselves on the back for not spending the money (”See, I told you the sales would suck - aren’t you glad we didn’t spend the money?”).

Ford missed an opportunity to have its cake and eat it too. Ford had (and still does have) wonderful products in overseas markets around the world that it could have used to give Mercury unique products without the cost of developing a stand-alone product for Mercury. Ford could have assembled a collection of Ford’s European and Asian products, including some vehicles that Mazda sold in Japan, but not in North America. There would have been costs associated with homologation and importation, but nowhere near the costs of engineering a new product from scratch.

Again in 2005, Ford looked at eliminating Mercury. Detailed analyses of sales volume and profit & loss were presented to senior management, but again, the idea was crushed. There were fears of Lincoln Mercury dealer profits and the heavy hand of the Ford family was in the middle somewhere.

Since Alan Mulally showed up, Mercury has seen its lineup shrink to the present 4 vehicles mentioned above. And now Ford is apparently going through the same exercise again. So what’s different this time? Mulally and the cash situation are the major ones. Mulally isn’t so tied to the past and will make the decision that is best for the company, regardless of sentiment. Also, while Ford is doing better than just about anybody in the industry right now (though that isn’t saying much), they still have a tremendous amount of debt to consider, and cash is tight.

What about the dealers? The Lincoln Mercury dealers have made the argument in the past that they wouldn’t have enough volume to survive if Ford pulled the plug on Mercury. Is that still true? Lincoln has, arguably, its best lineup ever right now, but is it enough to keep the dealer body healthy? They have 6 vehicles for sale (MKZ, MKX, MKS, MKT, Navigator and Town Car), but the Town Car goes away completely after the 2011 model year. That leaves 5 mostly alphabet soup names and a giant SUV. For the dealers’ sake, I hope that the pipeline is full of new Lincolns and freshenings of existing models.

Even assuming that Ford can keep the dealers happy and profitable with just Lincoln, does Mercury really need to go the way of Plymouth, Saturn, Pontiac, et al? I have the same argument against pulling the Mercury plug as I did with Pontiac. Why pull it? Mercury could remain as a niche product, with maybe 2-3 vehicles. If Ford really does have a plan for Lincoln, the dealers wouldn’t be reliant on the Mercury volume, so there would be no need to have a full lineup of Mercurys. Engineering/R&D are only approved for programs that can pay back the investment anyway, so that wouldn’t be an issue. There is already a distribution network, so that’s OK too. Assembly plant capacity could be an issue, but if Ford can utilize existing platforms for Mercury (without relying on badge engineering), it should be able to use existing plant capacity as well. The only other consideration is advertising. In the auto industry, most advertising is for vehicles, not brands. There would only need to be advertising for the vehicles that you are offering, and everybody knows what a Mercury is already, so no cost to “launch” the brand.

I know this isn’t a strong argument for why Ford should keep Mercury, but an argument for why they shouldn’t feel the need to kill it. The Mercury brand has survived 70+ years. It would be a shame to allow it to die now for the wrong reasons.

That’s what I think - how about you? Please leave your comments below!

First, Chevrolet took some of the work from Campbell-Ewald, their ad agency for 91 years. Campbell-Ewald was Chevy’s partner for almost their entire existence, and was responsible for memorable ad campaigns such as “See the USA in Your Chevrolet”, “The Heartbeat of America”, “Like a Rock” and “American Revolution”.

Chevy gave the car and crossover work to Publicis late last year. Then, 4 weeks ago, Publicis was given the rest of the Chevy account.

Now, there’s a new sheriff in town, and he likes Goodby, Silverstein and Partners, so they now have the Chevrolet account all to themselves.

Certainly, GM and Chevrolet have the right to change their agency every week if want. But the awarding of multi-million dollar agency contracts shouldn’t be subject to the whim of the executive du jour. It should be based on some criteria that makes business sense. Publicis didn’t have the business long enough to have made any mistakes, and the awarding of the business to Goodby Silverstein and Partners happened too fast after the arrival of Joel Ewanick to have been the result of a true review. In fact, Goodby Silverstein and Partners had the Hyundai business while Ewanick was there. Coincidence? Hardly.

Chevy made the announcement today with the following statement:

All advertising work for the Chevrolet brand in the U.S. has been awarded to Goodby, Silverstein and Partners, moving from Publicis Worldwide and Campbell-Ewald.  This transition will begin immediately.

“Based on my personal experience working with Goodby, Silverstein and Partners, I’m confident they have the creativity and ability to take the iconic Chevrolet brand to the next level – and to do it fast,” said Joel Ewanick, vice president, U.S. Marketing.

“Chevrolet is focused on fuel-efficient cars, crossovers and trucks, as well as innovative advanced-technology products like the Volt.  With the Volt and the all-new Cruze launching later this year, we look forward to working with Goodby, Silverstein and Partners to build on the momentum that Chevrolet already has going in the market,” said Jim Campbell, U.S. vice president, Chevrolet Marketing.

Goodby, Silverstein and Partners will open an office in Detroit to support the Chevrolet account.  The agency worked with GM’s Saturn brand from 2002 until 2007.

Jeep released images yesterday of the all-new 2011 Jeep Grand Cherokee, which went into production this week atChrysler’s Jefferson North Assembly Plant in Detroit. This is the 4th generation of the Grand Cherokee, originally introduced in 1992. It is completely reengineered and redesigned for 2011 – with a new sculpted body, athletic profile, panoramic dual-pane sun roof and an interior with premium soft-touch materials. The 2011 Jeep Grand Cherokee features Chrysler’s all-new 3.6-liter Pentastar V-6 engine that boasts an 11 percent improvement in fuel economy and delivers up to 23 mpg and more than 500 miles on one tank of gas. Capability highlights include a choice of three 4×4 systems, new Jeep Quadra-Lift™ Air Suspension and Selec-Terrain™ systems and towing capability of 7,400 lbs. On-road dynamics are improved courtesy of new independent front and rear suspension systems and a new body structure that dramatically increases torsional stiffness.

Jeep Grand Cherokee Laredo 4×2 models start at a sticker price of $30,995 - $495 lower than the outgoing model. Grand Cherokee Laredo 4×4 models start at $32,995 - $465 lower than the outgoing model. The Overland model is the top of the line, with a price of $42,995 in 4×4 guise. The Limited model slots in between. The 2011 Grand Cherokee arrives in Jeep showrooms next month.

It is hard to overstate the importance of this product launch to Chrysler. Before Fiat’s present management, Chrysler was run by Daimler, which cost-cut the products into irrelevance, and then Cerberus, which cut the cupboard bare of new product investment. There is very little new product coming in the short-term, so it is very important that the new launches it does have are home runs. Chrysler plans to make improvements to just about every product in the next year, but no major launches outside of the Grand Cherokee and the Chrysler 300/Dodge Charger due later this year until Fiat-based new products start coming next year and the year after. The Grand Cherokee looks like a winner, but SUV sales are down overall, which will limit the sales potential. Ford and GM, though, have abandoned the true, off-road (mid-size) SUV market, leaving the market to Jeep, Nissan (Xterra & Pathfinder) and Toyota (4Runner).