(May 31, 2010) DETROIT — Ford plans to kill the 71-year-old Mercury brand slowly by starving it of product, two sources tell industry publication Automotive News.

Ford leaders plan to propose eliminating Mercury to the board of directors in July. They believe Ford no longer can justify the cost of supporting Mercury in light of the brand's declining volume, the sources say, according to Automotive News.

The company has been laying the groundwork for eliminating Mercury for years.

Decades ago, Lincoln dealers were encouraged to add Mercury franchises to give them the volume they needed to survive. In recent years, Ford has pushed consolidation of those dealerships into Ford-Lincoln-Mercury stores. Those dealers now derive their volume from Ford brand sales.

At the end of 2009, Ford Motor had 1,780 Mercury franchisees, but there were only 292 stand-alone Lincoln-Mercury stores. There are no stand-alone Mercury stores. Lincoln-Mercury dealers sold 175,146 vehicles in 2009; only 92,299 were Mercurys.

Ford also has eliminated separate Ford and Lincoln Mercury divisions within the company. It has merged the Ford and Lincoln Mercury dealer councils. Some Mercury franchisees say that Ford has stacked the Lincoln Mercury side of the council with dealers who also have Ford stores.

"They were at least signaling this a year or so ago," says a Ford dealer who asked to not be named.