Word had leaked recently that Ford Motor Co. would be ending its Mercury line. On Wednesday it became official with the company announcing that it would cease producing the brand by the end of 2010.

The brand's popularity had faded years ago but Ford kept it around because... well it's not really clear why it kept it going all these years.

Mercury's loss means a gain for the Ford line as well as the Lincoln brand, however. Ford announced it would be expanding its Lincoln line, adding new vehicles and updating existing ones and also focusing some of the resources that would no longer be going to Mercury to its Ford line.

An excerpt from Ford's press release:

DEARBORN, Mich., June 2, 2010 — Ford Motor Company will expand and enhance its Lincoln brand lineup with seven all-new or significantly refreshed vehicles in the next four years as part of an aggressive growth plan focused on standout product design, class-leading technology and new powertrains — all aimed at competing with Cadillac and Lexus in North America.

Ford also will end production of Mercury vehicles in the fourth quarter of this year to fully devote its financial, product development, production and marketing, sales and service resources toward further growing its core Ford brand while enhancing the Lincoln brand.

The Detroit Free Press reports that Ford says Mercury's demise won't mean more closed factories or laid off workers, at least not at the manufacturing plants. Even salaried workers are said to be unaffected.

The situation at a number of Mercury dealerships is likely to be less sanguine. One interesting fact from the Free Press: Some Mercury dealers probably thought they had a chance because Ford told them earlier this year it was developing a new Mercury vehicle for them to sell.

A Free Press excerpt:

Ford has been encouraging Lincoln Mercury dealers across the country to combine with a Ford franchise wherever possible, but still has 276 stand alone Lincoln Mercury franchises. For many of those dealers, Mercury sales account for 50% or more of total annual sales.

Ford even told dealers earlier this year that it was developing a new Mercury compact car that would be called Tracer.

(Derrick Kuzak, Ford's group vice president of product development) said the fact that Ford was developing the Tracer shows that Ford truly was committed to the future of Mercury until this spring, when it reevaluated its business plan.

Fields said all Mercury dealers will be eligible for payments to compensate them for the loss of their dealerships. Ford said the amount of the compensation will vary according to the size of the dealership and other factors.

Ford has 1,712 dealers with a Mercury franchise.

Bob Tasca Jr., chairman of the Lincoln Mercury dealer council, acknowledged that the decision to terminate the Mercury brand will be difficult and emotional for many dealers.

"You have to feel sorry for the stand alone dealers, but I think that many of them will get through it and do well," Tasca said. "Some may not be able to survive it."