It's a strategy that has served Harley-Davidson well. The hottest segment in motorcycles are cruisers, bikes styled along the lines of the '50's machines. The closer the machine emulates that style, the more successful it is.
Ford has been trying for years to make Mercury work (80's Capri, 90's Capri, the last Cougar), but has never hit the target. The basic premise is to sell a vehicle that is similar to the Ford model, at a higher price. The only way to achieve this that I see is to go in a new direction from what's been done in the past, and it means heading towards the past.
Imagine a Ford 500, except retro-styled. The basic platform remains the same, but the styling is a virtual copy of the Mercury models from the 50's. The cost savings would not be as great as the current models, as the exterior and interior would be different from the Ford, but the potential to make a larger profit is greater also, and they'd be targeting the market group that Mercury is looking for.
Mercury could become the Harley-Davidson of the automotive world. It can't do any worse than what's already been done with the marque.