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Ford: British brands must go

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Ford: British brands must go

Company says it will not retain stake in either Jaguar or Land Rover after the luxury units are sold.

Bryce G. Hoffman / The Detroit News

Ford Motor Co. does not plan to retain a stake in its Jaguar and Land Rover brands once those units are sold, according to Lewis Booth, head of the automaker's European operations.

Addressing analysts in Frankfurt Wednesday, Booth said Ford hopes to complete the sale of its two British luxury brands by the end of the year -- or the beginning of 2008 at the latest. Sources close to the situation told The Detroit News that Ford has asked prospective buyers to submit their final bids by the end of this month.

"We're selling the business because we need the money and we need the focus," Booth said. "So, we're not going out there with the intention of keeping an equity stake."

Ford kept a small stake in Aston Martin when it sold that brand earlier this year.

Booth added that Ford is continuing its "strategic review" of its other European luxury brand, Sweden's Volvo, and hopes to complete that process by year end.

Ford CEO Alan Mulally has said Ford does not need a global luxury brand to compete internationally, and instead wants to focus on reviving the company's core Blue Oval brand.

In a meeting with reporters in Dearborn last month, Mulally said he wants all of Ford's management concentrated on that goal.

But analyst Erich Merkle of IRN Inc. said it is unlikely that Ford will be able to divest itself entirely of the two British brands because their products incorporate many Ford components.

"Nobody in their right mind would want to buy Jaguar or Land Rover if Ford was not able to supply parts for them," he said. "But, from Ford's perspective, there's probably no benefit in keeping an equity stake in them."

According to people familiar with the situation, Ford has already received preliminary bids from at least one British private equity group, as well as several U.S. private equity firms, including Cerberus Capital Management LP, Ripplewood Holdings LLC and One Equity Partners LLC, the private equity arm of JPMorgan Chase. Two Indian car companies -- Tata Motors and Mahindra & Mahindra -- have also expressed interest in buying the Ford properties.

Volumes are up at Land Rover. They are down sharply at Jaguar, but Booth said that is according to plan. And while Jaguar continues to lose money, Booth stressed that Land Rover and Jaguar combined are profitable.

Booth said that, as a whole, Ford is doing well in Europe. "We expect Ford of Europe to be profitable in 2007 for the fourth consecutive year," he said. "We're running our plants in Europe at 100 percent manned capacity."

He said Ford is planning to add more capacity at its factory in St. Petersburg.



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Would Ford need to keep an equity stake in these companies to supply parts for them? I'm not making a comment; I'm asking because I really don't know.

I agree that Ford needs to down scale. It got too cocky and expanded itself way too far beyond its resources. I would still keep Volvo. It gives Ford a luxury (or semi-luxury) brand to sell in foreign markets. Lincoln is currently in no shape to compete in the global luxury market (and it will take some time to get them ready). Also, Volvo has made major contributions to product development and platforms used throughout the Ford corporation and seem to be much more integrated into Ford's corporate structure than Jaguar, Land Rover, and Aston Martin were. It seems that it would be much more difficult to detangle Ford from Volvo than the other members of Ford's former Premier Automotive Group. I would only sell Volvo if Ford absolutely needed to.

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This is sad. Really f***ing sad. I guess I'm just selfish.

Especially with Jaguar coming out with the new XF.

So, those of us who actually purchase premium autos, and at the same time want to "support the country we live in" will have the CTS as our ONLY choice (or Escalade if you need a massive SUV/a.k.a. Suburban with better leather).

As an aside, keeping Volvo (and with GM division Saab) we have access to some decently average entry-level lux models (Saab's only real offering in this category is the 9-3, everything else they offer is demonstrably substandard).

The catestrophic loss of access to Land Rover and Jaguar will simply destroy the choices of a lot of people have. And, by saying "people," I mean those who are actually *aware* of the consequences involved in purchasing an auto. The number of those "people" are dwindling, anyway. So, great choice, FORD.

BMW, here we come.

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It's very sad...

It's typical: an american company pours a lot of investment into a $h!ty brand or two, finally gets the product right, excellent and where it needs to be, then gets shafted out of said company.

Detroit might be a lot better off had they not been proping up euro brands for the last 15 years (GM-Saab, Ford-Jag & LR, Chrysler-MB)

I guess I'm just a bit pissed off because Ford FINALLY has Jag & LR structured to where they'll probably gain money and share, yet Ford now has to sell them after ALL that investment.

*IF* Ford sells LR and Jag, then they need not phase out Mercury. If they only have Ford, Mercury, Lincoln, Mazda and Volvo then there is plenty of room to rebuild that division.

I'm sure though, in typical WALL STREET fashion Ford will just give up and sell LR and Jaguar, divest Volvo and kill Mercury only to continue a slow painful death of the entire company over the next 10 years.

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