Ford Reviews Potential Sale Of Luxury European Brands

The Ford Motor Co. confirmed today that it is reviewing its position on the potential sale of Jaguar and Land Rover. Experts said that a potential sale could help the automaker curtail its losses.

John Gardiner, a spokesman for Ford's Premier Automotive Group which includes the two brands, said that Ford had been reviewing all of its operations for a year. "We are working with our financial advisers on the best options for Jaguar and Land Rover, and nothing is ruled out," Gardiner said. He added that there was no time frame for making a decision.


The Dearborn-based automaker’s review of the European luxury brands comes as it strives to return to profitability in the face of close competition from Asian automakers and shifting auto preference for more fuel-efficient cars in its key North American market. The company is slashing thousands of jobs and plans to close plants to reduce production costs.

It can be recalled that the automaker sold the Aston Martin, another part of the group, for $848 million in March. Some analysts said that the luxury brand did not fit into Ford's long-term survival plan for cost savings from developing multiple models worldwide on the same underpinnings.

In the first quarter, Ford posted a narrower loss of $282 million. The Premier Automotive Group (PAG) reported a record pretax profit of $402 million for the quarter due mainly to Volvo. Ford bought Jaguar in 1989 and Land Rover in 2000. The two businesses have about 19,000 employees in Britain. The Volvo timing belt could have been gripping quite tight to yield the advantage to be spared.

Geoffrey Robinson, a legislator representing Jaguar's base in Coventry, said that speculation about a sale was "was not news in the sense that... it was announced some time ago that they would be looking to do this. It seems to have moved on a whole gear now that they do have certain groups earmarked who might go forward and make specific bids.”

"Ford has got some huge problems on their own, really huge facing survival really on their hands. They actually don't have the management capability, never really had it, to make a success of Jaguar. And Jaguar could potentially be a great success story, as could Land Rover," said Robinson, the former chief executive of Jaguar Cars.

Prime Minister Tony Blair's office said that it was in touch with Ford about the review. "We still believe that both Land Rover and Jaguar are highly successful companies and will have a highly successful future," the prime minister's official spokesman said. British lawmaker Lorely Burt, who represents Solihull, home to Land Rover's assembly plant, said that legislators were told Monday night that Ford was "looking at all the options which may or may not include a sale."

"We are very concerned to hear these reports and we are seeking an urgent meeting with Jaguar/Land Rover," said Dave Osborne, the national officer of the Unite union. "We find it difficult to understand why Ford would want to sell a successful, growing and environmentally improving brand like Land Rover, and a marque like Jaguar, which is a significant player in the luxury market and one that Ford has invested heavily in."

Selling the brands would end a two-decade initiative to expand vehicle sales by acquiring European companies. Since 1998, before Ford acquired Land Rover and Volvo, its Lincoln unit has dived from number one in U.S. luxury sales to seventh. "This company desperately needs focus in terms of preserving its capital and concentrating its management resources," said John Casesa, a managing partner of Casesa Strategic Advisors LLC in New York. "It currently has too many mouths to feed."

By: Glady Reign

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Glady Reign is a 32 year old is a consultant for an automotive firm based in Detroit, Mi. she is a native of the motor city and grew up around cars hence her expertise in the automotive field. You can visit Volvo timing belt for more information.

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