News - Jaguar
Official: Ford sells Jag, Land Rover
Ford Motor Co to get only one-third what it paid for Jaguar and Land Rover brands
28 Mar 2008
INDIAN car-maker Tata Motors has finally concluded a deal with Ford Motor Company to take over its Jaguar and Land Rover brands.
Ford yesterday announced that Tata will pay US$2.3 billion in cash for the British icons, but will have to contribute about US$600 million to the Jaguar Land Rover pension plans.
The US$1.7 billion net result is about one-third what Ford paid for the two brands, having forked out US$2.5 billion for Jaguar in 1989 and US$2.75 billion for Land Rover in 2000.
Confirmation of the sale effectively ends Ford’s Premier Automotive Group, which was set-up by Australian Jac Nasser in 1999 when he was CEO of Ford but which, with last year’s sale of Aston Martin, will now have Volvo as its sole foreign luxury marque.
Ironically, another Australian – former Ford Australia president Geoff Polites – is currently the CEO of Jaguar and Land Rover. Although his future under Tata is unclear, Mr Polites is confident that the sale will benefit both brands and suggested there will be no major management clean-out.
“Jaguar Land Rover’s management team is very pleased that Ford and Tata Motors have come to an agreement today,” he said in a prepared statement.
“Our team has been consulted extensively on the deal content and feels confident that it provides for the business needs of both our brands going forward.
“We have also had the opportunity to meet senior executives from Tata Motors and the Tata group (and) they have expressed confidence in the team that has delivered significant improvements in Jaguar Land Rover's business performance.
“We feel confident that we can forge a strong working relationship with our new parent company, and we look forward to a bright and successful future for Jaguar Land Rover.”
No sooner had the announcement been made by Ford than word came through from India that Tata is not just looking to consolidate the famed brands, but is planning to expand both operations and greatly increase production in Britain.
As part of the transaction, Ford said it will continue to supply Jaguar Land Rover with powertrains, stampings and other vehicle components, in addition to a variety of technologies, such as environmental and platform technologies. Ford has also committed to provide engineering support, including research and development, plus information technology, accounting and other services.
In addition, Ford Credit will provide financing for Jaguar and Land Rover dealers and customers globally during a transitional period of up to 12 months.
Although the Tata industrial group began more than a century ago as a reaction to British colonialism in India, company chairman Ratan Tata indicated that he would respect the iconic brands.
“We have enormous respect for the two brands and will endeavour to preserve and build on their heritage and competitiveness, keeping their identities intact,” said Mr Tata.
“We aim to support their growth, while holding true to our principles of allowing the management and employees to bring their experience and expertise to bear on the growth of the business.”
Ford president and CEO Alan Mulally said that, while Jaguar and Land Rover were “terrific brands”, it was time to consolidate the company’s troubled core brand.
“We are confident that (Jaguar and Land Rover) are leaving our fold with the products, plan and team to continue to thrive under Tata’s stewardship,” said Mr Mulally.
“Now, it is time for Ford to concentrate on integrating the Ford brand globally, as we implement our plan to create a strong Ford Motor Company that delivers profitable growth for all.”
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