Ford sells Jag/LR for loss

[Bossxr8]

Ford has sold Jaguar and Land Rover to Tata for less than a third of what they paid to buy the brands originally. Good work. But they have an argreement to continue supplying parts and engines, as well as providing them with R&D access to Ford as well as shared components.

Why would you sell them at a loss, surely they would have been better to keep them now that Land Rover has become profitable and Jaguar are on their way with the XK and XF. Surely this has to of been one of the worst business decisions ever made, spend billions on both brands and then dump them off for only 1.6 billion. No wonder Ford NA is in such a bad state with geniuses like this running the place.

I understand dumping Jaguar since they have never made a profit since Ford bought them, but they still should have kept LR.

[Windsor220]

They probably need as much money as they can get atm. Atleast they can rid of LR's poor rep too.

[Auslandau]

They would have only done this for long term reasons. Better to off load and then make a deal back to the new owner for product that may give them more profit in a shorter period of time. In breif it may look bad but in both short and long terms it will please the banks/creditors no end, even with the initial loss.



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[KBBossedXR]

This is the situation Ford are in World Wide, it was a forced sale as they had to make this decision to keep the company heading in the right direction. You watch this Indian Business man turn the Jag & land Rover fortunes around.

[LeadFoot81]

BossXR8 making a decision like that shows they had no choice, they had to offload the two and need the money. Better to make an instant x billion now, than have a slow trickle of money coming through, preserving the Ford brand is more important at the moment. Seems to me the bad decision was buying them in the first place!

[Nikked]

I just hope they don't sell Mazda.

[Ives]

So Jags will now be built in India?

[Paxton]

Originally Posted by Ives

So Jags will now be built in India?

Are they built in America now?

Nothing will change, except for the owners.

There are bits of good news here, as there is an Engine Supply contract. FoA may yet get their JLR Diesel.

[fmc351]

From what I heard they will continue to be made at their current locations. I also heard the 1/3 price is probably a nice way of looking at it, what I heard was they sold both companies for less than they paid for Jag alone.

[KBBossedXR]

Just looked up some figures

Ford bought Jag in 1989 for $2.5 Billion & Landrover in 2000 for $2.73 Billion

They sold them to Tata for $2.2 Billion

They now have to pay $600 Million to workers pensions

It also points out that Ford have lost over $15 Billion in the last 2 years

[Tles]

Jaguar is a marque on the rise and more than expected are coming across from BMs, Mercs and Audis to Jaguars on the strength of passion versus clinical blandness, some were as exciting as a Lexus and built nowhere near as well.

The other thing I must say is that while Jaguar is guaranteed business as usual until 2011, they are already stating that they are looking at a new business model. This is based on less build volume more profit per vehicle, and quoting Porsche as a benchmark business model - darn fine idea chaps, maintain exclusivity and desirability.

Rumour has it that Tata has purchased 100s of hectares to build Land Rovers a fair bit south east of Solihul closer to Delhi. Other rumours are that LandRover is staying and Jaguar will be off to Fiat. At least this is not all that boring anymore...

Jaguar XF rocks BTW

[Tles]

Tata are also getting the Rover, Daimler and Lanchaster name plates. Daimler was a given in that a Daimler 8 is a extra luxury Jaguar XJ.

[chevypower]

I think both companies would have been huge liabilities for Ford. It was probably a good decission to take what they have learnt from the two companies and get rid of them. I think Ford will concentrate on global products under the Ford and Lincoln brands. I think they will axe the Mercury brand, but keep Mazda. I think Ford and Mazda cars will continue to share platforms and drivetrains.

[HSE2]

Black day for me.

[mik]

Originally Posted by chevypower

I think both companies would have been huge liabilities for Ford. It was probably a good decission to take what they have learnt from the two companies and get rid of them. I think Ford will concentrate on global products under the Ford and Lincoln brands. I think they will axe the Mercury brand, but keep Mazda. I think Ford and Mazda cars will continue to share platforms and drivetrains.

your on the right track i think , one way or the other Ford has to get rid of companies that are running at huge losses each year.

[Buddy 1]

Damm another win for a third world Country while we struggle to hold on to a Manufacturing Industry !
The main reason these sort of Countries can do it is at the expense of its workers (cheap labour).
How many Indians live in poverty.
We should put a stop to all this sort of thing & not accept all these imports from these sorts of places in particular Korea & China.
It will come back to Bite us one day & I do not mean just in losses of Jobs for us.
An Indian Jag :

[uranium_death]

Originally Posted by Nikked

I just hope they don't sell Mazda.

Mazda is flying.

There is no way they're going to offload Mazda.

Mazda dropped their cardigan brigade by dropping the old "x2x" labels and made it single numbers. Completely reinvented the brand.

If Ford dropped Mazda, I'd be worried.

[old_phoon]

There was a quote in the motoring press that maybe Ford would have been better off selling Ford and keeping Jag / Aston / LR - Ford spent billions getting these right and then sold them!

[Tles]

Both companies were actually making money now that they had almost completely reinvinted thmselves under the Polites and co stewardship. Shows what can be done when car people are left running car companies instead of 'business' management who seem to be looking to paint he rosiest picture of themselves before moving on, before the brown stuff they cause comes back too hurt and starts sticking.

Now that the new platforms and technologies are in place, both Jaguar and Land Rover need to continue to be run from a product driven profit per unit versus cost reduction over more volume. To are large extent, so does Ford.
More product variety with more shared quality parts under the skin rather than more units of the same product with too much underdeveloped variety under the skin.
Both Nameplates (not brands) need to be run now with TLC and they will become legendary again, so selling them now seems the only choice.

Mullaly seems to understand that Ford needs exactly the same focus on quality vehicles to drive and own. The transition from a family driven company with spirit and intuition to a managed global business leviathon has cost Ford dearly and now it is time to 'bring back the love' or Ford will become increasingly irrelevant and fade away like BMC.

[Bossxr8]

Originally Posted by The_Fantastic_Ford

Seems to me the bad decision was buying them in the first place!

You got that right, the amount of money they must have poured down the drain with Jaguar to never recieve a profit must be staggering.

[jaydee]

Well if they were to be made in India too they would be a hell of a lot cheaper.
Labour is cheap and the workers exploited to the max.

[suttoinc]

Originally Posted by TTonka

Tata are also getting the Rover, Daimler and Lanchaster name plates. Daimler was a given in that a Daimler 8 is a extra luxury Jaguar XJ.

Wasn't it only a year or two ago that Ford bought the Rover name so that some indian or other asian company didn't get it and tarnish the name? I suppose they don't have to protect the Land Rover name any more but it still seems like a waste of money anyway.

[Homer1]

Originally Posted by Buddy 1

Damm another win for a third world Country while we struggle to hold on to a Manufacturing Industry !
The main reason these sort of Countries can do it is at the expense of its workers (cheap labour).
How many Indians live in poverty.
We should put a stop to all this sort of thing & not accept all these imports from these sorts of places in particular Korea & China.
It will come back to Bite us one day & I do not mean just in losses of Jobs for us.
An Indian Jag :

Korea?? You do realise Korea is no longer a 3rd world country and hasn't been for the last 20 years. Their standard of living and infrastructure is actually much higher and superior to ours.

[Paxton]

Originally Posted by suttoinc

Wasn't it only a year or two ago that Ford bought the Rover name so that some indian or other asian company didn't get it and tarnish the name? I suppose they don't have to protect the Land Rover name any more but it still seems like a waste of money anyway.

That was with the purchase of MG Rover. Ford purchased Rover, so the new consortium (Nanjing Automobile) didn't make any Rover SUVs (which Land Rover does). It wasn't so much to stop the name being tarnished.

TTonka - I've heard the same thing about the XF. My dad couldn't stop raving about it, and all he drove was the Diesel.

[Wally]

Originally Posted by Bossxr8

You got that right, the amount of money they must have poured down the drain with Jaguar to never recieve a profit must be staggering.

You know accounting is a funny thing. Sometimes subsidiary companies show bogus losses, because the parent is transferring profit into or costs from it's P&L. Apart from the smoke and mirrors it can also derive taxation benefits, grants, etc..

Selling at a paper loss avoids capital gains.

[ingall9]

I was at the Land Rover 60th in Cooma over the long weekend and the General Manager of LR Australia gave a talk at the awards dinner and he was very tight lipped about the whole thing, more details have been released since i know. I think Ford was hemeraging money all over the place and the only part they could sell to recoup some of that was the 2 marques that were making them money, seems very silly i know. Its like being a car dealer and deciding not to stock the model you sell the most of. If i was high up in ford i would have been looking at the areas that were losing money and sorting them out, not selling the good bits to keep the crap stuff afloat for longer.

[irlewy86]

Originally Posted by ingall9

I was at the Land Rover 60th in Cooma over the long weekend and the General Manager of LR Australia gave a talk at the awards dinner and he was very tight lipped about the whole thing, more details have been released since i know. I think Ford was hemeraging money all over the place and the only part they could sell to recoup some of that was the 2 marques that were making them money, seems very silly i know. Its like being a car dealer and deciding not to stock the model you sell the most of. If i was high up in ford i would have been looking at the areas that were losing money and sorting them out, not selling the good bits to keep the crap stuff afloat for longer.

True...... unfortunately the divisions that blew out and fell on their face have to be kept open because of the huge redundancy payouts owed to the employees.

Besides, could you imagine FoMoCo selling off its Ford divisions in the US and making Jags, LR's, Volvo's and Mazda's.