Ford Opens Doors For Jaguar, Land Rover Bids
|Topics: Ford Motor Company, Jaguar, Land Rover
July 24, 2007
The recuperating Ford Motor Co. is opening its doors to welcome eager bidders. The automaker has finally decided to take that crucial step to let go two of its precious European brands included in the Premium Automotive Group (PAG).
The Dearborn-based automaker received last Thursday an undisclosed number of opening bids for its Jaguar and Land Rover British luxury brands, reported the Associated Press. Thursday was a deadline to submit early bids, but the automaker said no sale is imminent.
“We've had contacts from third parties, and we're actively evaluating them as part of our strategic review,” John Gardiner, a Ford spokesman, said Thursday. “They've only been preliminary discussions, and no decisions have been made.” Gardiner refused to divulge the number of bids and who submitted them.
In 2006, the second largest American automaker lost $12.7 billion and $282 million in the first quarter of 2007. The automaker has slashed thousands of jobs and closed several plants in an effort to reduce production costs. Analysts say the automaker in is need of liquid assets to sustain its turnaround plan and eventually return in the black. As such, it is selling the European brands to raise money for the improvement of Ford parts, production and business structure.
Ford sold its Aston Martin brand, also part of PAG, for $848 million in March. Now, the automaker is selling Jaguar and Land Rover. There is also a hot speculation that the Dearborn-based automaker would likely sell Volvo Cars, its Scandinavian brand. The rumor, spreading like wildfire, is still eliciting diverse speculations among auto industry watchers.
A company official who spoke on condition of anonymity because the bidding process is confidential said Thursday that preliminary bids have been submitted only for Jaguar and Land Rover, and that the company did not take bids for Volvo.
Paul Newton, an analyst in London for the Global Insight automotive research firm, said that he expects Jaguar and Land Rover to be sold separately because of Jaguar's losses. “Ford may even have to pay or assume liabilities to get Jaguar off its books,” he added, “but Land Rover is a reasonable value for a buyer. I don't think anybody's going to bid cold, hard cash for Jaguar.”
Newton noted Ford would like to find a buyer or buyers who would preserve the Jaguar and Land Rover heritage and jobs in the United Kingdom. Ford, which is the top auto seller in the U.K., does not want to rankle its British customers, Newton said in an interview with The Press.
Ford said Thursday that it has had contact with interested parties for its Land Rover and Jaguar luxury brands and is evaluating the level of interest, Reuters reported. “We have had contact with interested parties,” said Gardiner. “We are actively evaluating the level of interest.”
Quoting a company spokesman in Seoul, Bloomberg News reported Wednesday that Hyundai had no interest in acquiring another auto brand. Meanwhile, The Financial Times said that Renault of France and Nissan of Japan had decided to inhibit in the opening round of bids.
The International Herald Tribune said Ford had asked potential bidders to make themselves known by Thursday. A variety of companies, including private equity firms and possibly other automakers, have been preparing bids, continued the Tribune report.
The Tribune reported bidders were expected to include Cerberus Capital Management, the investment group that purchased the Chrysler Group in May. Other potential bidders include Ripplewood Holdings, a group led by Thomas Stallkamp, the former president of Chrysler. One Equity Partners, another investment firm whose senior partners include Jacques Nasser, former Ford CEO, may also participate in the bidding process.
|Connect with The Crittenden Automotive Library|