According to Automotive News, the deal is done. Today Ford signed a deal with India-based Tata Motors to sell its Jaguar and Land Rover brands for over $2 billion. Ford will supposedly announce the deal officially tomorrow (Wednesday), but sources close to the transaction say the receipt's already been printed, so to speak. While details are scarce, AN does mention that Ford will pump around $598 million into the pension funds for each brand as it sends them on their way. We're waiting to hear more details about how Ford will continue to supply engines and components for these vehicles, for how long and how much. Right now, however, mum's the word, as the Blue Oval has only said that, "our first responsibility is to communicate with our employees." Sorry if they heard it here first, but then again, they should be working now, not reading Autoblog. Right? Right.
UPDATE: Just-auto puts the price tag at $2.65 billion, and reveals we should have official news from Ford before the NYSE opens tomorrow morning.
[Source: Automotive News, subs. req'd]
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Reader Comments (Page 1 of 2)
RPM @ Mar 25th 2008 3:42PM
This is good news, but still waiting for the official release from Ford.
Tagg @ Mar 25th 2008 3:46PM
Hooraay!!! Finally this is over and Ford will be able to dump these two pointless money pits and actually get something for them!! Now Ford has some money to put into marketing for customer research that will lead to new product. Pair that with the new labor contract and things might start to roll a little for them.
It will be intersting to see how long TATA will hold onto Jaguar because many industry analysts say TATA only wanted Land Rover.
Out of curiosity does anyone think that this sale will make GM take a look at dumping their own money pit SAAB? It seems that SAAB has done very little under GM and seems to be more trouble than its worth.
British_Rover @ Mar 25th 2008 4:13PM
Do you realize that Land Rover made over ONE BILLION dollars last year even when combined with the small 100ish million dollar loss from Jag? The loss at Jag will be even smaller last year and if the XF does well Jag might actually make a profit. Land Rover sales will be up globally but most likely flat in the US. There isn't any new product to launch in the US and since the US is a mature market Land Rover will have a tough time topping last years record sales.
A couple of billion dollars extra for Ford doesn't really do much for them and if they really had to dump 1.2 billion into LR/Jag to cover pension shortfalls.
British_Rover @ Mar 25th 2008 4:17PM
Meant to say he loss at Jag will be even smaller next year obviously
LDMAN @ Mar 25th 2008 5:26PM
Part of the blame for the state of Jaguar lies with Ford/PAG/Reitzler/20+ years mismanagement/X-Type Mondeo Fiasco.
The US$ 1 Billion nail in the coffin X350 (XJ) can be attributed to Jag's inbred Brit/Midland culture as in "We make cars for our dwindling/aging base of customers. Damn the rest. We know better."
Tata will probably hang on to Jaguar for PR reasons but will "lease" it to Alfa and any other manufacturer looking for technology / platform, etc...
Most of the Rover (Leyland) top guys are already working for Cherry, NAC, etc... I predict that some of the Top Jag guys will ultimately get top jobs in China, Turkey or India (Marutti, Koch, Tofas, etc..).
Land Rover? Land Rover made plenty of cash for Ford. However, the LR brand as we knew it is dead (b*lls out Camel Trophy replaced by Metrosexual G4).
Let's from now on talk solely about RR. That is where the money is and will be.
Luxury good are pretty impervious to market conditions. Only hurdle is to get the CAFE/EU CO2 numbers down in the future. That could be achieved by selling more small engines in the US, EU OR merging with a high volume low CO2 Manufacturer hence the potential tie up with Alfa, Fiat, and Tata combined speculations in the press.
Hybrid, Aluminum, start/stop technology will help.
Land Rover might disappear with Defender. LR2 and LR3 are not proper LR nor are they proper Range Rovers. They are mutants in between LR and RR.
The Range Rover, RR Sport, RR Mini, RR LRX Tart whatever will live on and make money for Tata.
Tagg @ Mar 25th 2008 9:17PM
I am not trying to be a jerk but please show me where Land Rover made over $1 billion. From what I have Ford usally doesn't post individual brand profits or losses.
Regardless, Ford was never going to recoup the amount they put into Jag so and the best way to get rid of it was to pair it with a brand that made money.
Here is an article from late December that illustrates the point I was making.
http://news.bbc.co.uk/2/hi/business/7154286.stm
British_Rover @ Mar 26th 2008 11:21AM
Easy enough to do just search on Google for Land Rover 1 billion Profitable.
http://www.leftlanenews.com/report-jaguar-and-land-rover-now-profitable.html
Someone leaked the info and the UK magazine Just Auto picked it up. Even before that story though top gear had an article claiming the same thing back in the fall. The figured Land Rover made between 500 million and 1 billion dollars. I can't find the Top Gear Blog post anymore so it might be too old but you can try looking for it on Top Gear's website.
http://www.reuters.com/article/businessNews/idUSN0817107620070108
Older article for you to see.
and another
http://www.caradvice.com.au/9583/jaguar-and-land-rover-profitable/
Tagg @ Mar 26th 2008 6:13PM
Fair enough, but Ford also put alot into Land Rover and the line-up is aging. Ford does not have the money or time to redo a small volume brand while the bread and butter brand needs the attention and resources more.
Paul P. @ Mar 25th 2008 3:49PM
...and then there were five:
Ford
Lincoln
Mercury
Mazda
Volvo
I guess this means Ford and Mazda are the base level cars, Mercury the Intermediate, and Lincoln/Volvo are the luxury brands?
Moe @ Mar 25th 2008 5:40PM
I'd put Volvo between Mercury and Lincoln somewhere. It's never been a real luxury brand IMO.
User @ Mar 25th 2008 6:22PM
If Ford was a smart corporation (which they haven't been for a long time), they would scrap Mercury. It should be Ford, Lincoln and Volvo. Ford has to DIFFERENTIATE Ford and Lincoln heavily. As time move on and Lincoln becomes much better, they should scrap Mercury. They're still using an old business plan that only worked for a couple years many decades ago. They always do this, this is why they always need bailouts.
User @ Mar 25th 2008 3:53PM
From a company that ruined the two to a company that will ruin them even more.
Yaroukh @ Mar 25th 2008 6:36PM
CongraNulations, this must be one of the lamest comments today.
User @ Mar 25th 2008 7:45PM
Congratulations, you must be the biggest fan of brand loyalty. You should make your profile private so I can't read all of your comments...
You wrote:
"Mar 12th 2008 4:01AM
Why homo? Is it because he wants a car that has been made in US?"
Do you know why the American car companies are doing poorly? Because they aren't addressing what consumers want. Not because they're American and everyone hates our things. So start thinking like a real American and address the problem, don't just ignore it or defend it.
CUBSWILLWIN @ Mar 25th 2008 3:54PM
now our fellow Indians can show what we have stored inside. We can reach market domination!:P
In a seripus matter, congrats Tata. They haven't been in the market for a very long time and already they are creating amazing things. If you are a car fanatic, you would know that Tata is in development for a car that runs on solid air aiming for '09. Tata is turning out to be an amazing company especially now that they have jaguar and landrover. They can expand out of India. Big gain for Tata and a bigger gain for India too. India hasn't been much of an industry topper for a long time, after one of the biggest revenue makers in the world, Reliance. Way to go Tata really.
CUBSWILLWIN @ Mar 25th 2008 3:54PM
meant to say serious :-)
British_Rover @ Mar 25th 2008 3:55PM
We aren't doing anything anyway. This is the slow time of year.
SPG @ Mar 25th 2008 3:59PM
I don't know what to think.
Ford makes some very good desirable cars (mostly in Europe) but Tata does not really at the moment.
Somehow I am confident that with Their newly purchased luxury brands they will become a different company themselves.
Yet still worried for these marques.
dcwf @ Mar 25th 2008 4:10PM
Dear Mr. Tata,
Please bring the Defender to the U.S.
Cheers.
brn @ Mar 25th 2008 4:16PM
$2.65 billion? That's quite a deal. I hope the parts supply business makes up for the rest.