Posted by: David Kiley on June 2, 2008
Ford Motor Co. has finalized its deal to sell Jaguar and Land Rover to Indian automaker Tata.
And so, the Ford Treasurer’s Dept. can close most of the file on the two British icons that Ford acquired (Jaguar in 1988 and Land Rover in 2000)in the hopes of taking advantage of the surge in luxury vehicle sales.
Ford is getting about $2.3 billion from Tata, less than half the price Ford paid for the brands. And then there is the $10b-$15b in combined losses over the years. The mind boggles at what Ford could have done with the Lincoln and Ford car lineup over the years with an additional $15 billion had it been plowed into new products.
Ford will, of course, continue to supply Tata-Jag-LR with engines and parts and the like for as long as the Indian company needs them. But I, for one, am looking forward to a Jaguar concept car developed by Tata that I’d like to see called the “Bodascious” Tata.
About the conclusion of the deal, Tata chairman Ratan, N. Tata said: “This is a momentous time for all of us at Tata Motors,” said Tata chairman Ratan N. Tata. “Jaguar and Land Rover are two iconic British brands with worldwide growth prospects.”
For an intersting take on the deal reported from Mumbai, you might want to dial up Sharon Carty’s recent article in USA Today.
As happy as Ford is to be rid of the costly Brits, there are those who wish Tata had stayed home the day they went shopping for new cars. Balaji Jayaraman of Morgan Stanley said, buying Jaguar and Land Rover was “value-destructive given the lack of synergies and the high-cost operations involved”. Ouch.
Mr. Jayarman, I think, is pointing to the thousands of excess bodies in the U.K. dedicated to building and planning Jag and Land Rover models. The labor unions don’t make it easy to right-size those operations.
About the deal, Ford said in a statement: Ford Motor Company wishes the Jaguar Land Rover management team, its employees and the new owners every success for the future. In other words, “Good luck with all that….”