Ford Flags: Flogs Jags

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Ford’s survival strategy is becoming clearer. It is back to basics. Not quite ‘any color but black’, but also no distractions from the luxury sector of auto manufacturing. So Jaguar is up for sale. As in the recent Chrysler battles, equity capitalists are on the alert.

Ford needs an injection of cash big time, short-term. In the UK, attention is focused on the much loved Jaguar marque, and the original Chelsea tractor that is Land Rover. At the moment both products are losing money, contributing to Ford’s short-term cash crisis. The break-up and sale of its luxury subsidiary, Premier Automotive Group (PAG) is widely anticipated.

Land-Rover has made admirable productivity gains after a confrontational ‘last chance’ warning for its Solihull plant by PAG chief Mark Field, three years ago. It is currently in better shape than Jaguar and moving towards profitability. In the US the Jaguar marketing has been spectacularly unsuccessful, and is seen as too obviously a Mondeo in disguise.

Jaguar and Land Rover would have attraction as stand-alone acquisitions, but disentaglement would be difficult. PAG also has the profitable Volvo operation, which is more distinct, and more profitable. In strategy terms, the likely outcome is for Ford to move quickly for short-term cash reasons to divest itself of the various bits of PAG.
According to The BBC,

Under chief executive Alan Mulally, it is all hands to the pumps in the US, where Ford is focusing all its resources on rebuilding the Blue Oval as a brand after losing more than $12bn in 2006 …

One industry insider has suggested that the Renault Nissan alliance headed by Carlos Ghosn is likely to be interested. However, if as seems likely, the sales go through, Private Equity Partnerships will most likely be involved. Magna, the Canadian automotive components firm, which recently failed in its efforts to buy Chrysler, has already been mentioned.

Like real-life vultures, these raptors have a useful function in the Darwinian scheme of global survival of the economically fittest.

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3 Responses to Ford Flags: Flogs Jags

  1. Peter says:

    Land Rover are loved in the UK for the Defender series. All their other models invite love and loathing in equal measure. I am more in the loathing camp, not because of any eco-stamp, but because I think it bad form to drive through city streets in something that looks like it is designed to decapitate children.

    Jaguar, though, is a simple case of bad design overtaking good. As a boy they seemed, more than any other car, to represent the future. This was a future of dramatic, wind-cheating, even comic-book, shapes combined with a British signature of leather and wood.

    Sometime, someone decided that Jaguar was better understood as representing ‘ultra-conservatism’ & they have never succeeded from that day forth. There are three people I know who actually own Jaguars. Two of these bought them only because they could not contemplate anything German, and could not afford Aston Martin. The third would confess to having been born a fogey and, even then, reports that his Citroen Berlingo is actually a more satisfactory car.

    I suspect car manufacture to be a simple process of designing things people want to buy, and then building them well.

  2. Ford flags says:

    About jaguar: I agree with the last comment! it is a car that brought a lot of problems to their users. it has mechanic problems, and the design is too conservative in my opinion.
    Land rover is extremely troublesome as well. their 4×4 could not survive the competition, making poor products and ending up with bad business as well.

  3. [...] competitive pressures. In the UK, its acquisition of the much-loved (but eventually cash-strapped) Jaguar mark was reversed by its sale to Tata, another globalising [...]

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