Ford Lowers the Bar for Sale of Jaguar and Land Rover

Robert Farago
by Robert Farago
ford lowers the bar for sale of jaguar and land rover

According to The Sunday Telegraph, FoMoCo is making it easier for bidders intent on relieving the automaker of the remaining British pieces of their PAG (Premium Automotive Group). In an "unprecedented move," Ford has decided that potential buyers do not have to submit fully-financed bids for the second round. The change reflects the tightening of the international credit market; a trend that raised the cost of Cerberus' Chrysler takeover and delayed the recent sale of GM's Allison Transmissions unit. The lowered bar is a big boost to bids by two (count 'em two) ex-Jag CEOs (Sir Nick Scheele and Bob Dover), former Ford CEO Jac Nasser and Chrysler-owning Cerberus; all of whom are playing this game with OPM (Other People's Money). Indian automakers Tata Motors and Mahindra & Mahindra, however, are bound to be pissed at FoMoCo's newly leveled playing field.

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  • Sherman Lin Sherman Lin on Aug 27, 2007

    I just think that too much game playing as been going on at Ford and GM etc. Everyone assumes that the Indian wil ruin Jaguar or make crap. I think Detroit has been making dangerous assumptions for too long. If you need or want a long term relationship with Jaguar themn make it a condition of the sale. Another way of looking at it is the guys who use to run Jaguar and failed want another chance to run it and yet somehow many on this forum assume that they would be a better choice than people who have buil a hugely succssful auto empire?

  • RobertSD RobertSD on Aug 27, 2007

    On one hand, you can place that as a condition in your sale, but the buyer doesn't have to uphold it, even if you are a stakeholder. More importantly, though, Ford risks buyer and political backlash in its largest Euro market if this deal does not go off well. Selling to an auto firm is risky from a political perspective especially if they are international and relatively unknown. If a PE firm buys Jag/LR, Ford will have more pull because of the engineering resouces that will have to be shared and the fact that these firms will re-establish the brands as UK brands as an independent entity (even though several of the bidding PE firms are from the U.S.). I think Ford knows exactly what it is doing. The only reason everyone thinks there is game playing going on in this deal is that no one has the full story and every week someone reports something different and more sensational than last week. None of the assumptions Ford is making in this deal are dangerous. What would be more dangerous is to ignore the politics involved in this sale and just dump it with the highest bidder.

  • Kjc117 Kjc117 on Aug 27, 2007

    Ford needs to shed more of these distracting brands and become more focused on saving what market share they have left. If, Ford does go under inwhich I don't believe they ever will. Mazda would never go under, the Japanese govt. would never allow it. The Big T or Big H would step in to save them.

  • Redbarchetta Redbarchetta on Aug 27, 2007
    ...a mass of low priced crates with a posh badge on the nose (which would erode the nameplates until they were worthless). Why does everyone assume the Indians are going to do the same thing Ford did to Jag. I think both companies could use some new ideas and not the same old rehashed management mess.