Tongues are wagging nonstop over the latest breaking news to hit the auto industry.
The British government is reportedly negotiating with car giant Ford over the possible selling of the U.S. carmaker’s Jaguar and Land Rover brands. According to a report by BBC, the Dearborn automaker has briefed politicians that it is planning to sell its British luxury car marques, Jaguar and Land Rover.
“Ford Motor Co. is seeking buyers for its Volvo, Jaguar and Land Rover brands in Europe as the money- losing automaker tries to focus on North America”, two different sources familiar with the matter said.
A spokesman for Prime Minister Tony Blair said Tuesday: “We are in touch with the company. We still believe both Land Rover and Jaguar are highly successful companies and will have a highly successful future.”
In 1989 Ford spent 1.6 billion for buying Jaguar and 1.7 billion in 2000 for Land Rover. These two manufacturers’ employee number is equal 19,000 workers in the UK.
On Monday, different sources acquainted with the matter were quoted as saying that Ford had hired investment banks to explore options including the sale of the two luxury British brands.
Investment banks including Goldman Sachs, HSBC and Morgan Stanley are reportedly helping Ford to explore the sale of the two brands, the sources said Monday. Neither Ford, nor the banks has given any comment on the situation, saying that they would give more details next week.
Ford has been cutting costs in a bid to offset declining sales. The automaker is in the process of a massive restructuring, and the firm reported a loss of $282m for the first three months of 2007.
Analysts have wondered for some time what Ford might do with Land Rover and Jaguar, neither of which has performed well.
Both firms are part of the Premier Automotive Group (PAG), as was Aston Martin.
In March the troubled US automaker sold sports car firm Aston Martin for 479m ($924m) to a UK-led business consortium headed by Banbury-based Dave Richards, boss of motorsport firm Prodrive.
In a separate report in City AM, private equity firm Alchemy Partners was said to be lining up a 3bn offer for the two luxury brands.
Meanwhile, the news of Ford considering putting its British luxury car marques Jaguar and Land Rover up for sale has prompted Union leaders to voice out concerns.
National officer of the Unite union, Dave Osborne, said today: “We are very concerned to hear these reports and we are seeking an urgent meeting with Jaguar/Land Rover. We find it difficult to understand why Ford would want to sell a successful, growing and environmentally improving brand like Land Rover, and a marque like Jaguar, which is a significant player in the luxury market and one that Ford has invested heavily in. Our prime concern is the job security of our members.”
Jaguar, which makes top of the line Jaguar oxygen sensor, has about 10,000 staff at sites in Coventry, Birmingham, and Liverpool, while Land Rover employs about 9,000 in the West Midlands and Warwickshire.
Ford is expected to make an official announcement in the next few days.
