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Ford close to Jaguar-Land Rover decision
17 December 2007
There are gathering signs that Ford will announce the identity of the new owner of Jaguar and Land Rover, the “twinned” British prestige marques it is selling for $1.5- to $2.0 billion, within the next two or three days. Ford CEO Alan Mulally has already said the news “could come” before the end of the year.
Other Ford sources close to the deal say the announcement would have to happen before Thursday to give Ford bosses time to inform employees and Wall Street before the Christmas break. Failing that, word would have to wait for the New Year – but Mulally is known already to have scheduled “heads up” meetings with selected media at the Detroit motor show in the middle of January.
The bidders
Most experts believe the Indian conglomerate Tata, which already owns British Steel and Tetley tea, leads a field of three preferred bidders that also includes the Indian group Mahindra & Mahindra, and the US buyout firm, One Equity Partners.
Tata has been making its own cars and trucks for years, specialising until now in low-cost vehicles. Its 69-year-old chairman, Ratan Tata, has already announced plans to launch a 100,000 rupee (£1200) people’s 'lakh car' next year, designed to attract poorer lower-income Indians who presently use small motorcycles, often to transport whole families.
Jaguar and Land Rover's UK union bosses have so far backed a Tata takeover of JLR as “the lesser of two evils”, believing it to be the stronger of the Indian bidders, and more likely to preserve JLR jobs for the long term than One Equity, the US-based buyout group.
They have reservations, though, believing Tata will have much to learn about preserving the mystique and positioning of two prestige car brands, and are also concerned that Tata may source more parts from overseas, or even move some manufacturing to India.
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