Land Rover looking for new owner (again)
By Simon Ward-Hastelow 13th Jun 2007
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
Ford, which lost $12.6 billion last
year, has hired Goldman Sachs Group Inc. and Morgan Stanley to arrange
the sale. The plan is known internally as 'Project Swift'' a reference
to the speed at which Ford wants to make a sale.
Selling the brands would end a 20-year initiative to expand sales of
luxury autos by acquiring European companies. Since 1998, before
Michigan-based Ford bought Land Rover and Volvo, the company's own
Lincoln unit has plunged from No. 1 in U.S. luxury sales to seventh.
"This company desperately needs focus in terms of preserving its
capital and concentrating its management resources" said John Casesa,
managing partner of Casesa Strategic Advisors LLC in New York. "It
currently has too many mouths to feed"
The automaker's North American automotive operations were the primary
source of last year's record loss. The unit has been hurt by declining
sales of pickup trucks and sport-utility vehicles, Ford's main source
of profit.
Among the European luxury brands, Volvo has been profitable and Land
Rover turned profitable under Ford. Jaguar has had unspecified losses.
Wider Loss
The brands make up Premier Automotive Group, whose losses widened to
$2.32 billion last year. The figure includes costs considered one-time
expenses, such as job cuts.
Spokesman John Gardiner said Ford would neither confirm nor deny
speculation about a sale but the company's shares rose 16 cents to
$8.40 on the New York Stock Exchange. Up 12 percent this year.
Ford, the world's third-largest automaker, hinted that the brands might
be sold when it announced in August that it planned to find a buyer for
UK-based Aston Martin. Since then executives have said Ford continues
to evaluate its assets and has no current plans to sell any of the
other European brands.
Automotive News, citing unnamed sources, reported today that Ford is
seeking buyers for Volvo, Jaguar and Land Rover. Reuters, citing
sources it didn't identify, said HSBC Holdings Plc also was among the
investment banks hired by Ford to explore options including a sale of
Jaguar and Land Rover.
No Discussions
Jon Moulton, the venture capitalist who tried and failed to buy
carmaker MG Rover, denied a report that he wants to purchase Premier.
The report, in the London-based CityAM newspaper, said Moulton was
preparing a £3billion-pound bid for the group. "It's not on our deal
list" Moulton, managing partner of Alchemy Partners LLP, said. "There
have been no discussions.''
Aston Agreement
In March, Ford agreed to sell Aston to a group of investors led by UK
auto-racing champion David Richards for $848 million. The company
bought a controlling stake in Aston Martin in 1987 and the remainder of
the luxury sports-car maker in 1994. Aston is also part of Premier.
Nasser's Strategy
Under Jacques Nasser, Ford's chief executive officer from 1999 until
October 2001, the company formed the Premier group to oversee the
European brands. The luxury strategy was embraced by Chairman William
Clay Ford Jr., even after he deposed Nasser in October 2001 and took on
the CEO post. Of the brands, Jaguar has been the primary problem. Ford
in 2004 announced a Jaguar restructuring that included closing a UK
plant, firing 1,150 employees, scrapping a target to build 200,000
vehicles a year and exiting Formula One auto racing.
Land Rover
