Is it now official. Tata is now the father of both Jaguar and Land Rover. Ford has finally gotten rid of two of its biggest cash bleeders to India’s Tata Motor. This is an interesting twist in colonialism, given that both the US and India were once British colonies, and have now had a hand in where two of its most famous car brands go.
The sale is worth some estimated USD2.3 billion, which is in cash from Tata.
"Jaguar and Land Rover are terrific brands," said Alan Mulally, president and CEO, Ford Motor Company. "We are confident that they are leaving our fold with the products, plan and team to continue to thrive under Tata’s stewardship. Now, it is time for Ford to concentrate on integrating the Ford brand globally, as we implement our plan to create a strong Ford Motor Company that delivers profitable growth for all."
Tata had been the key bidder in this whole process since Jag and LR were announced to be going on sale. Ford lost USD2.7 billion last year and has been in great danger of sinking into bankruptcy for over three years now. Selling the two luxury brands would inject some much-needed cash into its operations and possibly reverse a Titanic situation. Jag and LR were purchased by Ford in 1989 and 2000 respectively, the latter from BMW which was also disappearing fast no thanks to LR debt and bad product. Land Rover has come back with guns blazing in the past year and is now seen as a very attractive buy for anyone, while Jaguar is still redefining its space yet again with new product such as XF.
Ford sells Jaguar, Land Rover
Jaguar / Jaguar XF
Price put at US $2.3 billion cash
By Thami Masemola
March 26, 2008 12:06 PM
Filed Under: American, Corporate/Financial, Ford, Industry, Jaguar, Tata
Comments
wolff
March 26, 2008 3:42 PM
i totally deny with wat u say.. its a good job that Tata Motors is buying JLR.. n btw, this company is well over a 100 years old, so they will never "go under because of overspending" the Tatas have always been a very wise company when it comes to buying other companies.. n btw, to date all their aquisitions have been profitable.. so, unless JLR brings Tata loss, dont expect this company to "go under".. n Ratan Tata is one of the best chairman's a company could have.. so, please get ur facts rights rather than shoot off ur mouth!!!
JohnnyG
March 26, 2008 4:17 PM
If there is any company at the moment that can invest heavily in these two brands without affecting their other brands, it's Tata. I am sure Tata will do a wonderful job of leading these two great luxury brands.
Bristol411S3
March 26, 2008 4:23 PM
I agree. For an example of a company that buys and goes in over its head take a look at Ford - bought a bunch of prestige brands to make up the Premier Auto Group and now can't afford to keep them. It is Ford that is losing money and having issues than JLR is only a small part of that. I would suggest that JLR probably has a better future under Tata than Ford.
ck314
March 26, 2008 4:39 PM
Who cares about affording and investing, they simply lack the hi-tech automotive expertise and know-how BMW or Ford have, so R.I.P. JLR.
nathandavid88
March 26, 2008 4:50 PM
Ok, so Tata may not have as much high tech auto experience as some of the other more established auto brands. This is why they have signed substantial deals with Ford to supply JLR with certain technologies in the short term, while they also have a deal with FIAT Group, as well as Italian design and R&D house IDEA, and their own European R&D operations in Leamington Spa, Great Britain. And on top of that, they have an extremely large amount of cash to spend of learning from and expanding JLR own high tech expertise and know how, more cash than Ford does I'm sure!
m555david
March 26, 2008 4:48 PM
yeah kid, get your facts straight. Tata is a cash cow, and have been like that for a while. Indians are excellent engineers so it probably will save a bundle on R&D department, while taking Jags to a new level. Indians always had a good business sense, coupling with a hard work, i wouldn't be surprising that Jag can become a major force in luxury market again all because of that purchase.
BENZian
March 26, 2008 4:56 PM
Land Rover has been hemorrhaging money for a long time...even BMW could not make a profit on Land Rover and the losses continued to the extent they wisely sold LR to Ford. Jaguar is still a desirable brand but it also has been a money pit which is why it was up for sale in the first place. Both of these British brands suffer from high costs/legacy issues in Britain and really there is only one answer to ensure they are profitable...production will to be moved to India to take advantage of much lower cost of automobile manufacturing. While I am a fan of British cars, all of them from Rolls Royce to Bentley to Jaguar to Aston Martin to Rover/MG to Land Rover were in very bad shape and were at the point of Bankruptcy over & over...without Foreign companies buying the brands and injecting capital and modern technology...they would be only a memory. I do not want any of the historical British marques fail but it's clear the native British car manufacturing is dead. Tata Motors makes me nervous as a new owner after all they do not even possess the technology to build the sophisticated engines these brands require. I think Jaguar should have never been separated from Aston Martin. There were economies of scale there as you see with Toyota/Lexus & Nissan/Infiniti.
nathandavid88
March 26, 2008 5:07 PM
You should get your facts straight before you post them:
Firstly, Land Rover is a profitable brand and has been over the past few years thanks to Ford's efforts. Only Jaguar is losing money at present, although new models like the XF are tackling that problem.
Secondly, TATA has stated that JLR production WILL DEFINATELY NOT be moved to India. TATA knows that doing this would compromise the prestige of these brands, something they can not allow to happen.
ck314
March 26, 2008 5:48 PM
wow Italians helping out Indians to rescue a premium brand ditched by Americans, that must sound really reassuring to future Jag/Range Rover customers! Actually Fiat has also been on the verge of bankruptcy a number of times, and weren't it thanks to money laundering and some inherent Ferrari marketing they'd be gone for a long time; IdeA designs are amongst the most boring and dull in Italy (Lancia Dedra, Fiat Croma...), and agreements with Ford are likely to be in very punctual areas and in the short term. Tata should have actually bought Rover and MG instead, reaching higher realms progressively, with less pretentiousness.
wolff
March 26, 2008 7:14 PM
i agree with u on the last point ck314..but, if ur talking about the Italians being at the verge of bancrupty, then u must also remember that the American's are washing their hands over JLR coz they fear the same!! :D & to all those talking about technology, n all those who doubt Tata's ability to give n take technology, remember one thing TCS, Tata Consultancy Services actually work with Ferrari in F1.. i know its not too related to the present discussion... but, thats technology too, and that too the pinnacle!! remember guys Tata would only provide the money.. as someone else stated here.. "Tata would be the cash cow".. thats exactly wat it is.. n of wat i've noticed, watever Mr.Ratan Tata touches turns gold.. hope the same happens to JLR.. :) kudos & congrats to Mr.Ratan Tata for having gone through the deal and having bought JLR and wishing u the Best Of Luck with the new company into the Tata sons.:)
A FACT: In the early 1900s [approx 1907] when Tata wanted to start an Steel business, the Britishers laughed at him & said that it wouldnt last at all, and that it'd be a failure.. but today, its the 6th largest steel manufacturing company in the world, and also bought over Corus, an Anglo-Dutch company.. the tides are now turning.. its India's chance to emerge out of darkness and shine light on all.. ;)
desiathate
March 26, 2008 7:45 PM
i agree w. wilff.. and when all TATA haters get a chance take a look at the time when TATA offered its first car to now it has not been that long but the cars are getting better and better .. and its not like tata gona let go of all jag and Lr's engineers.. rather give them the freedom of money they have been begging from FORD! plus this is in benefit for TATA because now they can use some of the tech. JAG N LR has to put in their own company! its a win win as i see it!
ck314
March 26, 2008 10:06 PM
It's nothing to do with hating or loving tata, it's simply being objective and logical, this is an automotive business, not the birth of a new religion... and those engineers you cite made a good job updating JLR thanks to Ford's expertise (mainly Ford derived V6 and V8 [V12 for AM] engines and great experience in chassis setup). So will they now stagnate for awhile, leading to further losses and unemployment, or will they become the new BMW from the far east by magic in a few months? Wait and see...
muellr
March 26, 2008 11:35 PM
I read another article that reminded us that Ford spend more the 3 billion$ on Jag in '89 and about 2,7 billion$ on LR when BMW got rid of it. Ford also agreed that they will help Tata with pensions in the range of 600 million $. Considering the decline of the dollar the loss is imense!
and I think the only reason that they made money with LR was that Bmw left them with a superbly developed Range Rover that they still sell today.
wisp
March 27, 2008 7:12 AM
Wow this is a hot topic.Buyers of products are driven mostly by perception of the brand. If pipo have trust in the Tata products then they will buy them. The horrible truth however is that (talking of South Africa) the Tata products history here is not a very good one. They have however improved on their products and hopefully pipo might just gain faith in them runniing LR and Jag. I on the other hand have admired the Range Rover super charger and the Land Rover concepts. I fear pipos mindset on the two bought brands is going to shift as mine has. It's reality and Tata has a big job to do - win the trust of the market and these two aint Nano cars but established brands. Don't kill living giants.
wolff
March 27, 2008 8:38 AM
well,m y dont u uys understand, JLR will be left as JLR.. it shall not be merged with Tata Motors.. :O n Ratan Tata has repeatedly said that.. n Mr.Ratan has an amazing love for automobiles... the Nano n the Jag will NEVER be sold under the same roof!! :O they r different entities, n they shall remain so.. n i believe JLR is in better hands now than they were under Ford!!
wisp
March 27, 2008 9:51 AM
You are correct in pointing the clear division of LR and Jag from the other Tata brands. The problem however is that pipo will still look at Jag and LR as tata siblings from now onwards as they do look at Lexus as a Toyota. It is therefor true that Tata has got to work harder than every other car maker to carry with and win the support that Jag and LR enjoyed in the past before being bought. This is all in the mind and as simple as imagining what the perception of a Tata product would be in the next year after being bought by a big brand like VW or BMW. Pipo would in this case look forward to buying the Tatas which would be expected to improve vastly under management/ownership of renowmed and proven brands. They have a 50/50 chance of making it or blowing it. Mass production will not work here - as we all know that normally mass production is fueled by cost cutting.
[]V[]orbid[]V[]an
March 27, 2008 9:49 AM
I hope that some new jags will come out of this. Please....a new XJ please....
benz_man
March 27, 2008 10:25 PM
The new XJs been in the works for a while now, so it'll have Ford fingerprints all over it when Tata gets it.
wolff
March 27, 2008 9:55 AM
i believe that here, more than JLR losing its stance, Tata would gain a good name..
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And yes I know, like many of you have told me that Tata is well know in that part of the world. but it's happened time and time again, that a company gets in way over their heads and buy, buys and buys and with in a year or two they go under because of over spending.