Ford: we will not sell off Kwik-Fit

0 Comments | Sunday Herald, The, Nov 11, 2001 | by Ian Fraser

SENIOR Ford insiders have rubbished speculation they will sell their tyres and exhausts unit Kwik-Fit back to its founder and chairman Sir Tom Farmer in a management buy-out.

Ford acquired Kwik-Fit in April 1999 for around (pounds) 1 billion, but when the Detroit-based car giant replaced its chief executive Jac Nasser with William Clay Ford 10 days ago it fuelled speculation that the company would review its commitment to Kwik- Fit.

Some observers assumed that all acquisitions made under Nasser's rule would be unwound by the 44-year-old scion of the founding family.

Nasser had sought to emulate Jack Welch at GE by transforming Ford into a wide-ranging vehicle services conglomerate rather than focusing on its core business of building cars and trucks.

But a senior Ford source said: "Kwik-Fit is solid, stable and profitable. Nor does it conflict with Ford's business.

"Despite fears at the time of the acquisition that it might conflict with our Rapid-Fit business, Kwik-Fit has turned out to be complementary rather than conflicting.

"We are still very much pushing for an on-going relationship with customers."

One reason that Farmer opted to sell out to Ford was because it would enable him to step up Kwik-Fit's overseas expansion. The Ford insider said there was no question of the international roll-out being slowed down as a result of William Clay Ford's decision to put everything up for review.

Graeme Maxton, of the global management consultants Auto-polis, said: "It would surprise me greatly if Ford off-loaded Kwik-Fit. Mario Monti may scrap the Block Exemption [a piece of EU legislation that permits car manufacturers to own or control their sales and distribution networks] in the next few weeks. So in my view Kwik-Fit remains an excellent insurance policy for Ford."

Farmer opened his first Kwik-Fit depot in Leith 1971 and built the business into a multinational company employing 9500 people.