REAR VIEW Mirror: TATA FORD

0 Comments | Sunday Mirror, Mar 30, 2008 | by Brian Twomey

AFTER months of speculation and rumour it has finally been confirmed that the Ford Motor Company has sold the Jaguar and Land Rover car manufacturers to the Indian Tata group.

The deal was confirmed on Wednesday and is worth EUR2.3 billion US (EUR1.45 billion).

The sale will formally be completed by the end of the summer. While the deal does not end Ford's involvement with the two companies - Ford facilities will still supply engines and other components - it does end 18 years of ownership of Jaguar while Land Rover has been part of Ford since being bought-from BMW in 2000.

Tata, a huge Indian corporation with interests as diverse as steel fabricating and tea growing, was the preferred buyer both by management at the British companies as well as union groups.

In January Tata launched the world's cheapest new car, the EUR1,700 Nano, and has a strong presence in the domestic India car market.

The purchase of Jaguar and Land Rover allows the company to expand its car-making operations beyond its Indian base as well as moving upmarket.

As part of the deal Ford has injected EUR600 million into the Jaguar and Land Rover pension funds.

As well as the two companies and the products they sell Tata is getting all the manufacturing facilities associated with them including a factory Halewood in Liverpool that builds the Jaguar X- Type and Land Rover Freelander.

The facility was a former Ford factory and it built the last European Ford Escort in July 2000.

Tata and Ford have confirmed that employees and customers of both compan ies will not see any dramatic changes; there are no job losses expected and the sale is not going to have any immediate effect on the product line up of either company.

Tata will continue to use Ford supplies engines, the V6 diesel and V6 petrol engines used by both companies are built in Ford facilities in Wales and Essex, although Ford will not retain a stake in either firm.

Ford still retains a 15 per cent stake in Aston Martin which it sold last year. Ford have also quashed rumours that Volvo is up for sale. Ford bought Jaguar in 1990 and Land Rover 10 years later.

While Land Rover has been profitable for Ford it is believed that the American giant never made money on its ownership of Jaguar.

While Ford's European operations have been profitable lately the company is selling off Land Rover and Jaguar to help the recovery of the American division.

Ford in the US has struggled in recent years and the sale of the two British companies will help the blue oval to focus their efforts on rejuvenating their North American operations as well as raising capital.