Ford has finally announced the agreement for Tata Motors to officially take ownership of Land Rover and Jaguar.
Yesterday there were rumors that the deal was going to be close to $2.6 billion, but today Ford has announced that the deal is for $2.3 billion. Ford is also going to contribute $600 million to the Land Rover and Jaguar pension plans.
Also part of the deal is that Ford is going to continue to supply the powertrains, stampings and other vehicle components for both of the brands. Ford has also committed to providing engineering support, including research and development.
"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."
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PRESS RELEASE:
FORD MOTOR COMPANY ANNOUNCES AGREEMENT TO SELL JAGUAR LAND ROVER TO TATA MOTORS
DEARBORN, Mich., March 26, 2008 – Ford Motor Company [NYSE: F] announced today that it has entered into a definitive agreement to sell its Jaguar Land Rover operations to Tata Motors.
The transaction is the culmination of Ford's decision last August to explore strategic options for the Jaguar Land Rover business, as the company accelerates its focus on its core Ford brand and "One Ford" global transformation.
The sale is expected to close by the end of the next quarter and is subject to customary closing conditions, including receipt of applicable regulatory approvals.
The total amount to be paid in cash by Tata Motors for Jaguar Land Rover upon closing will be approximately US $2.3 billion. At closing, Ford will then contribute up to approximately US $600 million to the Jaguar Land Rover pension plans.
"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."
"This is a good agreement. It provides the Jaguar Land Rover management team and employees with the assurances needed to maintain their focus on delivering the best results for the business," said Lewis Booth, executive vice president, Ford Motor Company, who has responsibility for Ford of Europe, Volvo and Jaguar Land Rover. "I am confident that, under its new owner, Jaguar Land Rover will continue to build upon the significant improvements and product successes it has achieved in recent years."
As part of the transaction, Ford will continue to supply Jaguar Land Rover for differing periods with powertrains, stampings and other vehicle components, in addition to a variety of technologies, such as environmental and platform technologies. Ford also has committed to provide engineering support, including research and development, plus information technology, accounting and other services.
In addition, Ford Motor Credit Company will provide financing for Jaguar and Land Rover dealers and customers during a transitional period, which can vary by market, of up to 12 months.
The parties believe these arrangements will support Jaguar Land Rover's current product plans, while providing Jaguar Land Rover freedom to develop its own stand-alone capabilities in the future that will best serve its premium manufacturer requirements.
The parties do not anticipate any significant changes to Jaguar Land Rover employees' terms of employment on completion.
Speaking about today's agreement, Mr. Ratan N. Tata, Chairman of Tata Sons and Tata Motors, commented: "We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business. We have enormous respect for the two brands and will endeavor to preserve and build on their heritage and competitiveness, keeping their identities intact. We aim to support their growth, while holding true to our principles of allowing the management and employees to bring their experience and expertise to bear on the growth of the business."
Jaguar Land Rover's employees, trade unions and the UK Government have been kept informed of developments as the sale process progressed and have indicated their support for the agreement.
Speaking on behalf of Jaguar Land Rover, Geoff Polites, chief executive officer, said: "Jaguar Land Rover's management team is very pleased that Ford and Tata Motors have come to an agreement today. Our team has been consulted extensively on the deal content and feels confident that it provides for the business needs of both our brands going forward.
"We have also had the opportunity to meet senior executives from Tata Motors and the Tata group," Polites continued. "They have expressed confidence in the team that has delivered significant improvements in Jaguar Land Rover's business performance. We feel confident that we can forge a strong working relationship with our new parent company, and we look forward to a bright and successful future for Jaguar Land Rover."
Comments (24)
Why is Ford selling all of their luxury brands?
Land Rovers are unreliable pieces of crap, but they make a lot of money.
Jaguar seems to have promise with the newest sedan.
Aston Martin is now owned by the Arabs, that makes me :o( .
Posted by Cheap Car Lover | March 26, 2008 3:07 PM
Posted on March 26, 2008 15:07
If Land Rover and Jaguar can go to India, why can't Aston Martin go to Arabs?
Posted by SEALBoy | March 26, 2008 3:35 PM
Posted on March 26, 2008 15:35
@CheapCarLover:
Ford bought Aston/Martin, Jaguar, Land Rover, and Volvo when it was flush with money in the mid-nineties. With the exception of Volvo, these companies never really benefitted Ford in profits . Jaguar required huge investments by Ford to improve quality control; Land Rover was inefficienty run; Aston Martin is ultra exclusive and yielded little to Ford's bottom line( on a side note, they are the automotive equivalent of sex appeal). Ford is trying to reduce its overhead and concentrating on the core business model. Volvo has been kept , because Ford have been able to tap into Volvo's design expertise (safety engineering, etc) and there is several model lines that use Ford/Volvo components. (Ford Taurus X, etc). It does seem ironic, that Jaguar is on the upswing, Aston Martin always will cater to an exclusive crowd and have several beautiful models in the works.
Posted by longdxcommuter | March 26, 2008 4:30 PM
Posted on March 26, 2008 16:30
"Why is Ford selling all of their luxury brands?"
Not to echo longdx too much, but hardly anyone in America is buying Land Rover or Jaguars. Jag may be on the upswing, but not here. The S-Type scared them all away ! ;) Volvo and Mazda are doing much better by comparison.
Now they just need to invest some of that ching into bringing those spiffy european Fords into the US.
Posted by Trooper Bri | March 26, 2008 5:03 PM
Posted on March 26, 2008 17:03
Tata? WTF?
Posted by Sphere | March 26, 2008 7:25 PM
Posted on March 26, 2008 19:25
ford finally got smart.
Mazda is the new Mercury, and Volvo the new Lincoln.
Ford is Ford and mainly designed/engineered out of Europe.
All they need to do is to shutter the Mercury/Lincoln organisations.
Posted by low iq | March 26, 2008 8:28 PM
Posted on March 26, 2008 20:28
So basically they paid $2.3 Billion to design Jaguar and Land Rover vehicles? At least I'm glad they aren't supplying their own parts, no offense but I don't trust brown people with quality control.
Posted by Mathew | March 27, 2008 2:10 AM
Posted on March 27, 2008 02:10
"Jaguar and Land Rover are terrific brands"
for sale
Posted by RETNIAP | March 27, 2008 2:14 AM
Posted on March 27, 2008 02:14
"no offense but I don't trust brown people with quality control."
ROFLMAO
You know about the reliability of American and European produced cars, right?
Posted by brad | March 27, 2008 3:24 AM
Posted on March 27, 2008 03:24
@ Brad, AZN's are not brown.
@ Sealboy, I didn't say it couldn't I just said it made me sad. Aston Martin was clearly Ford's best brand.
Posted by Cheap Car Lover | March 27, 2008 8:27 AM
Posted on March 27, 2008 08:27
How appropriate!
The quintessential British car company is now owned by one of the last peoples that it exploited.
Posted by bubba551 | March 27, 2008 8:43 AM
Posted on March 27, 2008 08:43
"no offense but I don't trust Redneck
people with quality control."
@ Brad, you know about the unreliability of American produced cars, right?
Posted by Brown people | March 27, 2008 9:26 AM
Posted on March 27, 2008 09:26
I'm replying to this ignorance, I don't have an issue with brown people, I am one, tools.:
"Mathew:
So basically they paid $2.3 Billion to design Jaguar and Land Rover vehicles? At least I'm glad they aren't supplying their own parts, no offense but I don't trust brown people with quality control."
Posted by brad | March 27, 2008 2:01 PM
Posted on March 27, 2008 14:01
no PAG anymore,thank you.
Posted by R3TNIAP | March 27, 2008 11:13 PM
Posted on March 27, 2008 23:13
Someone should send this memo to GM to about over buying just for the sake of saying you have more divisions then any other car company.
Posted by SteelCity1981 | March 28, 2008 2:38 AM
Posted on March 28, 2008 02:38
Brown people got no reason to live.
Posted by brad | March 28, 2008 2:41 AM
Posted on March 28, 2008 02:41
Racist comments on a website called TheTorqueReport...big surprise there.
Posted by Noya | March 28, 2008 5:23 AM
Posted on March 28, 2008 05:23
I'm taking that last comment by "Brad" wasn't made by Brad lol
Anyways, stop the Brad attack, he was just quoting :)
PS. Japanese quality checks rule
Posted by Z | March 28, 2008 9:30 PM
Posted on March 28, 2008 21:30
Enuf already!
Can we please go back to bashing the horrid reliability of Land Rover?
Posted by Al | March 28, 2008 10:14 PM
Posted on March 28, 2008 22:14
I apologize for the comment about brown people, I work with a bunch of them in construction and they cut corners everywhere. One of the reasons I'm never gonna buy a condo. Nothing wrong with Americans either, they are hard working people, they just gave all the wrong people too much control.
Lets just hope these guys give a damn about the customer and can bring something new to the market.
Posted by Mathew | March 29, 2008 4:54 PM
Posted on March 29, 2008 16:54
Go ahead TATA.
Posted by R3TNIAP | March 29, 2008 6:29 PM
Posted on March 29, 2008 18:29
He's racist and he doesn't even know it...
But yeah, I live in Michigan, where you would think a Ford owned brand would sell well... I don't see many Land rovers here. In fact, I'm living in one of the nicer areas of the state and don't see that many here.
The new LR2 is a piece of junk, as a friend who works at a shop told me. Out of the box, the fit and finish are substandard. Supposedly, he had to show a customer the picture of a new LR2 so that customer could see the lines were just as they were when they bought it... misaligned.
Jags on the other end... I guess I never really understood the point of the company.
However, we'll have to see how the companies fair without the mismanagement of Ford execs at the helm.
Posted by upl8n8 | March 31, 2008 9:26 PM
Posted on March 31, 2008 21:26
I think this sounds like it was actually a good move for Ford. They get $1.7B (after $600M payback to Tata) and they get shut of two lines they have improved dramatically and now have significantly higher sales while still getting to sell parts to another manufacturer.
I don't know how many people noticed that Ford gets to sell drivetrains and stampings to Tata, but drive trains are the expensive parts (transmissions like the one they spent almost $1B working on with GM) and engines like their EcoBoost which are supposed to start later this year.
So they lose the economic downside of having two high priced lines, but still get sales with parts. And the fact that their engineers will be working with Tata for years? Who wants to say that Tata won't be buying parts from Ford for quite a few years to come?
T
Posted by Teldar | April 1, 2008 9:40 PM
Posted on April 1, 2008 21:40
Heyf at least its going too a British colony!
Posted by tKJ | April 3, 2008 3:08 AM
Posted on April 3, 2008 03:08