Ford Won't Make It Easy

Yesterday was the deadline for bids on the Ford Motor Co.'s Jaguar and Land Rover brands. And according to the sources close to the deal, as reported by the Detroit News, the automaker is not making it easy.

The Dearborn-based automaker has given potential bidders limited information about the financial condition of the two European brands that belong to the company's Premium Automotive Group (PAG). They have not been allowed to visit any of the factories, nor have they been allowed to talk with senior management at either brand, reported the Detroit News.

Ford has told interested parties that they can only bid on Jaguar and Land Rover if they are not contemplating a major restructuring that would involve closing plants or moving production overseas, the report added.

The restrictions imposed by the automaker show how anxious it is about the potential fallout from any sale of the legendary European brands. Ford, which has been in the British auto industry for almost as long as it has in the United States, is deemed virtually as a domestic brand by most Britons. It is the hot-selling brand in Britain, making that one of the few markets where it outsells competitor General Motors Corp. And Ford is cautious enough to prevent any move that could compromise its standing in the territory.

In 2000, identical issues surfaced when BMW sold MG Rover to private investors. But those proved largely unfounded, said Garel Rhys, the director of the Centre for Automotive Industry at Cardiff University in Wales.

He added, "Ford wants to be seen as going with dignity where these brands are concerned. The private equity market has to learn this is not an area where they are simply going to be set free." As reported, there is at least one bid from the British private equity community, but foreign investors have also intimated their interest in Jaguar and Land Rover.

One name that has come up repeatedly is that of Ripplewood Holdings LLC, a New York-based private equity firm with a history of automotive investments. Spokesman Jeff Taufield would not say whether the company had submitted a bid and declined to comment on speculation that it is among those interested in acquiring the two brands.

"We've had contacts from third parties," said Ford spokesman Tom Hoyt. "We're assessing strategic operations for all of our operations." Hoyt would not confirm today's deadline.

"This is just round one," said one person close to the situation. The automaker has retained three banks consist of Goldman Sachs, Morgan Stanley and HSBC to handle the sale dubbed "Project Swift." A company source told The News the automaker would like to see a sale completed by the end of the year.

Ford could get $8 billion for Jaguar and Land Rover, and another $7 billion for its Swedish Volvo brand, which is also in play, said Jon Rogers of Citigroup. That sum could play a significant role in helping the automaker circumvent its struggling North American operations.

But Rhys questions how much cash Ford is walking away from. By his count, the global luxury market accounts for about 11 percent of automobile sales worldwide. Ford sold off Aston Martin earlier this year. Without Jaguar, Land Rover or Volvo, he says Ford will have no way to play in that lucrative arena. "It speaks volumes about their fears for the core business in the United States," he said.

Meanwhile, even the Ford Mustang tail light cover could not hide the uncertainty affecting consumers. "Anytime there is uncertainty, there is unrest," said Beau Boeckmann, the vice president of Galpin Motors, the largest Jaguar dealership in the world.


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