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Ford Says “Tata” to Jaguar, Land Rover


Ford’s grand experiment has come to an end. With the sale of its Jaguar and Land Rover brands to the Indian automotive upstart, Tata Motors, the struggling U.S. automaker has effectively abandoned its grand goal of becoming one of the world’s leading luxury car manufacturers.

Ford’s release was terse, and notably, no senior officials were available, on the record to discuss the $2.3 billion deal, which is expected to run into little trouble winning regulatory approval,

"Jaguar and Land Rover are terrific brands," declared Alan Mulally, Ford’s president and CEO, in a prepared release. "We are confident that they are leaving our fold with the products, plan and team to continue to thrive under Tata’s stewardship.”

Thrive is not necessarily a word one heard often, however, inside the Ford empire, and particularly at Jaguar. Ford acquired the British marque in 1989, for a hefty $2.5 billion, outbidding American rival General Motors and winning the appreciation of the British government, which had effectively nationalized most of its collapsing auto industry in the decades before.

Ford officials quickly discovered they had a mess on their hands, a brand that had been starved of capital, as well as effective leadership, by its government-appointed overseers. Products were horribly outdated, assembly lines were frighteningly inefficient, and quality only underscored the conventional wisdom about British products.

Pumping money and management talent into the new subsidiary, Ford began to believe it could turn Jaguar into a truly global brand, and a competitor to the likes of Germany’s BMW and Mercedes-Benz. Ford ordered a rapid expansion of the Jaguar line-up, adding the midsize S-Type “saloon” and the compact X-Type. Former CEO Jacques Nasser, began boasting that Jaguar could push sales up to 200,000 units annually, and perhaps double that again. But at the same time, Jaguar became a political football within the Ford system. To keep its British unions happy, following the closing of the huge Ford Dagenham plant, Jaguar was ordered to take control of yet another underutilized U.K. factory. So, suddenly, the luxury maker was operating three inefficient plants, while producing less cars, in total, than just one of those would normally produce if run well.

But Nasser was on a mission, and in 2000, he acquired Land Rover for $2.7 billion. (That deal followed another high-profile purchase, the $6.45 billion takeover of Swedish manufacturer Volvo AB’s automotive operations.) Like Jaguar, Land Rover was a mess, and a particularly complicated one. In this case, the seller was BMW, which had bought both Rover’s cars and light truck business, a few years earlier. But despite its own grand strategy, Rover continued losing sales and racking up billions in losses. Ford took the SUV operations, Rover’s car group went to a British start-up company that quickly failed.

As with Jaguar, Ford pumped a hefty sum into Land Rover, hoping to shore up its position as the ultimate luxury sport-utility brand. Though Land Rover continues to face problems – notably lagging on the quality charts – it has done markedly better in the market, repeatedly setting new sales records, both in the key U.S., and global markets.

Nasser’s strategy was to combine Jaguar and Land Rover, as well as Volvo, and the tiny Aston Martin, into a new, semi-autonomous operation, dubbed the Premier Automotive Group. Initially, PAG even absorbed Ford’s American-based Lincoln and Mercury brands, though they were quickly spun back out, putting the focus on overseas – and mostly British – brands.


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Comments (8)
  1. Jag and Rover in the deep doo-doo of the third-world mess. This is sad and regrettable to hear. Too very bad for all. :(
     
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  2. This is going to be interesting. I don't know what will happen to the Land Rover and Jaguar brands in the US. Will curried Range Rovers fly? Rich people don't seem to like it when people buy their way in. How is Tata going to keep the 'Qwicky Mart' image away from these marque brands? I guess the good news is that quality can't really go down at Land Rover.

    If they bring the Defender 110 to the US, that would be really interesting to me.
     
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  3. $2.3 billion,... That would make Jaguar and Land Rover the world's most expensive pair of Tatas in history ... ;-)
     
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  4. Proof positive that a history of colonialism will come back to bite you. Twice.
     
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  5. From what I have read, it seems like Tata is planning on keeping its new golden jewels on their current path. And in some ways they will be better then they were under Ford. Here's hoping anyway!!!
     
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  6. IMO Mr TATA is trying to chew too much at the same time and he might choke, some at Ford wanted to keep the brands but at the moment Ford doesnt have the money that Jag needs for future projects.

    For those who think Ford messed with this brands they are very wrong, back when Ford bought jag the brand was a real mess, the quality was a joke and the factories looked worse than a 3 world country plant,but they automated the plants and putted Jag quality on the top, and it took time to get Jag on a plan and make them stick with it . the design of the S type mondeo based that was other bad desicion they made. Ford invested in Jag heavily and gave the cat a life line of another 19 years because I bet that if Ford havent bought Jag in 89 I bet the cat would be dead.

    The think Ford needed to address long ago was in the styling department, if the XK and XF had been designed and the cars had been in the market by 04 this sale wouldnt be happening but its deal done so lets hope the kitty and LR can survive
     
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  7. Ford poured billions into Jaguar and made it initially far more reliable than it used to, but it still could not compete with the BMWs and M-BS of the world.

    OF course, FOrd made very Stupid mistakes in managing Jaguar, esp. the excremental Ford Contour rebadged as the so-called X-type Jag. The stupid car was not good even as a FORD, it had less rear room than even the much smaller ESCORT! I rented one once because I had to, for a couple days, what a loser!

    Land ROver is the WORST, by far, in reliability, worse than even Kia, Hyundai, Chrysler, Dodge, every single other brand.

    And the Range ROver is RIDICULOUSLY Overpriced.

    I have no idea what the hell Tata can do about this, or why they bought the brands. Maybe as "halo cars"?

    I suspect it will be a dismal failure for them too, as it was for Ford.
     
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  8. Tatas believe in clean dealings and have a great corporate philosophy. Additionally, they have capable management who can turnaround ailing companies and make them profitable. With TCS to support, which supplies automobile software to the likes of Ferrari, Jaguar will be able to source the best automobile software. Indians have expertise in cutting costs without compromising on the quality. Tatas can certainly incorporate these advantages to their benefits and make superior quality cars at a comparatively cheaper price. In the final analysis, all these factors will benefit the UK automobile industry and the UK public at large.
     
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