Ford’s Emotional Breakup With Jaguar

There’s so much to love in John

Reed’s story about Ford selling Land Rover and Jaguar: it’s full of juicy

goodness. But the very best bit comes at the end:

Ford, which lined up a $23bn financing package to see it through its restructuring

late last year, has repeatedly denied immediate plans to sell the two brands.

When Aston Martin was sold in March Lewis Booth, PAG’s head, said: "Jaguar

and Land Rover are not for sale."

This is simply embarrassing. You don’t say in March that the brands are not

for sale, only to start shopping them around in June. What this means is that

Ford lacks strategic vision, and that it is still casting around desperately

for ideas.

A few other tidbits:

Ford Motor has given Goldman Sachs, Morgan Stanley and HSBC a mandate to

sell Jaguar and Land Rover.

It takes three investment banks to sell these marques? I think the

story here is that Ford has borrowed so much cash from these banks that it feels

beholden to them and has to give them any M&A mandates that may or may not

come along.

A spokeswoman for Alchemy Partners denied a newspaper report that the private

equity group was lining up a £3bn bid to buy the brands. Alchemy had been

interested in Jaguar and Land Rover, she said, "but only at the emotional


It’s worth noting that £3 billion is $5.9 billion: in other words, these

two small, money-losing brands are worth almost as much as Chrysler. They might

not have Chrysler’s built-in healthcare liabilities, but they do have widening

losses, and Jaguar in particular seems to be something of a money pit. On the

other hand, there’s no guarantee that Ford will be able to get anywhere near

£3 billion. But if there’s lots of interest "at the emotional level,"

then maybe it will be able to get lots of hugs and kisses instead.

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