LONDON – Ford Motor Co. (F) said Tuesday it was reviewing its position on Jaguar and Land Rover, fueling speculation that the Dearborn-based company is getting closer to selling them.
John Gardiner, a spokesman for Ford's Premier Automotive Group, which includes the two brands plus Volvo, said Ford has been reviewing all of its operations for a year. The company has said in the past that a sale of the two brands is possible.
"We are working with our financial advisers on the best options for Jaguar and Land Rover, and nothing is ruled out," Gardiner said. He added that there was no time frame for making a decision.
Ford may be more interested in selling the two British brands now because the U.S. automotive market has softened in recent months and Ford may be in need of more cash, said David Cole, chairman of the Center for Automotive Research in Ann Arbor.
"I think really that Jaguar and Land Rover have both been on the block unofficially because they were not really core to Ford. The real question is what kind of value can you get for them?" he said.
Ford's review of the two brands comes as it is struggling to return to profitability in the face of fierce competition from Asian automakers and developing tastes for more fuel-efficient models in its key North American market. It is slashing thousands of jobs and plans to close plants to cut costs.
Prime Minister Tony Blair's office said it was in touch with Ford about the review.
"We still believe that both Land Rover and Jaguar are highly successful companies and will have a highly successful future," the prime minister's official spokesman said.
British lawmaker Lorely Burt, who represents Solihull, home to Land Rover's assembly plant, said legislators were told Monday night that Ford was "looking at all the options which may or may not include a sale."
"We are very concerned to hear these reports and we are seeking an urgent meeting with Jaguar/Land Rover," said Dave Osborne, national officer of the Unite union.
"We find it difficult to understand why Ford would want to sell a successful, growing and environmentally improving brand like Land Rover, and a marque like Jaguar, which is a significant player in the luxury market and one that Ford has invested heavily in."
Ford sold Aston Martin, another part of the Premier Automotive Group, for $848 million in March, with some analysts saying the luxury brand did not fit into Ford's long-term survival plan for cost savings from developing multiple models worldwide on the same underpinnings.
Ford posted a narrower loss of $282 million for the first quarter. The Premier Automotive Group reported a record pretax profit of $402 million for the quarter, due largely to Volvo.
Ford bought Jaguar in 1989 and Land Rover in 2000. The two business have about 19,000 employees in Britain.
Cole said Ford may be afraid of burning up more cash than the $17 billion it expects to burn up through 2009 to cover losses and restructuring costs. The company has mortgaged its assets to finance its turnaround plan.
"This is a tough revenue market now for everybody," said Cole, who added that rebates and other incentives are on the rise now due to superheated competition.
Because Volvo is making money, Ford may have to throw it into the deal to sell the other two brands, Cole said. But Ford also is relying on Volvo as it tries to globalize its engineering, design and manufacturing systems, he said.
Geoffrey Robinson, a legislator representing Jaguar's base in Coventry, said speculation about a sale of Jaguar and Land Rover was "was not news in the sense that ... it was announced some time ago that they would be looking to do this."
"It seems to have moved on a whole gear now that they do have certain groups earmarked who might go forward and make specific bids," Robinson told BBC radio.
"Ford have got some huge problems on their own, really huge facing survival really on their hands. They actually don't have the management capability, never really had it, to make a success of Jaguar. And Jaguar could potentially be a great success story, as could Land Rover," said Robinson, who was chief executive of Jaguar Cars in 1974-75.