Ford has finally sold its Jaguar and Land Rover subsidiaries to Indian manufacturing giant Tata Motors. The Blue Oval announced the widely anticipated sale to the US stock markets and employees this morning, confirming it was paid $2.3 billion (£1.2bn) for the two premium British marques. It has sold them wholesale, rather than keeping a stake as it did with Aston Martin - ending a decade of American ownership.
Ford bought Land Rover from the BMW-Rover break-up in 2000, 11 years after it acquired Jaguar. But over the years it has struggled to make money and its vaunted Premier Automotive Group is now rapidly being disbanded. Read on for our full report of the historic takeover and click here for Gavin Green's analysis of the sale.
Jaguar-Land Rover sell-off: the details
The agreement announced today isn't the end of the wait, however. The deal should be completed by June, subject to regulatory approval which is expected to be granted. And Ford hasn't cut all ties with J-LR. It will continue to supply powertrains, body stampings and other components, and the Blue Oval has pledged to continue offering R&D, finance and even back-office help with accounting to ease the transition to Indian ownership. So don't expect too much change overnight to Jaguar or Land Rover products.
Ford chief exec and president Alan Mulally said: 'Jaguar and Land Rover are terrific brands. 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.'
The sell-off has taken so long as the accountants have worked out how to extract these two companies who are inextricably linked. The bean counters have had to separate everything from the IT networks at the Gaydon headquarters to the intellectual property rights over systems like Terrain Response - as well as negotiating with unions over things like pension funds (Ford is expected to pay £300m into two separate funds). 'These things don't happen overnight,' explained a spokesman.
If you think the deal has attracted a flood of speculation and headlines in the UK, you should see the response to the J-LR deal in India. 'It's been completely mad - we've been fielding dozens of calls a day for the past few months from Indian media,' added the Ford spokesman.
Tata: the fastest-growing car company
Indian conglomerate Tata will now be working out how best to incorporate Jaguar and Land Rover into its growing global portfolio. Eponymous chairman Ratan Tata told CAR that the new owners would respect the working practices at the two British car makers and promised to 'nurture and grow them' rather than start afresh. For now, production will remain in the UK, but who'd bet against foreign-built Jags or Land Rovers in the next decade?
'We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business,' Tata added. 'We have enormous respect for the two brands and will endeavour 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.'
At a stroke, the Ford sale has confirmed Tata as an even more serious player in the automotive sector. It has a dominant position in the fast-growing Indian market, the clout of the world's cheapest car - the Nano - and now two prestigious, but under-performing, premium brands.
In car industry terms, Tata has packed a century of industrial development into just a few short years. For a full interview with Ratan Tata about his plans for J-LR, see the new May 2008 issue of CAR Magazine, on sale now.
Click 'Next' to see reaction to the Jaguar-Land Rover sale
WHAT THEY SAID
'We are not on the prowl to acquire other car companies or add brands. we won't be going on a spree.'
Ratan Tata, Tata Motors chairman
'Tata has 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.'
Geoff Polites, Jaguar Land Rover, chief executive officer
"It's another sad day in the demise of the British car industry... at this stage Jaguar and Land Rover cars will be still be built in the UK, but I've been in this game for long enough not to rule out the possibility that manufacturing could move abroad in the future. It can't be a good day for UK industry when two such iconic brands are sold off.'
Tony Woodley, Unite union general secretary
'The price paid is surprisingly high... It seems logical for Tata to lock in supplies of engines and transmissions for several years. It is only with the introduction of new models that Tata can meaningfully change the cost structure of the company.'
Jeremie Papin, Lehman Brothers in London
'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. 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.'
Lewis Booth, Ford executive vice president, responsible for Ford of Europe, Volvo and Jaguar Land Rover