Ford reveal interest in Jaguar and Land Rover units
Cash-strapped Ford Motor Company took a step toward selling its Jaguar and Land Rover units today when it received an undisclosed number of opening bids for its British automaking businesses.
Today was a deadline to submit early bids, but Ford said no sale is imminent.
"We've had contacts from third parties, and we're actively evaluating them as part of our strategic review," John Gardiner, a Ford spokesman. "They've only been preliminary discussions, and no decisions have been made."
He would not say how many bids have been received or who submitted them.
Ford, which lost £6bn (€8.9bn) last year and £141m (€209.3m) in the first quarter of this year, has cut thousands of jobs and closed factories in an effort to shrink itself to match lower demand for its products.
The company last year mortgaged its factories to get a £11bn (€16.3bn) financing package to fuel its restructuring and cover expected losses in its automotive operations.
It expects to burn up £8.5bn (€12.6bn) in cash before returning to profitability sometime in 2009.
Analysts have said the company may be depleting its cash at a higher rate than expected and may need to sell the British brands to raise money.
In March, the company sold its Aston Martin luxury sports car unit and it has said that all options are open, including a potential sale of its profitable Volvo unit.
A company official who asked not to be identified because the bidding process is confidential said that preliminary bids have been submitted only for Jaguar and Land Rover, and that the company did not take bids for Volvo.
Ford bought Jaguar in 1989 and Land Rover in 2000, and placed them with Aston Martin and Volvo to form its Premier Automotive Group.
The company does not break out earnings for the individual brands, but analysts say Jaguar has struggled to make money during the time that Ford has owned it.
Paul Newton, an analyst in London for the Global Insight automotive research firm, said he expects Jaguar and Land Rover to be sold separately because of Jaguar's losses.
Ford may even have to pay or assume liabilities to get Jaguar off its books, he said, but Land Rover is a reasonable value for a buyer.
"I don't think anybody's going to bid cold, hard cash for Jaguar," Newton said.
Newton said Ford would like to find a buyer or buyers who would preserve the Jaguar and Land Rover heritage and jobs in the United Kingdom. Ford, which is the top auto seller in the UK, does not want to rankle its British customers, Newton said.
"We've been here a long time. We understand our responsibilities toward our businesses and our employees," Gardiner said.
Land Rover employs 8,300 people in the UK and 11,500 worldwide. Jaguar has about 7,000 in the U.K. and 10,000 worldwide.
Ford shares fell 4 cents to $8.59 in afternoon trading Thursday.
