Ford Gets Bids for Jaguar, Land Rover
Published 12:00 am Monday, December 26, 2005
DETROIT – Ford Motor Co. has received several bids for its Jaguar and Land Rover units, but a spokesman said they were preliminary and no sale of either British automaking business was imminent.
Thursday was a deadline to submit early bids on the two units, but a decision likely is several months away.
“We’ve had contacts from third parties, and we’re actively evaluating them as part of our strategic review,” John Gardiner, a Ford spokesman in London, said Thursday. “They’ve only been preliminary discussions, and no decisions have been made.”
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He would not say how many bids have been received or who submitted them.
Ford, which lost $12.7 billion last year and $282 million in the first quarter, 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 $23.4 billion financing package to fuel its restructuring and cover expected losses in its automotive operations. It expects to burn up $17 billion in cash before returning to profitability sometime in 2009.
Analysts have said the company may be burning 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 for $848 million, and it has said that all options are open, including a potential sale of its Volvo unit.
A company official who asked not to be identified because the bidding process is confidential said Thursday 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 put 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 continued 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.
Ford shares rose 3 cents to $8.66 in midday trading Thursday.
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A service of the Associated Press(AP)