Two of the three remaining members of Ford?s Premium Automotive Group (PAG) have been officially placed in the showroom window. Jaguar and Land Rover are now for sale to the highest bidder?if one or more can be found.
Between 1987 and 2000 Ford forked out $US2.5bn for Jaguar, $US6.45bn for Volvo, $US3.3bn for Land Rover and a mere pittance for Aston Martin. On top of these acquisitions Ford poured more billions into the assets of these acquisitions as it set about creating their Premium Automotive Group which history records as all going a little pear-shaped.
It was only recently that Ford sold Aston Martin to a group of investors which included Prodrive for $US957million and there is no-doubt that this cash lasted all of 20 minutes given Ford?s current financial woes.
Volvo, Land Rover and Aston have all managed to stage turn-arounds and have returned to trading in the black in recent years. Jaguar continues to be a veritable money pit that single-handedly has swallowed the profits of the other PAG members and then some. In 2006 Jaguar posted a loss of US$715 million and looks set to lose a further $US550 million in 2007.
Aston is sold and Ford want to retain Volvo for the time being at least so who would want to buy a terminally ill Jaguar or Land Rover, a manufacturer of SUV?s which are slowly but surely falling out of favour with consumers?
Well, it seems that Cerberus fresh from their purchase of Chrysler are having a sniff at these latest crumbs on Ford?s table. No doubt they see a neat fit with Chrysler. Jaguar providing a prestige addition to the Chrysler sedan range and Land Rovers SUV?s sitting atop the Jeep line-up which all sounds very PAG to us... The latest offer from Cerberus is believed to be $US7.3bn for both brands.
The scary thing is that $US7.3bn is barely a ?drop in the bucket? for Ford and all they can hope to achieve from it is to pay down some of their interest costs and get the money sucking Jaguar brand off their back.
Whilst we can understand selling Jaguar, we don?t understand the sale of profitable brands like Aston Martin, Land Rover and potentially Volvo. Isn?t it profitability that they need?? Why spend a decade or more and billions of dollars to turn-around these brands only to sell them in what appears to be little more than a fire-sale.
Source : The Truth about Cars