Credit crisis threat to Ford sale strategy

Aug 24 2007 by Alistair Houghton, Liverpool Daily Post

Jaguar cars at Halewood

THE global credit crisis could affect Ford’s plans to sell its Jaguar and Land Rover brands, the company has revealed.

Ford, whose Jaguar and Land Rover plant at Halewood employs 2,400 people, says global economic conditions are an ongoing concern for the business as it looks to offload the two marques.

Ford said yesterday the market turmoil was not yet slowing down the sale.

But it confirmed that any announcement on the future of Jaguar and Land Rover would not be made until the end of the year or early in 2008.

Union leaders confirmed they met Ford last week to discuss the progress of the bidding.

Ford revealed in July that it had received several opening bids for the brands. Reports indicated that Indian industrial giant Tata and at least four private equity groups had expressed an interest.

Lewis Booth, Ford's head of European and luxury operations, said: “We expect things to happen towards the end of the year, early next year.”

Mr Booth said Ford was also carrying out a strategic review of its Volvo brand, but would not go into any more detail.

Asked in Michigan about whether credit market volatility would affect Ford’s plans, chief executive Alan Mulally said: “It absolutely is an issue.”

Ford is in the middle of a huge restructuring plan, including closing 16 plants in North America. Mr Mulally said Ford does not need a global luxury brand to be a viable and successful car maker and the company is focusing on strengthening its core Ford brand.

A sale is not guaranteed, but in June Mr Mulally said the probability of selling the brands was greater than 50%.

Earlier this month, former Ford president and chief operating officer Nick Scheele was reported to have joined with New York-based Ripplewood Holdings in its bid for Jaguar and Land Rover.

Scheele served as Ford’s president and chief operating officer from 2001 until his retirement in 2005.

Scheele’s involvement pits him against Jacques Nasser, who was Ford’s chief executive from 1999 to 2001. Nasser is leading a separate bid by One Equity Partners.

alistairhoughton