Ford hands Jaguar, Land Rover keys to Tatas
Indian Express — March 27, 2008

$2.3 bn buyout Ownership transfer by next quarter; $600 m for JLR pension plan; Jaguar brass to stay; union happy

Ratan Tata is finally in the driver’s seat of fabled British marquees Jaguar and Land Rover. After months of tortuous negotiations, Tata Motors today entered into a definitive agreement with The Ford Motor Company to buy Jaguar Land Rover (JLR). After settlement of the deal Tata Motors will own the Jaguar brands, plants and intellectual property rights (IPRs). The JLR deal comes a year after group company Tata Steel acquired British steel company Corus for $12 billion.

Tata Motors will pay Ford approximately $2.3 billion to settle the deal, of which $600 million will be towards contribution to the JLR pension plans. The transfer of ownership is expected to close by the end of the next quarter, subject to applicable regulatory approvals. “There is a lot of enthusiasm about the agreement and over a period of time we will gain substantial value from the deal,” said Tata Motors managing director Ravi Kant.

“We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business. 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,” said Tata Motors chairman Ratan Tata.

However, the deal will not affect the functioning of the company as the management has amicably decided to retain the top employees of Jaguar. “The assets of Jaguar Land rover will not be reflected in the Tata Motors balance sheet and they will function as subsidiary companies. The Jaguar Land Rover CEO has also agreed to stay back,” said Tata Motors chief financial officer C Ramakrishnan.

On the question of job cuts and issues with the Union, Kant said, “we are looking at a fruitful relationship with Unite (the Jaguar union).” Jaguar Land Rover’s employees, trade unions and the UK government were kept informed of developments as the sale process progressed and have indicated their support for the agreement, the company said. Unite has expressed happiness with the acquisition.

Unite had expressed its preferences for Tata Motors during the deliberations but is disappointed with Ford Motor Company for not retaining a small stake in the two brands and exiting them in its entirety. “We are happy with the development and glad about the fact that Tata has safeguarded jobs in Britain. Also heartening are the commitments given to the future of Jaguar Land Rover and the long-term supply agreements for components, especially engines, from Bridgend and Dagenham,” said Unite’s joint leader Tony Woodley.

Ford Motor company president and CEO 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.”

British marquees’ 123-year saga

1885: Rover brand starts life as Starley & Sutton Co’s Rover Safety Bicycle, which replaces the unstable penny farthing bicycles of its day

1903: Rover starts work on its first motor car, led by designer Edmund Lewis who joined from Daimler

1922: Motorcyclist William Lyons forms the Swallow Sidecar Company in Blackpool, England, building motorcycle sidecars

1927: Lyons enters car-making, crafting a two-seater body for the Austin Seven

1935: Jaguar name first used on a car

1945: Brand name given to the entire company

1947: Maurice Wilkes, technical director for Rover Cars, starts designing British agricultural vehicle based on American army 4x4s

1948: First Land Rover launched at Amsterdam Motor Show; production of 8,000 doubles next year

1949: British Army puts in its first Land Rover order

1966: Jaguar merges with British Motor Corporation

1967: Rover becomes part of Leyland Motors

1968: Leyland Motors merges with British Motor Corp to become British Leyland

1970: Land Rover launches Range Rover, with independent suspension and new V8 engine

1975: British Leyland part nationalised

1984: Britain’s Conservative govt privatises Jaguar

1988: Conservative govt sells Rover Group to British

Aerospace for knockdown price of £150 mn, overlooking rival offer from Ford Motor Co

1989: Ford approaches Jaguar with offer, whicheventually leads to a deal

1994: Germany’s BMW buys Rover Group from British Aerospace for£800 mn and assumes another £900 million in debt

March 2000: BMW admits Rover Group sale (dubbed ‘The English Patient’ by German media) is one of several scenarios being looked at, after Rover losses weigh heavily on BMW’s 1999 profits

May 9, 2000: BMW hands Rover Cars to Britain’s Phoenix consortium, a group of British businessmen led by former Rover chief executive John Towers. Phoenix paid a nominal £10 for Rover in deal sweetened by inclusion of £500 mn loan to new owner May 24, 2000: Ford buys Land Rover for $2.7 bn from BMW; Land Rover’s $465 mn long-term debt retained by BMW

2007: Ford confirms it has hired financial advisers to advise on possibility of selling Jaguar and Land Rover March 26, 2008: Ford Motor Company sells Jaguar and Land Rover to Tata Motors