Ford Motor Co. is still evaluating bids from three
suitors for its Jaguar and Land Rover units, and a sale is not
likely until early in 2008, according to a person who has been
briefed on the negotiations.
Indian automakers Mahindra & Mahindra Ltd. and Tata Motors Ltd.,
as well as U.S. private equity firm One Equity Partners LLC are in
the running for the units, submitting bids that range from US$1.5
billion to $2 billion, said the person, who requested anonymity
because the talks are confidential.
As recently as Monday, Ford chief executive Alan Mulally
reiterated the company's statement that a sale probably would be
announced late this year or in the first quarter of next year, but
the person briefed on the talks said Thursday that the price tag is
still being negotiated, bidders are awaiting clarity on pending
European Union auto emissions regulations, and other issues remain
before the sale can go through.
Among the issues is Ford's parts supplier relationship to the new
owners, the person said. Ford supplies engines for Jaguar and Land
Rover vehicles and wants that relationship to continue, the person
John Gardiner, spokesman for Ford's Premier Automotive Group,
which includes Jaguar, Land Rover and Volvo, would not comment on
the bidding, but said Ford clearly is interested in its parts supply
relationship with any potential buyer.
``We recognize the significant connection between Ford and
Jaguar-Land Rover in terms of component supply, engineering,
manufacturing, and any sale would need to take that into account,''
All three bidders met in November with the British government,
labour unions and Ford about the sale.
Labour unions in the United Kingdom are seeking assurances that
the sale would not affect employment levels. Combined, Jaguar and
Land Rover employ about 15,300 in the U.K.
Jaguar's main union, Unite, has said in a statement it would
prefer Tata if the company is sold.
Cash-hungry Ford, which lost $12.6 billion last year but earned
$88 million in the first nine months of 2007, has been looking to
sell Jaguar and Land Rover.
It has mortgaged its assets to borrow money to stay operating and
expects to burn up $12 billion to $14 billion until 2009, when it
plans to return to sustained profitability.
Jaguar and Land Rover have been hit by unfavourable exchange
rates and high production costs in Britain.
Jacques Nasser, Ford's chief executive from 1999 to 2001, is
involved with the bid from One Equity Partners, an affiliate of
JPMorgan Chase & Co.
Ford bought Jaguar for $2.5 billion in 1989 and Land Rover for
$2.7 billion in 2000, joining them with Aston Martin and Volvo to
form its Premier Automotive Group. Ford has not said how much it
wants for the combined units.
Earlier this year Ford completed the sale of its controlling
stake in Aston Martin for $931 million in cash and preferred stock.