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Jaguar and Land Rover go up for sale

By Ray Massey for the Daily Mail
Updated: 09:14 EDT, 12 June 2007

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Nearly 20,000 UK jobs could be at risk after Ford decided to sell iconic British car makers Jaguar and Land Rover.

Approaches from Fiat were apparently spurned and it is feared they could now fall into the hands of a private equity company.

The spectre of venture capital companies asset-stripping the two British legends has alarmed unions.

>> A history of the UK car industry

They fear there will be thousands of job cuts and at least one factory closure.

Jaguar has about 9,000 workers in the UK and Land Rover 10,000. Their joint head office is in Gaydon, Warwickshire.

Ford is understood to be selling the two brands together because of the level of overlap between them.

There are concerns that the two car-makers - which for cost-saving reasons share key facilities - are said to have 'one factory too many' between them.

The US firm has told merchant banks Goldman Sachs, Morgan Stanley and HSBC to sell Jaguar and Land Rover for the best price offered.

As the rumour mill went into overdrive last night, UK private equity firm Alchemy Partners - which once bid for Rover - was forced to deny it was preparing a £3billion bid.

In a bizarre statement, a spokesman said it was interested in Jaguar and Land Rover 'only at an emotional level'.

Both Fiat and French rival Renault have denied they are negotiating to buy the firms.

The announcement marks yet another British brand selloff after MG and Rover were sold to the Chinese, Bentley to Germany's Volkswagen and Rolls-Royce and the Mini to BMW.

Prime Minister Tony Blair and his deputy John 'Two Jags' Prescott both use specially-built Jaguar XJ saloons in their official capacities.

Detroit-based Automotive News reported yesterday: 'Fiat tried to buy Ford Motor's Jaguar and Land Rover luxury car brands - and Ford's apparent willingness to sell confirms that the US car maker remains very interested in finding a buyer for all or part of (Ford's) Premier Automotive Group, which also includes Volvo.'

>> Car brands: Who owns what?

Ford sold Aston Martin - also based at Gaydon - for £450m in March. There has been increasing speculation of a possible sale of Jaguar after the overall group revealed losses had widened to £ 6.5bn last year - the largest deficit in the company's 103-year history.

Despite repeated denials by Ford - which ploughed £1.2bn into the business last December - industry experts said it was only a matter of time before Jaguar and Land Rover were sold.

Land Rover's main Solihull plant in the West Midlands is believed to be most vulnerable to closure, having already been given a warning to 'shape up' or face closure. Production of the Land Rover Freelander has already been switched to the former Jaguar plant at Halewood on Merseyside.

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Experts suggest that in future all Land Rovers could be built at Halewood, with all Jaguar production at Castle Bromwich in the West Midlands.

In a typically unsentimental move, Ford shut Jaguar's historic Browns Lane assembly plant in Coventry in September 2004 with the loss of 2,000 jobs.

Ford's main board in Detroit has been struggling for months to tackle the global crisis and £3.55billion losses - with the fate of both Jaguar and Land Rover prominent on the agenda.

In January, Jaguar unveiled at the Detroit Motor Show a prototype of its 'makeorbreak' mid-range S-Type executive saloon - to be called the Jaguar XF - on which the firm said it was staking its future.

Ford chief executive Alan Mulally stated repeatedly that Jaguar was 'not for sale', though few believed that would be the case for long.

Ford's ailing Premier Automotive Group - which includes Jaguar and Land Rover - almost trebled its pre-tax losses last year, from £ 45m in 2005 to £166m in 2006.

However, these improved in the first three months of this year, when it lost £97mi, against £66m for the first quarter in 2006.

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