Ford to Shut Luxury Car Unit's Headquarters in London
By Brian Lysaght
London, Sept. 3 (Bloomberg) -- Ford Motor Co.'s new luxury car chief Mark Fields is shutting the No. 2 automaker's Premier Automotive Group's headquarters in London's Berkeley Square to reduce costs.
Fields's predecessor Wolfgang Reitzle and as many as 25 executives were based at the 18th-century townhouse which is near the U.S. Embassy and was leased by Ford since 1999. Fields will move by November to Ford's Ingeni luxury car design center, in London's Soho district, said Stuart Dyble, a company spokesman.
Ford, which lost $5.45 billion last year, wants Fields to boost sales and profit at the European luxury brands that comprise the Premier group -- Jaguar, Land Rover, Volvo and Aston Martin. Sales fell last year as worldwide demand slowed under pressure from rivals such as Bayerische Motoren Werke AG.
The move is ``partly symbolic,'' said Karl Ludvigsen, president of London-based Euromotor Con******ts. ``It's a good idea for Fields to be closer to the operations of the business.''
Reitzle quit in April and only about 10 workers remain at the Berkeley Square site.
The decision to move is part of Fields's two-month study of Premier's business and product plans. Fields was president of Ford's Mazda Motor Corp. affiliate until he was named to lead Premier in July.
Brands vs Offices
The executive ``wants to direct spending toward product and development of individual brands'' rather than ``maintain two office locations in London,'' said Dyble. Fields wasn't available for comment.
The company wouldn't say how much money will be saved, though Dyble said it's ``minimal.'' There won't be job cuts.
Most Premier employees have moved from Berkeley Square to the brands' technical centers and factories, a shift begun under Reitzle. Others left the company.
Premier's 2001 sales fell to 836,000 vehicles from 866,000 the year before because of declines at the U.S.-based Lincoln brand, which is no longer part of the group. Ford has said it's aiming to sell 1 million luxury cars annually before 2010.
Ford's luxury vehicles, which range from the $30,000 Jaguar X- Type sedan to the $220,000 Aston Martin V12 Vanquish, generate annual revenue of about $30 billion. Ford doesn't break out the results.
Contrast With BMW
Premier's decline contrasts with Bayerische Motoren Werke AG's growth. BMW's unit sales last year rose 10 percent to 905,657 vehicles and revenue rose 3.3 percent to 38 billion euros ($38 billion).
Fields will shuttle between London, the Land Rover, Jaguar, Aston Martin sites in central England and Volvo in Gothenburg, Sweden. Premier has U.S. headquarters in Irvine, California.
Reitzle quit as group vice president on April 19 to become chief executive of Linde AG, a German industrial gas company. The departure came as Chairman and Chief Executive Officer William Clay Ford Jr. reshuffled his management team to stem losses.
Reitzle, a former BMW executive, was hired three years ago by then-Chief Executive Jacques Nasser, who was ousted by Ford in October 2001. Ford is paying Reitzle 2 million euros over two years as a con******t.
Ford shares fell as much as 79 cents, or 6.7 percent, to $10.98 and were down 5.7 percent at $11.10 as of 12:07 p.m. New York time after UBS Warburg analyst Saul Rubin downgraded the stock to ``reduce'' from ``hold.''