US:Is Jaguar an endangered species for Ford?
Is Jaguar an endangered species for Ford?
DETROIT -- Ford Motor Co. refuses to give up the luxury car Wall Street says it can no longer afford to keep.
Ford, which unveiled its third restructuring plan in five years today, said its Jaguar luxury brand was not for sale, although it said it would continue to study options for the money-losing luxury car line.
"Jaguar is not for sale," Mark Schulz, president of Ford's international operations, told reporters and analysts. "We're encouraged with (Jaguar's) progress and believe Jaguar is on track for right now".
The news disappointed analysts and investors who see a potential Jaguar sale as an opportunity for Ford to raise cash and shore up its balance sheet as it embarks on a restructuring that includes cutting nearly 45,000 jobs by end of 2008.
Ford said earlier that it was looking to sell Aston Martin, and some analysts hoped to see the automaker move ahead with other asset sales.
"Taking Jaguar off the table was a surprise," said Efraim Levy, a Standard & Poor's equity analyst, who called the decision "more of a negative than a positive."
"Selling it would mean getting rid of a money-losing operation, getting some cash proceeds and focusing more on core brands," he said.
Ford bought Jaguar, an iconic British brand, known for its leaping cat hood ornament, for $2.82 billion in 1989 but has struggled to make money with the brand since.
The U.S. automaker resurrected Jaguar once, for which former Ford President Nick Scheele was honored with a knighthood.
But in recent years, Jaguar has faltered due to a lack of diesel engine-equipped cars for Europe and lackluster sales of its entry-level X-Type sedan, which lists from $32,995 in the United States.
Jaguar's sales are down nearly 31 percent so far this year in the United States, the company's largest market.
"It's a liability," said Erich Merkle, analyst with IRN Inc, referring to Jaguar. "They really don't have the wherewithal to maintain a brand that isn't profitable."
Jaguar made money in the late 1980s through high U.S. sales and a weak British pound.
The sales picture changed after Ford bought it and the Detroit automaker had to tackle three issues: poor quality, poor facilities and a hefty cost structure.
Ford invested in the brand to turn it around. Last year, Ford cut 1,150 Jaguar jobs in England, scaled back production at its Browns Lane plant in Coventry and shifted output to another factory near Birmingham.
But the measures were insufficient and profitability is still not within reach, analysts said.
Ford does not break out the financial of its individual brands but is forecasting full-year operating losses at its luxury unit, Premier Automotive Group, which includes Jaguar, Aston Martin, Volvo and Land Rover.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....