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Ford Sells Jaguar Land Rover to Tata Motors for $2.3B

Ford Motor Company has entered into a definitive agreement to sell its Jaguar Land Rover operations to Tata Motors for approximately US $2.3 billion in cash. At closing, Ford will then contribute up to approximately US $600 million to the Jaguar Land Rover pension plans.

The transaction is the culmination of Ford’s decision last August to explore strategic options for the Jaguar Land Rover business, as the company accelerates its focus on its core Ford brand and “One Ford” global transformation. The sale is expected to close by the end of the next quarter and is subject to customary closing conditions, including receipt of applicable regulatory approvals.

As part of the transaction, Ford will continue to supply Jaguar Land Rover for differing periods with powertrains, stampings and other vehicle components, in addition to a variety of technologies, such as environmental and platform technologies. Ford also has committed to provide engineering support, including research and development, plus information technology, accounting and other services.

In addition, Ford Motor Credit Company will provide financing for Jaguar and Land Rover dealers and customers during a transitional period, which can vary by market, of up to 12 months.

The parties believe these arrangements will support Jaguar Land Rover’s current product plans, while providing Jaguar Land Rover freedom to develop its own stand-alone capabilities in the future that will best serve its premium manufacturer requirements.



Not only does Ford need the cash and relief from the contracts, but this should make it easier for Ford to qualify for the upcoming fuel efficiency mandates in Europe and the USA.

Now if only they had some more fuel efficient Volvos.


Ford may need the money, but they ain't gettin' much money. $2.3 billion minus $0.6 billion for pensions minus powertrain, stampings & components minus Jaguar & Land Rover dealer financing for up to a year....

Considering Ford paid $5+billion for both companies years ago, Ford waves good-bye to lots of money.


Financing companies have been cash cows for these car companies (unless they are forced to do very low APR financing to move the product).

Supplying them with powertrains does not mean giving away for free...it means selling powertrain components. The services is where it hurts but the accounting probably shows the profit from component sales covers these costs.

Now what is unknown is how much Ford would have owed for pension & healthcare plans if they kept Land Rover and Jaguar. I bet it would have been significantly more than $600 Million in the long run.


Ford likely kist chopped a billion or more per year off its expenses that way.


The two above commentaries say why buying high & selling low is good economics. Of course, they aren't the ones buying high & selling low.
Sure, Tata will pay for Ford equipment & financing. You get no points for that observation. But Ford ain't goin' to make any profit & their are no happy Ford faces for losing billions.



You better look again at your earlier comment:

QUOTE: "...minus powertrain, stampings & components, minus Jaguar & Land Rover dealer financing for up to a year..."

I get "no points for" my observation yet you made the exact opposite assumption. You stated Ford is losing money because they will sell equipment to Tata. Granted dealer financing is not as advantageous as consumer financing.

I suppose if it were your choice you would just hold on to these divisions? This isn't a stock for your retirement fund where you are looking for 30-40 years of growth and ignore a little road bump along the way. This is a company with a flagging division bleeding money every year and sucking up profits from other divisions in an effort to subsidize the flagging division. Better to take a loss and free up cash every year to put into R&D on fewer products than to "hold out" in hopes of breaking even while having much less cash available to spread out on R&D over more products.


Depends on why ford really got em in the first place... if it was a tech/ip patent raid then likely ford is perfectly happy as the net loss is a tax write off and they didnt get stuck with the pensions and healthcare.


The best decision would have been NOT to have ever bought Jaguar & Land Rover. The 2nd best decision would have been to sell the gas hog companies BEFORE gas escalated in price, not AFTER. That is why I made the exact opposite assumption from you that all the strings attached extras were continued Ford losses. I bet I could not only sell you the Brooklyn bridge, but sell it to you after it had rusted away. You would have found a tiny market for iron oxide & been happy. Writing off losses is NOT making money & gas hog patent technology isn't going to make any money either. Tata won, Ford lost.


Jaguar was the base for the Lincoln LS. They made lot of money on high margin SUVs in the 90s and thought they would buy some European technology to build a world car. The LS is no longer made so this should not be a problem. They will hang on to Volvo and Mazda for obvious reasons.

The one question in the mix is will people continue to buy Rover and Jaguar from an Indian company that makes the world's lowest priced car, the Nano? Will they buy them now, considering that service and parts will have to come from this company? I think that they probably will, but Chrysler had a similar problem when bought by Cerberus. They had to add lifetime warranties to entice buyers and reassure them that they were not buying something that would not be supported.


ford wasent losing money from these companys, jaguar sales are slumping, but not far, and land rover sales are actully up. - bad sell, prestigues company. ford took many design elements from these cars. im dissapointed.

you guys have to remeber the cars are 40k-90k doallars, you think they can afford $4/gallon gas? people will always need suvs, to tow/family hall/go offroad.

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