Ford Injects $2.1 Billion Into Jaguar to Fund Reorganization
Ford Motor Co., the second-largest U.S. carmaker, has injected 1.2 billion pounds ($2.1 billion) into its unprofitable Jaguar luxury division to help pay for a reorganization at the company.
Ford made the investment by buying preference shares in the wholly owned unit, Jaguar spokesman Don Hume said in a phone interview today. The Coventry, England-based carmaker posted a 2004 pretax loss of 430 million pounds.
"Trading conditions at Jaguar have worsened in 2005, but the recapitalization underlines Ford’s commitment to the company", Hume said. He declined to say how the money will be used.
Jaguar last year ended manufacturing at a U.K. plant, fired 1,150 workers, and scrapped a plan to build 200,000 vehicles. Ford does not have a target for when Jaguar will break even. The division may cut production to 80,000 units next year, according to CSM Worldwide, a Detroit-based market researcher.
The recapitalization was approved by Ford at the end of 2004 and implemented this month, Hume said. Jaguar this week started production at its Castle Bromwich, England, plant of the aluminum- body XK car which will go on sale in March.
Jaguar’s pretax loss, contained in filings at the U.K.’s Companies House, narrowed from a 2003 loss of 600 million pounds and included an asset impairment charge of 173 million pounds, Hume said. The 2003 result was hurt by an impairment charge of 534 million pounds, he said.