Maybe Ford ought to keep them
Ford Motor Company has again deferred the deadline for bids for the Jaguar and Land Rover units, according to Reuters. This time, there’s no firm deadline.
The official explanation is that the bidders – who are One Equity Partners, Ripplewood, Terra Firma, TPG, and Indian carmaker Tata Motors, require additional time to complete “due diligence.” Ford had earlier been reticent about releasing operating details of the company.
Elsewhere, it is being reported that Ripplewood, should it be the winning bidder, would maintain Land Rover’s current production levels, but would gut Jaguar. It would cut Jaguar production to 60% or less of its current capacity, seeking to brand it as a low volume luxury car maker, placing particular focus on China.
Jerry Flint, auto industry for Forbes Magazine, has long chided Ford for the decision to sell these divisions, which one stock analyst calculates could bring as much as $1.5 billion. His theory is that Ford’s done all the dirty work, and is bailing just as it might begin to pay off. Ford has invested heavily in new plant and equipment, as well as the latest new Jaguar model. Flint figures it ought to stick around to reap the rewards.
Maybe he’s right. It is evident that Ford isn’t going to get the money they wanted for the brands. The equity market has tanked, and the buyers are all vultures, with the exception of Tata. That they want to buy should give Ford the distinct impression that it shouldn’t sell.
Meantime, there’s always the chance the buyers will make the decision for Ford. That the company has to keep postponing the deadline is not an encouraging sign. What is perhaps more likely than that the potential investors (other than Tata) are requiring more time to assess the worth of the company is that they require more time to find financing. If that’s the case, this deal might just be on the rocks permanently.