Monday, June 02, 2008

Ford Unloads Jaguar and Land Rover

Ford (F) just unloaded jaguar and Land Rover to the Tata Group. Almost everyone expected the deal to close. Ford of course took a big hit and lost billions of dollars. The precious little cash that they sourced was partially earmarked to top up a pension plan that they have been neglecting. But at least they can say that the have partially staunched the flow of financial blood.

In the press release there is a line that says “As part of the overall deal, Ford said it will continue to supply Jaguar and Land Rover with engines, stampings and technology.” No financial numbers have been provided to support this statement. But it is highly unlikely that Ford will not feel some very intense pressure in this area and may be found lacking. Tata Group is not about to put up with Fords nonsense.

Look for adjustments to the purchase price as Tata drives this one around the block and comes back on warranties and representations.