Doug Harden 08-31-2006, 09:58 AM Ford to explore sale of Aston Martin
No decisions made about firm’s other luxury auto brands
The Associated Press
Updated: 8:42 a.m. ET Aug 31, 2006
DETROIT - Ford Motor Co. said Thursday it is exploring the possible sale of all or part of its Aston Martin luxury brand as the company works to free up cash to pay for its North American turnaround plan.
But it said no decisions have been made about its other luxury car brands which include Jaguar and Land Rover.
“As part of our ongoing strategic review, we have determined that Aston Martin may be an attractive opportunity to raise capital and generate value,” Bill Ford, the automaker’s chairman and chief executive, said in a statement.
He said the Aston Martin’s dealer network, design and size are different from other Ford brands and the most logical choice for possible sale.
He said no decisions have been made about its other Premier Automotive Group brands.
“We continue to be encouraged by Jaguar’s progress and by the strength and consumer appeal of the Jaguar, Land Rover and Volvo product lineups” he said.
In July, Ford pledged to speed up and possibly deepen its North American turnaround plan.
Dearborn-based Ford’s “Way Forward” plan, launched in January, calls for shedding 25,000 to 30,000 jobs and closing 14 plants by 2012 to help return Ford’s North American automotive operations to profitability.
© 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
URL: http://www.msnbc.msn.com/id/14599981/
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Doug Harden 08-31-2006, 09:59 AM Related story:
http://www.msnbc.msn.com/id/14585542/site/newsweek/
Doesn't Aston Martin make money? I wouldn't get rid of that brand.
Z284ever 08-31-2006, 10:53 AM Doesn't Aston Martin make money? I wouldn't get rid of that brand.
Because of the way it's structured AM is probably more easily saleable than the rest of PAG.
Jaguar is tougher. How much does Ford have invested in Jag over the years? $5B? $10B? More? Ford has yet to make dime one on Jag. And if sold might only get maybe $1B for it. If I owned Jaguar, I'd simply refuse to take such a loss on it.
Maybe some creative partnering/management deal can be made with Nasser's consortium.
johnsocal 08-31-2006, 10:55 AM Im sure Jac Nasser and his private ‘Equity One’ investment group will most likely be the ones buying Austin Martin.
Good Ph.D 08-31-2006, 12:41 PM My feelings are mixed. I certainly understand the issue with getting rid of a profitable brand, and reducing share.
But Ford cant reallly exploit PAg at the moment, and they need the cash...
Of course it they flush it the way they are doing everything else as of late, it wont make a difference.
91_z28_4me 08-31-2006, 02:11 PM Maybe there are two things working here. Ford could sell AM outright for operating cash and Jac & Co. could be brought in as investers/partners to right the Jag/LR ship.
Jaguar is tougher. How much does Ford have invested in Jag over the years? $5B? $10B? More? Ford has yet to make dime one on Jag. And if sold might only get maybe $1B for it. If I owned Jaguar, I'd simply refuse to take such a loss on it.
In making business decisions a sunk cost must be ignored. It doesn't matter how much ford spent on Jag. It only matters what they can sell it for or how much they can make it they keep it.
georgejetson 08-31-2006, 08:08 PM The thing about Aston Martin is that it's kind of self-contained. They have their own platform and engine family, they have strong product (and good new product in the pipe), they have a great management team, and they're making money. If you're Ford and you need to dump an asset (like maybe to raise money to take the company private), Aston is something that can be sold quickly and at a good price without significantly impacting the core business. Volvo has been too heavily integrated into Ford, and Jag and Land Rover are a mess. Aston is the jewel.
Mich84 08-31-2006, 08:57 PM Anyone think Kia/Hyundai is drooling? They wanted to launch a lux line, now here is one possibly for sale that is already up and running.
Chris_Doane 08-31-2006, 09:34 PM Anyone think Kia/Hyundai is drooling? They wanted to launch a lux line, now here is one possibly for sale that is already up and running.
Ugh...that's a scary idea. Please pony up the cash Jac.
landstuhltaylor 08-31-2006, 09:49 PM they cant do any worse than ford has
georgejetson 08-31-2006, 10:16 PM they cant do any worse than ford has
Actually, Ford has done great with Aston -- it's far more profitable now than it ever has been, and they've positioned it beautifully.
They screwed up Jaguar pretty thoroughly, though.
I don't see Hyundai buying Aston - they were looking for more of a mass-market brand (like Jaguar), and Aston does something like 5000 cars a year. It'll be private investors or maybe someone like BMW.
landstuhltaylor 08-31-2006, 10:18 PM sorry, i meant jag not aston
georgejetson 08-31-2006, 10:22 PM sorry, i meant jag not aston
Ah. Yeah, I totally agree.
Jaguar is tougher. How much does Ford have invested in Jag over the years? $5B? $10B? More? Ford has yet to make dime one on Jag. And if sold might only get maybe $1B for it. If I owned Jaguar, I'd simply refuse to take such a loss on it.
WERM's right about the sunk costs. And if it's not likely to turn a profit any time soon, might as well stop the bleeding now and pull some cash out. Not to mention it's a huge distraction for management; get rid of it and let them focus on their core brands. Although I wonder if Jag is too integrated with Ford to make it an easy sale.
As to Aston, they're also pretty tight with Ford. Their engines are based off the Duratec, and there's lots of Ford parts bin in the cars too. But nothing that couldn't be overcome. I think it would need to be another automaker that buys it though, so that they can leverage things like supercomputers, purchasing, logistics, regulatory compliance, etc.
TrackMagicWS6 09-01-2006, 01:46 AM Aston is the jewel.
Ford shouldn't pawn their Diamond.
:mad:
I'd Rather see merc discontinued.
Z284ever 09-01-2006, 10:22 AM WERM's right about the sunk costs. And if it's not likely to turn a profit any time soon, might as well stop the bleeding now and pull some cash out. Not to mention it's a huge distraction for management; get rid of it and let them focus on their core brands. Although I wonder if Jag is too integrated with Ford to make it an easy sale.
As to Aston, they're also pretty tight with Ford. Their engines are based off the Duratec, and there's lots of Ford parts bin in the cars too. But nothing that couldn't be overcome. I think it would need to be another automaker that buys it though, so that they can leverage things like supercomputers, purchasing, logistics, regulatory compliance, etc.
Oh, I'm just saying that's what "I" would do. Maybe it is smart to dump it at 10% of what you have into it, and stop the bleeding - it's just something that I could never do if it were MY money. Of course things are easier when you're dealing with OPM (other people's money), as the Ford decision makers are.
Anyway, the point might be moot. As you said, PAG and Jag in particular are pretty well integrated into Ford. In fact, I can even see some of the same switch gear in my father-in-laws' S-Type, as I can see in my SVT Contour.
Maybe that's part of the problem.
Jaguar is tougher. How much does Ford have invested in Jag over the years? $5B? $10B? More? Ford has yet to make dime one on Jag. And if sold might only get maybe $1B for it. If I owned Jaguar, I'd simply refuse to take such a loss on it.
That is kind of the gamblers mentality. I've lost $xxx but if I play long enough I'm sure I can win it all back. I've made that same mistake with stocks. Some times you just got to cut a dog loose, as much as you hate to take the lose, you have to stop the bleeding.
Z284ever 09-01-2006, 11:20 AM That is kind of the gamblers mentality. I've lost $xxx but if I play long enough I'm sure I can win it all back. I've made that same mistake with stocks. Some times you just got to cut a dog loose, as much as you hate to take the lose, you have to stop the bleeding.
That's kind of over simplistic. Gamblers don't control the cards. They play until they lose. And you can't control a doggy stock, you are just there for the ride.
Ford, on the other hand, controls EVERYTHING with Jag and the rest of PAG. They were in complete control when they decided that what Jag really needed was a spruced up Mondeo, called X-type. Thankfully, that car won't be replaced when it runs it's course. What a ridiculous waste of money (if it were MY money, that is), and energy. Woulda made a nice Mercury though.
The XK? If it were MY money, I would have sh!tcanned it, and used those resources to get the F-Type concept to market ASAP. I think part of the essence of Jaguar is an E-Type replacement...a role the F-Type would have filled beautifully.
Unlike the gambler who is pre-programmed to lose by his disease, Ford held all the cards from day one.
guionM 09-01-2006, 11:53 AM The XK? If it were MY money, I would have sh!tcanned it, and used those resources to get the F-Type concept to market ASAP. I think part of the essence of Jaguar is an E-Type replacement...a role the F-Type would have filled beautifully.
What's wrong with the XK? :confused:
The F type strikes me as having looks of a pure racer which might bring in a relatively young group, but Jaguar is an old money car company. Probally wouldn't be a car for the Jaguar faithful. The XK is more in line with what the 50-something, grey and balding guys who had a previous Jag and has a house in the richer part of town.
That plus the XK is the only Jag whose sales figures are up from over a year ago.
That hyper expensive all alumunum body on the XJ seems to have started the $$ drain for Jag.
Just my take on it.
That's kind of over simplistic. Gamblers don't control the cards. They play until they lose. And you can't control a doggy stock, you are just there for the ride.
Ford, on the other hand, controls EVERYTHING with Jag and the rest of PAG. They were in complete control when they decided that what Jag really needed was a spruced up Mondeo, called X-type. Thankfully, that car won't be replaced when it runs it's course. What a ridiculous waste of money (if it were MY money, that is), and energy. Woulda made a nice Mercury though.
The XK? If it were MY money, I would have sh!tcanned it, and used those resources to get the F-Type concept to market ASAP. I think part of the essence of Jaguar is an E-Type replacement...a role the F-Type would have filled beautifully.
Unlike the gambler who is pre-programmed to lose by his disease, Ford held all the cards from day one.
True, If they can get it managed correctly and maybe share some better platforms (volvo instead of Contour). Based on what Ford is doing with Lincoln and with the X-type, I don't trust then to return Jaguar into a profitable and highly respected luxury brand. It would be easier to just add a high end $75,000+ sedan to Aston Martin and gorup them with Range Rover to create a high luxury brand(s).
I'd rather see Ford keep all the brands and try and make it work, my main point is don't drop Aston Martin.
91_z28_4me 09-01-2006, 12:02 PM Why isn't Jag just sedan versions of AM's coupes? Would that not be a business model that would be both profitable and match the two companies up better?
Good Ph.D 09-01-2006, 10:20 PM A Maserati/Ferrari relationship between the two would be nice.
But I dont think its really possible, the AMs still have a lot of "hand made" in them. Im not sure if the factory setup would support it...
Add to that either way you go you're either going to make the AMs less competitive or the Jags too expensive.
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