mustangfun101

SAN FRANCISCO (MarketWatch) -- Ford Motor Co. is preparing to inject 500 million pounds ($935 million) into Jaguar, the loss-making luxury car maker it acquired in 1989, the Sunday Times of London reported.

Ford will inject $935M into Jaguar unit:

Jaguar, maker of the XK, XJ, S-Type and X-Type, lost 601 million pounds ($1.1 billion) in 2003 amid spending on product development, worse-than-expected sales and a plunge in the U.S. dollar versus the British pound. That loss included a 533 million pound write-down in the value of its assets, the newspaper reported.

The carmaker's losses for 2004 may well have run into hundreds of millions of pounds again, however figures aren't yet available, the paper added.

The amount of extra capital to be injected by Ford (F: news, chart, profile) is likely to match exactly the size of the 2003 assets charge, the Sunday Times of London said, citing an unidentified "senior Jaguar source." The timing and method of the re-capitalization hasn't been decided yet, the source told the newspaper.

Jaguar doesn't manufacture cars in the U.S., so changes in the exchange rate between U.S. dollars and British pounds have a big influence on its performance. As the dollar has lost value versus the pound in recent years, that's made Jaguar cars more expensive in the U.S., compared with vehicles produced in America.

Because of this, Ford has considered shifting Jaguar manufacturing to the U.S., a move it last contemplated a decade ago, the paper explained.

Mark Fields, vice-president of Ford's Premier Automotive Group, which includes Jaguar, Volvo and Aston Martin, denied any plans to make Jaguars in the U.S., the newspaper added.

jgsmuzzy

Nice find John, Rumours here are rife that production will be switched to the states. Peronally, I wouldn't be at all suprised (I work for an large American company that manufactures in the UK)

mustangfun101

It seems with the exchange rate it might be the only option. I'm sure Ford still owns the property on those plants they closed in the 80's/90's. I would hate to see Jags being assembled in the U.S., there is just something wrong with that picture. I saw earlier today that Aston Martin could make Ford over 1 billion in revenue with almost 600 million being profit. Maybe it's just the current Jaguar lineup or the fact if Ford shared even more parts with Jag the purest would have more of a fit then they already do. Personally, I think if they move here they will end up killing the line. It would be a sad day. I think Jag purest who truly love the car should allow more product sharing so the line could stay a bit more profitable and stay in the UK.

I just happen to see it on the financial page first, it's going to be big news when things open up tomorrow.

Zastava_101

Maybe Jaguar will be saved after all.

Evil_Capri

Someone has been watching Autoline Detroit with John McElroy!

That's a fine line with product sharing. Does Ford allow more product sharing for Jaguar, or keep the brand a little more exclusive, BUT manufactuer some product in the USA? Seeing that MB, and BMW now manufacture vehicles in the USA is Jaguar subjected to UAW rules if Ford started manufacturing Jaguar's in the States? Seems like if Jaguars were in fact manufactured in the USA in an exisitng Ford plant the UAW would be involved. (Not saying this is a good or a bad thing, just stating an observation.)

Seems like Ford would have to invest into a new plant outside of the UAW grasp to have a Jaguar plant in the USA.

mustang_sallad

i know its off topic, but would one of you care to explain how a low volume brand like AM could make ford $1billion? I just can't see it. Maybe... that's like 10,000 $100,000 cars, or 5000 $200,000 cars. I guess that makes a bit of sense... but please elaborate.

mustangfun101

I gotta watch something while I run on the treadmill.

I'm not sure how they got those profit figure, I just repeat the news. I'm sure it has to do with cost of production vs. sale price.

jsaylor

More or less you said it yourself. Remember that revenue and profit are two different things so Aston wouldn't really be "making Ford" 1 billion dollars, more like the 600 million mentioned elsewhere in the article. Also keep in mind that Aston performs a lot of services for customers that other Ford brands don't, like conversions and restoration. These add a lot of money to the bottom line as well.

Finally, these profit numbers are likely taking into consideration the new AMV8 which Ford expects to sell a lot of and which should add considerably to Astons already juicy bottom line.

mustangfun101

They were including AMV8 in those numbers.

jgsmuzzy

THat $1bn figure, I cannot see that being 1 year either. maybe a 3 year plan? Also, 600k profit from 1bn revenue, someone has latched onto a tremendous business model! I am not disputing what you heard Jeff, just the accuracy of numbers.

J

mustangfun101

I am the one who heard the report and I agree it seems strange but that's Fords story.

Evil_Capri

I watched the same show as John, and I think (or thought) it was $100M in profit. I could be wrong though . . . .

jsaylor

That sounds more reasonable.

mustangfun101

From Detroit News Auto Section:

In addition to improved North America results, Ford is counting on its struggling Premier Automotive Group -- made up of Jaguar, Volvo, Land Rover and Aston Martin.

Ford sees the group swinging from a 2004 loss of $740 million to a pre-tax profit of $300 million to $600 million this year.

Evil_Capri

All I can say is thank goodness for Volvo . . .

mustangfun101

So, the word is PAG as a whole and not just Aston Martin like they put out on Autoline Detroit. :bang:

So Jaguar isn't hurting them too bad if you lump it in with the rest of the PAG. It's going to be interesting what Ford does with Jaguar in the near future.

Zastava_101

I really don't get this. Pretty much all Fords vehicles were selling great last year, but they still lost a lot of money. How is that possible?

Birdman3

Jag got more $? Does this mean I can start nagging at them to build the F-type again? ^_^