Tata's prospective purchase of Jaguar and Land Rover from Ford is reportedly foundering on Tata's insistence on price guarantees for Ford engines. The Detroit News quotes sources "close to negotiations" (as opposed to?) as saying Ford is unlikely to agree to any such guarantees in light of price increases in key commodities. Garel Rhys, director of the Centre for Automotive Industry at Cardiff University, calls Tata's request "absurd, and they know it." BUT Rhys reckons it's in Tata's interest to drag-out the purchase process while it secures financing. And, perhaps, a better price. With no other offers tabled for the two FoMoCo "premier" brands, the Blue Oval Boyz have little choice but to duke-it-out with Tata. Ford's "Wish We'd Gone from Sir Anthony Bamford" deal has already been pushed past two informal deadlines. Ford now says an agreement with Tata Motors is expected "mid year."
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Wow, this sort of puts Ford in the seat they’ve put their suppliers in. It will be interesting to see how this pans out.
I think the title of the article is a little off base. Why throw in “Doubt”? Nothing in the article referenced says that engine supply issues are a deal breaker at this point. A more accurate title would be, “Tata Purchase of Jaguar and Land Rover negotiations. Continue. Still.”
Christopher: I get your point, but I think the facts of the matter speak for themselves. The press has reported the Tata agreement as "weeks away" many times. Clearly, this purchase is faltering. As I discuss with Justin in the Daily Podcast (up later), every day that goes by makes it LESS likely Tata will seal the deal. The economic downturn, the credit crunch, union intransigence, Tata's sagging stock price, etc. all are conspiring against completion.
I agree with Orian maybe Tata should contract with Ford to buy the engines and have the ownership of the tooling in Tata’s name and simply seize the tolling and ship it off to someone else when material costs go up. What goes around comes around.
FORD has been telling the press…the deal is weeks away. One year (or is it longer?) no deal is in place. Ford would be better off giving Tata these two brands.
Jag hasn’t made a cent for Ford since they bought the company for 4 BILLION DOLLARS.
One source says Ford has invested over 20 BILLION DOLLARS in Jaguar.
If Ford wants to say ta ta to these two slugs, they better make a deal NOW.
I wonder if the brain trusts at Tata are reading TTAC?
If so, maybe they have come to their senses.
Who, in their right mind, would want these two no-sells…for any price?
@ BKW,
Well said. I ask the same question. Aside from total lack of profit potential for this combo, why would Tata pay for something Ford would surely end up giving away eventually. No one else wants them and Ford can’t afford to keep them much longer.
I keep thinking about the new Jag / Land Rover dealer near my home. He spent 5.8 Mil for the building and land.
I think Tata wants these brands to give them credibility. Many people in the world have never heard of Tata. But those people all know who Jaguar and Land Rover are. If they treat them as specialty lower volume vehicles and have the money to nurture them, it will open up many markets for other products.
I have to wonder if Ratan Tata (the head honcho) is having second thoughts, as well. After all, as soon as this deal was announced, Tata stock dropped fairly significantly.
Interestingly, Tata is worth more on the stock market than General Motors, which speaks volumes about GM as well as the prospects of India.
Mr. Tata? You’d be honestly better off to take the slow lane and grow your company brand worldwide organically instead of through purchasing losers like Land Rover and Jaguar.
Literally, (money) losers.
I’d “love” to see how much money shareholders, British Leyland’s (British taxpayer) money, and Ford money have been p!ssed away through Jaguar and Land Rover over the past 1/2 century. I think people would be shocked.
Kill ’em off, already.
GM should do the same for Saab (only in that case, it was “murder”).
Land Rover has been profitable for quite some time… how do car people not know this, but still feel the need to opine?
Land Rover has been profitable? Since when, 2007?
How about posting a few yr to yr sales figures.
What I’ve read in AutoNews and other publications is sales have been just awful till recently. The warranty costs to fix the piles have been enormous, another reason for Tata to pass on the purchase.
Why is Tata the only serious bidder for Jag and Land Rover? No one else on the planet wants them. There has to be more than one reason for this scenario.
Poor sales, huge warranty costs & zero profits would be my guess.