In a memo to Ford employees, CEO Bill Ford Jr. asked for patience as the automaker evaluates what action to take to improve its financial situation. Yesterday, rumors broke that Ford might consider selling loss-making Jaguar, as well as implement restructuring at the Premier Automotive Group as a whole, which include Volvo, Aston Martin, and Land Rover. The speculation emerged after Ford announced it had hired merger specialist Ken Leet to evaluate the situation at the PAG. Pressure increased further on Ford to take action after it announced yesterday evening that its Q2 loss was actually $254 million — double the initial report. See Mr. Ford’s full statement after the jump…
Bill Ford:
As you know, our response to the challenges to our business is the subject of ongoing speculation in the news media, on Wall Street, and in our own hallways and lunchrooms. That’s to be expected at a time of great change in our industry and renewed urgency among all of us.
That’s why I want you to hear directly from me how I view our situation.
First of all, the company’s top priority remains the turnaround of our North American operations. As I said when we released our second quarter financial results, Mark Fields and his leadership team are accelerating their efforts, and we expect to tell you in the next couple months what additional measures we will take. These measures may be difficult, but are necessary.
Secondly, I will continue to evaluate the rapidly changing landscape of our industry and review the best ways in which we should adjust. That’s why I’ve hired Ken Leet to assist me and our senior management team in evaluating our business and exploring strategic options. You can read more on Ken in the news release below.
Contrary to speculation, nothing has been decided and we will not rush to judgments. I’m proud of the progress that our operating units and brands around the world are making. Nearly all of them have been through turnaround efforts and have improved as a result. They will continue to pursue the strategies that have guided their progress.
And, as we’ve said before, Ford Motor Credit Company is a strategic asset to Ford that generates solid profits and dividends. The automotive financing unit continues to have strong business fundamentals and provides key support for Ford vehicle sales worldwide.
It is prudent in a time of rapid change in our industry for us to carefully examine all of our options. In the meantime, however, all of us must continue to remain focused on doing our part to get our company on the path to sustained profitability and success.
Thank you for your continued support of Ford Motor Company.
[Many thanks to Eric for the tip]



08/03, 11:28 AM
posted by:
nick
Sell Astin Martin and Jaguar to BMW to give them something to compete against VW owned Bently
Maybe BMW will take Land Rover back…
08/03, 11:28 AM
posted by:
nick
And please let Mazda go! Don’t drag them down!
08/03, 11:30 AM
posted by:
British_Rover
Dude where is my car company?
08/03, 11:55 AM
posted by:
Greg
Yah, Ford, let them alone. You almost killed the Jaguar and Volvo. STOP right there!
08/03, 12:20 PM
posted by:
al
i say give volvo to mercedes
give jaguar to the french (peugot, renault or citroen)
give aston martin to BMW
and keep land rover
08/03, 12:50 PM
posted by:
David
As noted in a bunch of the analysts write-ups, the difficulty is that car divisions (unlike years ago in the conglomerates or prior to integration of platforms/development), Jaguar may be the only group that could be spun off / sold without it hurting the development of core brands to Ford. Now that the LS and TBird are gone, I believe the S-Type is the only vehicle on that platform (which never moved over to the S80) and the X-type is canned so there is no overlap with the Mondeo anymore. Unfortunately, with it being the only brand that could easily separate from PAG and thus Ford Motor, it’s likely the lowest market value brand they have. They could like couple Aston Martin with Jag as they share some bones from the DB / Vanquish series with the new XK.
Volvo and Land Rover, the two most valuable, are key to the development of new cars and SUV’s in the F/L/M brands.
I think a link up between a Nissan/Renault or a Japanese may be the most likely. It’s odd to see that now the Ford family may be willing to make these changes whereas 5 years ago when they were talking about buying/merging with BMW, the family had no desire to do so.
08/03, 1:05 PM
posted by:
S P
A fundamental question is not if Ford should parse out the PAG, the more important question is which marques, and how?
Strategically, I believe Volvo is a good fit for Ford – a lot of the technologies get filtered down – especially those that relate to saftey. As we saw today with the recall, Ford needs all the help it can get in this area.
One option for Ford is to separately sell off Aston Martin, however, AML is really showing promise for PAG and provides Ford with a high-end sports car. From a retail perspective, they have 3 strong model lines and most of their retail stores are adjacent to a Rolls-Royce/Bentley retail store. This has not been a problem (surprisingly) since VW took Bentley and BMW took over R-R. Aston, however, is probably the only unit right now that would fetch any sort of a premium.
That leaves us with Jaguar and Land Rover. These two marques are inextricably tied together in the USA, and will likely remain so because of the synergy that this creates. Jaguar will likely never try to produce SUVS – it would do quite poorly, and Land Rover is clearly not a company interested in producing 2-door coupés. While Land Rover has shown some promise in the last couple of years, Jaguar has been hemorrhaging money for some time. This was evidenced when PAG opted to close the Coventry facility. At any rate, Jaguar has always faced stiff competition in the luxury car segment. R&D seem to lag compared to BMW and Mercedes-Benz. Because of this, PAG will have some difficulty getting the kind of offer they would like for Jaguar.
This all means that PAG will first look to keep the group together and probably look to reduce costs. This however, is a double-edged sword because cutting R&D is exactly what Jaguar does NOT need. Quite the opposite in fact! Ford also has other problems at home in the USA, which is fundamentally why we even bring up PAG in the first place. That, however, can be explored elsewhere.
08/03, 2:10 PM
posted by:
Dav
as much as it pains me to say this, selling Aston Martin and Land Rover to BMW would a very good move, as they already had Land Rover once, and the sale of Aston Martin to any other corporation would be a devestating move, as a sale to say, Mercedes, would end the company, it would quickly lose its reputation with any Asian corporation, and GM, well…enough said. as for Volvo, VW AG is the best for them, but then they have cars to fit all the slots, several times over, so who knows. cant wait to see how it all turns out.
08/03, 2:26 PM
posted by:
Atomicbri
Ford could keep all the PAG Brands if they would fix their own house…. FORD NEEDS CARS TO SELL…TRUCKS AND SUVs can not be depended on anymore. They need to scrap the Focus and get the new one here ASAP…. something FRESH, not FACELIFTED. Also they need to speed up the B Car Segment. If Ford could start making money then they could inject some more into Jaguar. If I had the money I would buy Jaguar….They have a lot of heritage, but Ford has let them be too timid to create some really new and exciting designs. They need a svelte, swoopy 4 door in the lines of the Mercedes CLS and they need to dump off the X TYpe, try that out at a later time…..
Ford needs to see why they are losing so much money. PAG is actually not doing that bad when compared to Ford’s hemmoraging….
08/03, 3:44 PM
posted by:
Dav
Atomicbri, as much as i agree with you and know that you’re right, i have to say, Ford really should sell those brands; they’ve done next to nothing in order to really advance them as companies, just made them into different versions of Fords, other than Aston Martin. But in my opinion, Aston is embarassed to be associated with Ford, as are Jaguar, Land Rover, and even Volvo. The wors really just needs Ford to get rid of these particular companies, build cars over trucks and SUVs, and send Bill Ford to an island from which he will never escape.
08/03, 3:51 PM
posted by:
Atomicbri
Dav I agree also, I am just afraid as to who would buy Jag or Aston…. Toyota? Now that would be a really weird scenario….Ford could also close up Mercury and Lincoln actually.. They have soiled both of those names as well…. I mean what Lincoln does any one want? Even GM got smart and up the ante at Cadillac. Mercury should have been closed once the Cougar was gone.All it is now are rebadged Fords with a spiffier interior….Why not just offer a spiffier interior option on the Fords and save money by not rebadging Mercurys….
08/03, 3:56 PM
posted by:
Ben
I dont think the problem is the PAG. Ford itself is in a bad state in the US. And that is why they are losing money. In the UK Ford now have a very good range, New Focus, New Galaxy, S-Max… If they would bring them to the US, I think it will take away the problems.
08/03, 4:00 PM
posted by:
British_Rover
Land Rover, jaguar and now volvo are sharing a lot of components. Land Rover uses Jag engines for just about all of their vehicles now, the V6 LR3 is the only non-jag engine, and next year the LR2 will use a Volvo motor. That right there is going to save a lot of money. This time next year Land Rover will have four distinct models in the US. That has never happend before ever and you are going to see their volume just really surge. That and now that just about all of the old bad Land Rovers are out of warranty you are going to see a big drop in warranty claims.
08/03, 4:18 PM
posted by:
stuart
SELL MAZDA TO MERCEDES. THEY CAN MAKE DECENT PLATFORMSAND ENGINE SO IT MAKES SENSE TO SHARE THEM WITH DODGE.
08/03, 7:24 PM
posted by:
Franz Steinleitner
Volvo and Land Rover to go to Renault.
Jaguar and Aston Martin to go to Peugeot.
The French, bless them, would be better custodians of these marques than any Asian prospective buyer.
08/03, 7:32 PM
posted by:
Manster
Well, CEO Ford knows how to make a speech, BUT that speech is not going to sell cars!
The problem with Ford is deep…bad management, bad decisions and a worn out product line. And also, the inability to be flexible..but that I know is diufficult when you don’t have the money to do so. And then we are brought bac kto the original problems..bad management, bad decisions, etc etc. This is a company that has lost touch with the buying public. They are trying to be all things to all people, and pleasing none. And with that, this is what Ford SHOULD do:
1) Kill off the Mercury Brand. I can guarantee that whatever Mercury sells there is a Ford counterpart. Why maintain this brand that has become irrelevant? Ditch it. If they are really ballsy about the “no cow is sacred” thing, then ditch Mercury.
2) REALLY do some serious rework and innovation with Lincoln. I myself don’t think it is too late to get Lincoln back on track…. and I do NOT think the Lincoln MKS is going to be the one to do it. It is way too generic and BLAH looking to make a statement, let alone reflect Lincoln’s proud heritage. Go back to the drawing board and finds some designers that REALLY know how to interpret the face of “Lincoln”, not “Lincoln-looks like an Acura-looks like a Mazda, etc etc”. For instance, Cadillac…you either like their cars or you don’t, but they look like nothing else out there…..and that’s the key. They (Cadillac) have made and are making a turnaround… Lincoln could, if they had the RIGHT Management! (BTW, WHY are they killing off the Town Car??? The car is a virtula cash cow for Lincoln for many years…the tooling was paid off many many years ago. So, if it has to move to a new plant, then move it! Revamp and give the car a major overhaul and keep it!! Why give the markets that it serves to the upcoming stretch 300 from Chrysler?? Doesn’t make good business sense! The Town Car simply suffers from neglect….money that was sunk into other dead-in-the-water projects could have gone into Lincoln…..and speaking of Dead in the water…….
3) Sell Jaguar! The Jaguar has not made Dollar One for FOMOCO since it was purchased, period. And does Jaguar share technology with any of the other vehicles in the FOMOCO Family? I don’t think enough to warrant putting more money into a brand that simply won’t fly. You know the old saying about “good money after bad”? Well, here’s proof positive!
And with that, I’ll sit back an watch what happens. It is a shame to see Ford in this position, but they truly have no one to blame but themselves at this point.
However, being an ex-stockholder I’m not nerarly as worried as I once was……
3) Ditch Jaguar.
08/03, 10:14 PM
posted by:
Bimmer
IMHO it would be stupid to kill Lincoln Town Car. Here, in Toronto, that’s the only car that Airport Limos are using. And what makes it more interesting is taht they chouse Lincoln (prodused in the States) over Chrysler 300 (made in Brampton, just outside of Toronto). And, even when I’m trying to catch a cab I’d take Town Car over 300 at any time (or Cron Vic [same platform as Town Car] over cramped Impala).
And, please, tell me why did Ford kill Lincoln LS?! Even after all this years it looks better to me then CTS. Why Ford couldn’t just develop a newer version of LS? I’m 6′5″ and that car is just the right size for me.
And what’s up with “Five Hundred” having only 203 hp V6, when you could get Impala with a V8?
P.S. Like the look of Fusion.
08/03, 10:55 PM
posted by:
British_Rover
Manster you must have missed my post about Land Rover and jaguar sharing engines, trannys, and a host of other things. The new bad ass diesel V8 that is going in 2007 MY Range Rovers abroad and probably in 2008 Range Rovers in the US was codevelopled by Jag and Land Rover for use in both marques.