Ford Selling PAG: Where There’s Smoke, There's Fire
June 11, 2007
Rumors are running rampant, based on various news reports out of Europe this morning, that Ford is selling its Premier Automotive Group (PAG) or parts of it.
CityAM newspaper in Europe reported today that Jon Moulton, the venture capitalist who tried and failed to buy MG Rover, is preparing a $6-billion bid for Land Rover and Jaguar. Moulton, a partner in Alchemy Partners LLP, denied those reports in a telephone interview with Bloomberg News today.
Meantime, trade journal Automotive News Europe reports today that Ford has been actively seeking buyers for its European luxury brands after negotiations for Italy’s Fiat to buy Land Rover and Jaguar broke off late last month.
Last week, the rumors had BMW considering the purchase of Volvo.
Where there's this kind of smoke, there's bound to be fire.
An Inevitable Sale?
Various media reports say ailing Ford, which lost a record $12.6 billion last year, has hired Morgan Stanley and Goldman Sachs Group Inc. to sell PAG, which includes Jaguar, Land Rover and Volvo cars.
Ford officials will only say the company “is continuing to assess a number of strategic options for all of its operations. We're not specifying what they are and what we're evaluating."
PAG lost $327 million before taxes in 2006, the third consecutive annual loss. Ford has said PAG may be back in the black in 2007. It had a profit of $402 million in the first quarter this year. While Ford doesn’t reveal profits by brand, it is estimated that Jaguar has lost $500 million to $1 billion since 2001 and is likely to lose money this year and next. PAG’s financial improvement in this year’s first quarter came on the strength of Land Rover.
Possible Suitors
In addition to the bidders du jour, speculation has it that U.K. auto racing champion David Richards is a possible buyer. In March, Ford sold most of Aston Martin for $956 million to Richards, the former Benetton and British American Racing chief, and a Kuwaiti holding company.
Another name mentioned is David James, who acquired the rights to make Smart cars from DaimlerChrysler AG.
Carlos Ghosn, chief executive officer of Renault and Nissan Motor Co. Ltd., is believed to be interested in bidding through Renault, although in a recent interview with Le Parisien, he said buying another car brand "would not bring any immediate benefit to Renault or its alliance with Nissan.''
An Emotional Interest
Jon Moulton’s comment to Bloomberg was intriguing. "It's not on our deal list,'' Moulton told Bloomberg. "There have been no discussions. I'm interested only at an emotional level.''
In 2000, Moulton lost out in the bidding for British carmaker MG Rover after unions opposed his plan to cut jobs. Rover's then-owner BMW sold the business to a group of investors led by John Tower who planned to turn the company into a mass-market carmaker. Five years later, Rover filed for insolvency.
Fiat-Ford Talks End
Automotive News Europe reports the Ford-Fiat talks involve Ford of Europe boss and PAG chief Lewis Booth with Fiat group CEO Sergio Marchionne. The sources say Fiat halted discussions with Ford because of concern over the potential adverse effect of the acquisition on the Italian carmaker's credit rating.
Fiat was interested largely in Land Rover, which would provide Fiat with instant growing global SUVs. Jaguar was of interest because of its rear-drive platform and V6 and V8 engines. In addition, both would provide Fiat with an instant foothold in the U.S. Fiat has been on-and-off about relaunching its Alfa Romeo brand in the U.S., which was supposed to occur in 2009.
Posted by Michelle Krebs at 8:10 AM under Ford , Rumors | Comments (1) | digg this | Seed Newsvine
“NAUGAHYDE” TO EXPAND ITS AUTOMOTIVE BUSINESS
UNIROYAL ENGINEERED PRODUCTS, LLC (UEP), manufacturer of “Naugahyde” coated fabrics, the most recognized name in decorative coated fabrics, is making a major commitment to the automotive industry with a strong combination of products, key personnel additions and expanded manufacturing capability.
Over the last several years, North America has lost approximately 40% of its vinyl capacity and industry consolidation has reduced the number of automotive suppliers. Additionally, major mergers and sell-offs have taken place within the foam and vinyl industries. These transactions are primarily being driven by non-automotive investors strategically bent on returns through gaining pricing power in selling the automotive suppliers and OEM’s. UEP believes that now is an attractive time to commit additional resources to the automotive market because of this consolidation.
According to UEP General Manager, Larry Bressler, “Uniroyal has a long automotive history, and is in fact one of the founding pioneers in supplying coated vinyl fabrics to the industry. Naugahyde has demonstrated high quality performance in the automotive arena for many years with successful testing, approval and usage at several major auto makers. Our Naugahyde fabrics remain unmatched in terms of quality. With our expansion, UEP is able to offer the industry a real viable alternative in a tightening market.” He went on to say “The additional investment we are making to serve the automotive industry is substantial and will be seen as good news for an industry that could use something to cheer about. We are committed to this industry for the long-term.”
UEP is expanding its manufacturing capacity at its Stoughton, Wisconsin facility to accommodate substantial automotive business. UEP will also benefit from the many strong and experienced personnel that have been added to support the increased automotive effort. Recent additions include Ramadas Acharya as Vice President of R&D. Ramadas has over 25 years of experience with the OEM, Tier 1 and Tier 2 suppliers in the pursuit of high performance products. UEP has also hired a new Technical Director, Jeffrey Hinchman. Jeff has worked in product development for over 27 years with the majority of his career focused on interior products for the automotive industry. In addition, Dave Urbin joins the UEP sales team bringing over 15 years of automotive program management experience to his dealings with OEM’s, as well as Tier 1 and Tier 2 suppliers.
For information on Naugahyde products contact:
Uniroyal Engineered Products LLC Naugahyde National Sales Office
Larry Bressler, General Manager 1001 North Main Street, Suite #6 Nappanee, Indiana 46550-1038 USA
http://www.nauga.com
Posted by: Maria Teresa Garcia | June 11, 2007 at 10:53 AM