Jaguar Goes Tata - Sold, But At What Price?

Racing Jaguar, Monterey Festival of Speed, 2006

There's been a, slew of stories on the impending - and long-mooted - sale of Jaguar and Land Rover to India's Tata group over the past week, indicating perhaps that a final resolution is near. As we've mentioned before, this is the latest in the line of disposals by Ford of it's old Premier Auto Group business, assembled back in the days when the company was flush with cash and keen to splash. Alas, buyer's remorse set in very quickly once they found out just how much money it would take to revive Aston Martin, Jaguar, Land Rover and whatever else got thrown into that bucket, and to overcome decades of mis-management by, in the case of Jaguar and Land Rover, that old bogeyman British Leyland. Remind me to do a post one day on some of the wonderous cars those guys managed to produce .... Allegro, Metro or Maxi anyone?

Anyway, new management, new era, new plan: sell the lot just as they turn from cash sinks into cash cows ... maybe. One of the last peices on the block is a job lot of Jaguar and Land Rover (motto, "buy one, get one free"), and after hitting every conceivable buyer in town India's Tata conglomerate is the only one left standing. Despite some reports that the price would be around $2.6 b, pundits are now saying that it won't reach anything like that figure, struggling to deliver $2 b back into Ford's fast-draining coffers (they posted a $2.8 b loss in the 4th quarter alone).

It's tough to have an auction with only one bidder, and it's hard to build value when in the last couple of sales - Aston, anyone? - Ford has accepted what is quite frankly bargain-basement pricing. But Ford has only itself to blame, especially in the case of Jaguar. A string of lack-lustre models tied to unrealistic sales targets took the brand from premium-to-proletariat in a few short years.

Buy high, sell low, and kiss goodbye to countless billions, leaving Ford as a cash-poor producer of volume sheet metal. Now there's a strategy for Harvard Business Review to pick apart.

Ford's Disease: Octophenia

I still think that Quadrophenia was one of the Who's best works, and indeed one of the greatest rock albums of all times. It has a coherency and level of energy not seen in any of their other concept works,and marked a pivotal point in the band's career. It also marked a key time in the development of post-war Britain, mods and rockers battled it out on the seafronts of England's south and east coasts marking the struggle between the old-guard still looking backwards to WWII and the younger generation desparate for change, and for a future.

It tells the story of Jimmy, a youg 60s mod who is so internally conflicted that he doesn't just have schizophrenia, he has quadrophenia.

Imagine then the state of Ford as they too try and deal with the multiple personalites - read "badges" - that inhabit Dearborn these days. Here's my summary of their current state-of-affairs:


Ford: bog-standard badging, mass market boxes, and cars that are about as far from aspirational as you can get. Mustang was a nice try but honestly, a live axle in the 21st century? And never, ever, let Marketing tack on a plastic spoiler at the back, OK?

Lincoln: appealing only to a core demographic so old that oxygen cylinders and colostomy-bag holders are on the options list.

Mercury: a complete joke. Pick any standard Ford model, throw on it a different grill, a bit more chrome and add $4,000 to the price. Crass commercialism meets brain-dead buyer.

Mazda: the good news is that they only own a bit of it. The bad news is that they own any of it at all. Marketing department staffed by infantiles who live in a city tower-block somewhere and ride bicycles.

Volvo: an entire line-up targeted at the affluent-end of the surburban soccer-mon brigade. Fine, but hardly a viable long-term business. Some day real soon Ford will stick their own deeply-suspect styling cues into the mix, cut costs and quality and you can wave Volvo good bye, if you haven't already done so.

Land Rover: a money pit that drank cash to get it up to even a basic level of reliability, and a brand that Ford still doesn't know how to sell properly, despite the vehicles finally starting to, well, start for one thing. The quality is now there, but the marketing and sales is MIA.

Jaguar: a case study in how to devalue a brand that you bought to add class to the company line-up, but then allow managers in Europe to sign-off lineups including hideously underpowered estate cars and low-end vehicles a plenty. Go figure.

Aston Martin: finally, something Ford did right. Preserve and enhace the marque; use it as the flagship engineering brand, showcasing what Ford can do when it's allowed to; re-build all the sex/power/majesty of the earlier cars and, finally, turn a profit, something unheard of in the entire history of the company. Nice one.

So then, you might ask, as Ford tries to stop the headlong slide over the cliff into bankruptcy, what's their first step on the road to a cure? They sell Aston Martin of course, the only thing they have of value, for less than a billion bucks and smiling all the while. Well that should keep the lights on at Mercury for another couple of months so all right with the world then.

When quadrophenia finally got too much for Jimmy, and in a final moment of clarity and insight, he realised that he'd never be the best at anything. Mediocrity and a future that would lead him nowehere except into misery and pain, he rode his GS scooter off the cliffs above Brighton to his death. Finally, one thing he could do right and do it to completion. Now he'd be remembered, recognised even, and it was some kind of revenge on those who couldn't "see the real me".

To cure it's ills, it's octophenia if you will, Ford carves out the only one of it's personalities that is interesting, worthwhile or valuable. Welcome to heptophenia, Ford. All the same pain as before, but now without the passion, hope and desire. The cliff's that way ->