Tata Motors may ink Land Rover, Jaguar deal next weekFebruary 29th, 2008 - 12:27 am ICT by admin
By Parveen Chopra
New York, Feb 28 (IANS) India’s Tata Motors was expected to acquire Jaguar and Land Rover from Ford Motors as soon as next week, but the US automaker would continue to supply engines and other key components for the marquee brands, The Wall Street Journal newspaper reported. Ford is expected to apprise investors on the progress of the negotiations with Tata Motors when it files its annual 10-K report with the Securities and Exchange Commission of the US this week.
Workers’ union leaders who had job-security concerns as negotiations progressed have reportedly had constructive meetings with Tata officials last week in Britain.
“Nobody foresees any major problems now; everything is pretty much done,” said Roger Maddison, a national officer for the British union Unite, which represents about 16,000 workers at Jaguar and Land Rover.
He said a memorandum of understanding between Tata and Ford could be signed as soon as March 5 or 6, according to the newspaper.
Ford plans to sell its entire stake in the brands for about $2 billion. But Tata Motors signalled to British labour leaders last week that under the deal, it intends to continue using engines and other parts currently built in Ford-owned plants in Britain, the Journal said Wednesday.
Tata Motors, which last month unveiled the world’s cheapest car Nano with a price tag of $2,500, will gain technological know-how and luxury car expertise by purchasing Jaguar and Land Rover. But it cannot afford to stumble over technical issues, making relationships with Ford and existing suppliers important, the business daily said.
“Ford and Tata will, in effect, be industrial partners for some years to come,” John Casesa, a former Wall Street analyst turned adviser to auto companies, told the daily.
“Even if Tata wants to shop the world for new technology, it will take years for any new supplier to be ready to provide what may be needed,” he said.
Ford acquired Jaguar for $2.5 billion in 1989 and Land Rover for $2.75 billion in 2000.
The automaker is unloading the brands as part of a strategy to focus on the company’s core Ford brand. The sale to Tata Motors will also give Ford more liquidity as it tries to restructure amid over $15 billion in losses over the past two years.
Ford had announced early last month that it had picked Tata Motors as the preferred bidder for its British units.
Tata was one of three bidders left in the race, the other two being fellow Indian carmaker Mahindra and Mahindra and buyout specialists One Equity, which is headed by former Ford chief executive Jacque Nasser.
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