Ford Motor Co., trying to focus its recovery on North America, is seeking buyers for its Volvo, Jaguar and Land Rover brands in Europe, two people familiar with the strategy said.
Ford, which lost $12.6 billion last year, has hired Goldman Sachs Group Inc. and Morgan Stanley to arrange the sale, one of the persons said. The plan is known internally as “Project Swift,” a reference to the speed at which Ford wants to make a sale, said the people, who didn’t want to be identified because the talks are confidential.
Selling the brands would end a 20-year initiative to expand sales of luxury autos by acquiring European companies. Since 1998, before Dearborn, Michigan-based Ford bought Land Rover and Volvo, the company’s own Lincoln unit has plunged from No. 1 in U.S. luxury sales to seventh.
“This company desperately needs focus in terms of preserving its capital and concentrating its management resources,” said John Casesa, managing partner of Casesa Strategic Advisors LLC in New York. “It currently has too many mouths to feed.” The automaker’s North American automotive operations were the primary source of last year’s record loss. The unit has been hurt by declining sales of pickup trucks and sport-utility vehicles, the company’s main source of profit.
Among the European luxury brands, Volvo has been profitable and Land Rover turned profitable under Ford’s ownership. Jaguar has had unspecified losses.
The brands make up the Premier Automotive Group, whose losses widened to $2.32 billion last year. The figures, in a Feb. 28 U.S.
regulatory filing, include costs considered one-time expenses, such as job cuts.
Ford spokesman John Gardiner said the company would neither confirm nor deny speculation about a sale.
First Domino Ford hinted that the brands might be sold when it announced its plans to find a buyer for U.K.-based Aston Martin last August. Since then, in response to questions, executives have said Ford continues to evaluate its portfolio and has no current plans to sell any of the other European brands.
Automotive News, citing unnamed sources, reported today that Ford is seeking buyers for Volvo, Jaguar and Land Rover.
Ford bought Jaguar in 1989 for $2.5 billion. A decade later, the automaker purchased Sweden’s Volvo for $6.45 billion. Ford agreed in 2000 to pay $2.73 billion to Munich-based Bayerische Motoren Werke AG for Land Rover.
Ford agreed in March to sell Aston to a group of investors led by U.K. auto-racing champion David Richards for $848 million. The company bought a controlling stake in Aston Martin in 1987 and the remainder of the luxury sports-car maker in 1994.
Aston is also part of the Premier group.
