GERMANY: Ford injects GBP1.2bn into struggling Jaguar
Ford has injected another GBP1.2bn (US$2.1bn) into Jaguar Cars to cover heavy losses and investment writedowns at its British luxury car subsidiary, the company told Reuters on Friday.
The news agency noted that the move marks the second time within two years that Ford has had to recapitalise Jaguar, which has battled weak sales.
"The 1.2 billion pounds is correct as a recapitalisation," Jaguar spokesman Don Hume told Reuters, confirming press reports.
"It takes the form of preference shares issued to Ford Motor Co. If nothing else it underlines, despite recent rumours, Ford's ongoing commitment to Jaguar," he added, but would not comment to Reuters on whether more such operations might be needed.
According to Reuters, Jaguar's unconsolidated British operations made a pretax loss of GBP430m pounds in 2004 including an asset impairment charge of GBP173m. That narrowed its 2003 loss of GBP601.1m including an impairment charge of GBP534million.
The news agency added that Ford does not break out separate profit statements for Jaguar, which in September declined to repeat its earlier forecast that it would break even by 2007.
It said the move by Ford to prop up Jaguar is no surprise given the expensive restructuring the brand is working through, but it poses another headache for Ford managers grappling with problems on the home front.
Ford's Premier Auto Group, of which Jaguar is part, had a third-quarter 2005 pretax loss of US$108m and PAG and Ford of Europe head Lewis Booth told Reuters this month that Jaguar was not for sale despite market talk of this.
Reuters said that Jaguar pulled out of the US daily rental business this year as it adjusted production volume to meet demand.
Its sales in the key US market fell 15.5% in the first 11 months of this year to 42,458 units, while new car registrations of Jaguars in Europe contracted 23.1% to 43,045 cars, the news agency added.