Hmmm, let’s see now, did anything interesting happen in the auto biz this week? Oh yes, a certain Indian conglomerate – at long last – put most of the world’s financial and auto media out of its misery by confirming that it was buying two certain iconic British luxury brands.
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When it finally came on Wednesday, the long-awaited announcement that Tata Group would buy Jaguar and Land Rover for $2.3bn was almost an anti-climax – a lot of detail had already slipped out one way or another and the key unknown had been the price.
Reaction here in the UK was pretty positive – the key Unite union seemed happy enough, Jag workers interviewed for lunchtime TV news bulletins said they were glad of another “five years’ security”, as one put it to a BBC reporter, and Tata Group chairman Ratan Tata is already well regarded in the British financial pages for his hands-off approach to that other local brand he acquired a while ago – the equally iconic Tetley Tea.
Various sources ‘with knowledge of the deal’ have since told just-auto that the negotiations were longer and much more detailed than you might think and involved multiple agreements for supply – detailed down to an engine-by-engine basis even – that stretch out beyond the current to-2010/11 business plan for the two brands.
It appears that Ford will still be supplying Tata with components and access to technology long after the ink’s dry on the Indian group’s cheque – almost to the end of the 2010s we have heard. I’d like to have been a fly on the wall listening to the accountants and lawyers sort all that out…
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By GlobalDataNow, as Ford prepares to bank that large cheque some time in the second quarter, the hard work really begins for the Tata management who wrote it, as they start signing off new product plans and, of course, deciding where and how to build what – as future-product specialist Julian Rendell detailed for us yesterday and today – looks like an exciting portfolio of new vehicles we look forward to seeing enter production in the years ahead.
Some Brits might grumble about an entrepreneur based in a former colony once referred to as ‘the jewel of the Empire’ snapping up two of the former ‘mother country’s best-known brands but it’d be churlish not to wish Tata the, er, “best of British” as it takes them both forward into a new era. We’ll be watching with interest.
While Tata/Ford was the highlight of this short post-Easter working week, this item attracted my attention and that of many of our readers: a senior BMW purchasing executive saying that cars can now be built in the US 30% cheaper than here in Europe.
BorgWarner concurs, with a senior executive adding that Detroit is a particularly attractive location because of the availability of well-trained engineers.
When we say the auto biz is a cyclical biz, we’re not kidding.
Enjoy your weekend,
Graeme Roberts
Deputy Editor
just-auto.com
