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Fri, Aug 24, 2007 - Page 10 News List

Ford keeps details of Jaguar sale quiet

AP AND BLOOMBERG , DEARBORN, MICHIGAN

Ford Motor Co will not make an announcement about the sale of its Jaguar and Land Rover units until late this year or perhaps early next year, the head of the company's European operations said.

"It's a very orderly process," Lewis Booth, executive vice president of Ford's European units told reporters on Wednesday night, adding that Ford is in the middle of its strategic review of Volvo for potential sale.

Speaking to reporters in a round-table with the rest of Ford's top managers, Booth said he could not go into more detail about the possible sales.

Earlier this month, former Ford president and chief operating officer Nick Scheele joined with New York-based Ripplewood Holdings LLC in its bid for Jaguar and Land Rover.

Scheele served as Ford's president and chief operating officer from 2001 until his retirement in 2005. He also led Jaguar from 1992 to 1999.

Scheele's involvement pits him against Jacques Nasser, who was Ford's chief executive from 1999 to 2001. Nasser is leading a separate bid by One Equity Partners LLC, which manages private equity investments for JPMorgan Chase & Co, according to the person familiar with the negotiations.

Ford bought Jaguar in 1989 and Land Rover in 2000, joining them with Aston Martin and Volvo to form its Premier Automotive Group. But the automaker lost US$12.6 billion last year and said it expects to burn up US$15 billion to US$16 billion in cash before returning to profitability in 2009.

Earlier this month Ford said it completed the sale of its controlling stake in Aston Martin for US$931 million in cash and preferred stock. The company has taken opening bids for Jaguar and Land Rover and Ford president and CEO Alan Mulally said late last month that the probability of selling the brands is greater than 50 percent.

Mulally said he is "optimistic" the company can reach a new contract with the United Auto Workers union "on time" as the company tries to reduce costs and return to profit.

Both sides "know the seriousness" of the talks, Mulally said at a dinner last night with reporters at a company design center in Dearborn, Michigan.

Mulally reiterated the company will return to profit by 2009, a target the automaker set last year. Ford began negotiations last month with the union on a new agreement to replace a four-year contract that expires Sept. 14. Ford, General Motors Corp and Chrysler LLC estimate they spend US$25 to US$30 more in hourly labor costs than Toyota Motor Corp and other Asian and European automakers do at US plants.

Mulally is working to reduce Ford's dependence on pickup trucks and sport-utility vehicles, its main source of profit in the 1990s, and stem losses that reached a record US$12.6 billion last year.

The company faces a "headwind" from tightening credit because of subprime loans and other economic woes, Mulally, 62, said. Ford is affected by "all things that consumers continue to be worried about," he said.

Mulally is nearing his first anniversary as Ford's top executive. The carmaker recruited him from Boeing Co, where he was chief of the commercial-aircraft unit.

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