PAG-Jag will make money, but at the cost of the Browns Lane factory?
Newswheel staff :: 30 November 2005 :: Filed under Aston Martin, Jaguar, Land Rover, Volvo, Europe & UK, US
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Heard it all before?
Ford’s Premier Automotive Group (PAG), which includes Jaguar, Aston Martin, Volvo and Land Rover, is a money pit. It lost a hilarious $740 million in 2004, and has dumped another $146 million so far in 2005. But the company’s CEO, good old Bill Ford, has sworn that PAG will make money in 2006.
Big Bill has conceded that next year will be remain tough for Ford’s domestic US business. However, in an interview with trade rag Automotive news he’s brave enough to lay it on the line. “The rest of the Ford automotive world I expect to be profitable throughout next year," he said. And by implication, that means PAG will stop hemorrhaging cash.
Of course, Ford has talked tough regarding PAG (and Jaguar) before. So, it would be easy to laugh off this latest statement as mere platitudes aimed at brokers and analysts. Were it not for Ford’s disarming honesty regarding Jaguar. "We still have not figured out how to make the business equation yet for Jaguar a compelling one. It’s better than it was. But the infrastructure was put into Jag for growth aspirations that, in retrospect, were just out of line."
The original plan was for 200,000 Jags. It’s now likely that the company will produce less than 100,000 units in 2005. It’s not surprising, therefore, that a recent Wall Street Journal report suggested that Jag’s Browns Lane facility, located near Coventry and home of the big cat since 1928, could be for the chop. “The possible sale of Browns Lane is one of several options that is currently being studied,” Jaguar spokesman Don Hume has said. Jaguar cut 1,150 jobs in the UK in 2004 and has already significantly scaled back production at Browns Lane.
Posted 10 May 2007, by Devyn