What If Ford (F) Can’t Sell Jaguar And Rover
August 7, 2007 by Douglas A. McIntyreThe Wall Street Journal writes that Ford (F) may have trouble selling Jaguar and Rover due to "uncertainty over how the European Union will apply new regulations on carbon-dioxide emissions." Because the two luxury car brands tend to burn more gas and release more pollutants than a small Toyota, the EU rules may hurt them more than other car companies.
Ford had hoped to get over $5 billion for the units, but press reports now say that it is unlikely that they will fetch north of $3 billion.
Ford would like to have the money to help its finance losses in North American and also potentially set up a fund with the UAW to cover health benefits. Ford would like the employee obligation off its books, but it may have to contribute over $20 billion to such a fund.
Ford does have another option, particularly with Jaguar, which has been rumored to lose as much as $1 billion a year. It could close the company and sunset the venerable brand.
Then emissions would not be a problem
Douglas A. McIntyre
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