Ford may pick Tata Motors for JLR: reports

Ford Motor is likely to name Tata Motors as the preferred bidder for its Jaguar and Land Rover brands (JLR) on Dec. 21, according to international media reports. Tata Motors is expected to quote about £1bn (US$2bn) for the marquee luxury brands, the reports said. However, Ford may keep some interest in JLR under pressure from the British unions. Ford, which is spinning off the British luxury brands to focus on restructuring its loss-making North American operations, said last week it aimed to complete the sale in early 2008. Tata Motors is competing with Mahindra & Mahindra (M&M) and private equity firm One Equity Partners.

UK trade unions have already expressed their desire to back the Tatas. Officials from the British factories making the iconic brands believe that the family-owned Indian auto manufacturer would offer more long-term security than private equity firm One Equity. JLR together employ 15,000 people in the UK. The headcount of the two brands increases to 40,000 if employment throughout the supply and support chains is taken into account. However, union leaders have voiced some concern about Tata Motors' market positioning as a manufacturer of mass market brands. They fear that JLR brands will not fit well with Tata Motors' image. Unions also feel that Tata Motors may source components or manufacturing from India, leading to loss of British jobs.