Announcement on sale of Jag and Cosworth
September 17, 2004
Richard Parry-Jones today announced officially that Ford and
its marque Jaguar will not continue in Formula One after the
Jaguar Cars today announced details of a comprehensive
business plan that will reshape the company and focus on the
factors that have had a negative impact on the bottom line
of the company.
The plan includes:
Product actions, including an all-aluminum XK sports car;
strengthening of the XJ range with a premium diesel engine
saloon in Europe and a new long wheelbase version in the US,
a new high-performance X-TYPE diesel in Europe and an X-TYPE
estate to be launched in the US.
Marketplace actions, including a review of Jaguar's retail
and market infrastructure throughout the world, and revenue
management steps that include a reduction in daily rental
units and revised series and model actions.
Cost actions, including the discontinuation of assembly
operations at Browns Lane; the transfer of 425 jobs to
Castle Bromwich, including generous terms for 400 voluntary
separations at Browns Lane; and a reduction of 750 staff and
agency positions. In addition, the Jaguar brand will
withdraw from Formula One at the end of 2004.
Coventry, Jaguar headquarters and the wood veneer
manufacturing centre will remain at Browns Lane and the
Jaguar Product Development Centre will remain at Whitley,
both in Coventry.
The company said these short- and longer-term actions focus
on Jaguar's immediate marketplace challenges and address the
fundamental structure of the business and its future
strategy. They will act as Jaguar's foundation for the
remainder of the decade.
Key elements of the plan:
· New all-aluminum XK sports car
Confirmation of a new XK sports car codenamed X150 that will
go on sale in early 2006. This will be an all-aluminum car
and will be the first production car to feature Jaguar's new
design language, developed by Design Director Ian Callum.
· XJ range significantly strengthened
The XJ range will be extended and strengthened by
introducing a premium diesel engine next year to respond to
growth in luxury diesel saloons in Europe and further
enhance the customer appeal of a car which is already
segment leader in the UK. The new long wheelbase version of
the XJ, which is targeted at the US market, has received
very strong reviews having just gone on sale.
· New high performance X-TYPE diesel
The market appeal of the X-TYPE compact luxury car will be
extended by adding a high performance diesel version to the
existing range of diesel and petrol-engined variants next
· X-TYPE Estate to be launched in the US
X-TYPE Estate (Station Wagon) will be launched in the United
States to broaden the X-TYPE range in this key market.
· Supply and demand balanced
We have announced a 15,000-unit reduction of production in
2004 to better align stock with on-going demand.
· Market strategy and distribution
We are reviewing our retail and market infrastructure in
markets around the world to improve both dealer and market
profitability. A new board-level position was recently
created to specifically drive this program with the
appointment of Mike Wright, former managing director of
Jaguar, to the new role. We will find the optimum solution
for each market for Jaguar, Land Rover and Premier
· Revenue management, Brand and marketing
We are implementing enhanced revenue management actions
including reduced mix of daily rental volumes and revised
series and model actions. Jaguar will refocus marketing
actions on the unique brand position of its vehicles as
beautiful fast cars.
Leaner cost structure:
· Consolidate premium aluminum vehicles in Castle Bromwich
Consolidate production of premium aluminum vehicles (the XJ
saloon range and the new X150 sports car) at Jaguar's Castle
Bromwich plant in Birmingham. This will result in a fully
integrated, efficient and technically advanced aluminum
vehicle production facility with panel stamping, body
assembly and final assembly on the same site.
· Cease final assembly operations at Browns Lane. Wood
veneer manufacturing retained on site
Cease vehicle final assembly at the Browns Lane plant in
September 2005, but manufacturing will be retained on the
site with the wood veneer manufacturing centre, which will
employ 310 people. This specialist facility uses a unique
combination of traditional skills and high technology to
produce the trademark wood veneers for Land Rover and Aston
Martin as well as Jaguar.
· Transfer 425 jobs to Castle Bromwich and with generous
terms for 400 voluntary separations at Browns Lane
425 jobs will be transferred for those employees that wish,
to Castle Bromwich plant for the final assembly of the XJ
saloon and new X150 sports car, which will be produced in
early 2006. The separation terms for the remaining 400
positions will be Jaguar's most generous ever for a
voluntary redundancy program. Jaguar will work closely with
Trades Unions, government and local development agencies to
oversee implementation of the Employee Support Program.
· A reduction of 750 staff positions. This is part of a 15%
salaried equivalent cost reduction since 2003
Further back office synergies with Land Rover will result in
a leaner Jaguar. There will be a voluntary redundancy
program for 500 salaried employees and a reduction of 250
agency positions. These reductions are an essential part of
a leaner organization and cost structure and a re-sizing of
the Jaguar business.
· Jaguar Headquarters and the Jaguar Daimler Heritage Trust
to remain at Browns Lane in Coventry
Jaguar has very strong ties with the City of Coventry. It
has been located in the city since 1928. As part of this
package of measures it was considered important that Jaguar
remains headquartered in Coventry at Browns Lane. Bibiana
Boerio, Managing Director of Jaguar, will be based there.
These facilities together with the JDHT and the wood veneer
manufacturing centre, take up a small part of the Browns
Lane site. The rest of the site will be sold for
· Whitley to be retained as Jaguar Product Development
Centre. Science and Business Park to be developed at Whitley
with Coventry Council to develop hi-tech hub for Coventry
Whitley will be retained as the Jaguar Product Development
Centre where all future Jaguars will be designed and
developed. Jaguar will press ahead with Coventry Council and
other local enterprise agencies to develop the science and
business park which has already been granted planning
permission. It is hoped that this will become a flagship
venue for Coventry's increasing focus on high technology
· The Jaguar brand to withdraw from Formula One at the end
As part of the package of measures to get the Jaguar
business back on track and focus management and financial
resources on the core business, Jaguar will withdraw from
Formula One at the end of this season. See end of release
for further detail and for Ford Motor Company Formula One
Joe Greenwell, Chairman and CEO Jaguar and Land Rover, "Our
new business plan was developed following a rigorous review
by the Jaguar management team. We examined a number of
alternatives and I would not be presenting this plan today
had I not been absolutely convinced that it is the right
plan and completely necessary.
"The plan is wide-ranging, extends over a number of years
and touches most aspects of the business. It also includes
some severe measures that we do not take lightly. But that
is a reflection of the highly competitive and global nature
of the business we are in.
"The fact is despite significant sales growth and excellent
levels of quality in recent years, we have not been able to
keep pace with significantly larger competitors. We have too
much capacity and this is our underlying structural problem.
Our bottom line has further deteriorated this year with the
weakness of the dollar, unprecedented incentives in the
premium market and the shift from premium cars to SUVs. We
had no choice but to take action and I firmly believe that
all the elements of this plan are essential if we are to
stem the losses."
Mr Greenwell also confirmed that, despite the difficult
business circumstances, it is the intention to do everything
possible to achieve this restructuring on a voluntary basis.
"It is with deep regret that we have had to announce some
actions today which affect people's jobs. However I can give
everyone my personal assurance that we will do everything we
can to support those affected."
Mr Greenwell summed up, "The package of actions we have
announced today will focus on the issues we currently face
and will help position Jaguar for a bright future founded on
strong product plans, a leaner cost structure and a stronger
focus on margins in the market place. I believe this plan is
essential to Jaguar's future and will enable us to
contribute more positively to Ford Motor Company's bottom
Mark Fields, Ford Motor Company, Executive Vice President "
Premier Automotive Group and Ford of Europe, said: "Decisive
action was needed to get Jaguar back on track and to ensure
a viable future. Despite the actions taken by the company's
management over the past few years and despite the fact
Jaguar is again the highest rated European brand on product
quality, Jaguar is back in a serious loss-making position.
There are a number of external factors which have
exacerbated the situation but we have faced and tackled the
fundamental reality, that Jaguar simply cannot support three
assembly plants with annual sales of 125,000 cars."
Fields, Ford's most senior executive based in Europe added,
"Manufacturing capacity although a significant factor is
only part of the issue and the solution. What we have
developed is a series of actions to strengthen Jaguar. These
also include a leaner organization structure on the cost
side of the equation and on the revenue and brand side, a
package of product and marketplace actions which will drive
the company forward in a way which is more appropriate for
the brand and will drive a better bottom line."
Mark Fields concluded: "There is massive global affection
for the Jaguar brand but frankly we were operating to a
business model that really offered little chance of
generating sustained profitability except in times of
favorable exchange rates. That had to change. The challenges
we faced were both strategic and tactical requiring
attention to all elements of the business. This plan has the
full backing and support of the Ford management team. Joe
and I will be working together with the Jaguar team to
implement the plan."
Jim Padilla, Chief Operating Officer, Ford Motor Company and
Chairman, Automotive Operations said, "Jaguar is one of the
most respected, valued and desired line of cars in the
world. The Ford Motor Company is committed to Jaguar and its
customers, and we will continue to support this incredible
brand and management team. The actions we are taking today,
while difficult, are absolutely necessary to set Jaguar back
on the right path and ensure a strong and sustainable
business for the future."
The Jaguar brand and Ford Motor Company withdraw from
Formula One at the end of 2004 and Ford puts its Formula One
businesses up for sale:
Joe Greenwell said, "Jaguar's presence in Formula One has
been a valuable marketing and brand awareness platform
particularly outside our main markets of the US and the UK.
However it was our collective view that it is time for
Jaguar Cars to focus 100% on our core business."
After a thorough review over many months Ford Motor Company
has decided it can no longer make a compelling business case
for any of its brands to compete in Formula One. Having
reached this decision our focus has turned to securing the
best future for our Formula One businesses and our employees
in these businesses going forward. We are therefore putting
our Formula One businesses up for sale. '
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