Newspaper: Ford to inject $935M into Jaguar

SAN FRANCISCO March 27, 2005; Marketwatch.com reported that Ford Motor Co. is preparing to inject 500 million pounds ($935 million) into Jaguar, the loss-making luxury car maker it acquired in 1989, the Sunday Times of London reported.

Jaguar, maker of the XK, XJ, S-Type and X-Type, lost 601 million pounds ($1.1 billion) in 2003 amid spending on product development, worse-than-expected sales and a plunge in the U.S. dollar versus the British pound. That loss included a 533 million pound write-down in the value of its assets, the newspaper reported.

The carmaker's losses for 2004 may well have run into hundreds of millions of pounds again, however figures aren't yet available, the paper added.

The amount of extra capital to be injected by Ford is likely to match exactly the size of the 2003 assets charge, the Sunday Times of London said, citing an unidentified "senior Jaguar source." The timing and method of the re-capitalization hasn't been decided yet, the source told the newspaper.

Jaguar doesn't manufacture cars in the U.S., so changes in the exchange rate between U.S. dollars and British pounds have a big influence on its performance. As the dollar has lost value versus the pound in recent years, that's made Jaguar cars more expensive in the U.S., compared with vehicles produced in America.

Because of this, Ford has considered shifting Jaguar manufacturing to the U.S., a move it last contemplated a decade ago, the paper explained.

Mark Fields, vice-president of Ford's Premier Automotive Group, which includes Jaguar, Volvo and Aston Martin, denied any plans to make Jaguars in the U.S., the newspaper added.