Ford: downsizing Jaguar, selling racing division (Cosworth)

[ARCHIVED THREAD] - Ford: downsizing Jaguar, selling racing division (Cosworth)

Posted: 9/17/2004 9:10:40 AM EDT

Details of Ford's announcement Richard Parry-Jones today announced officially that Ford and its marque Jaguar will not continue in Formula One after the 2004 season.

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-aluminium 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:

Product:

· New all-aluminium 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-aluminium 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 year.

· 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.

Market place:

· 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 programme 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 Automotive Group.

· 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 aluminium vehicles in Castle Bromwich

Consolidate production of premium aluminium 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 aluminium 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 programme. Jaguar will work closely with Trades Unions, government and local development agencies to oversee implementation of the Employee Support Programme.

· 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 programme for 500 salaried employees and a reduction of 250 agency positions. These reductions are an essential part of a leaner organisation and cost structure and a re-sizing of the Jaguar business.

Other actions:

· 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
re-development.

· 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 industries.

· The Jaguar brand to withdraw from Formula One at the end of 2004

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 business plans.

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 line."

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 organisation 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 favourable 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

Current rumor has Audi buying up Cosworth.

Posted: 9/17/2004 9:44:51 AM EDT

[#1]

Wow, that would be great for audi.... always loved the cosworth line, and their WRCs
performance in general!

Posted: 9/17/2004 9:51:58 AM EDT

[#2]

Quoted:
Current rumor has Audi buying up Cosworth.

Excellent!

Remember the Alamo, and God Bless Texas...

Posted: 9/17/2004 9:54:40 AM EDT

[#3]

This is actually great news for F1 racing...With Jaguar leaving, and the potential failure of Jordan and Minardi with their Cosworth engine deals, that would force the top teams to all provide 3 cars. That means a better quality field and better racing...

Posted: 9/17/2004 9:58:35 AM EDT

[#4]

Or unless Audi is interesting into F1 racing? That would be good.

Posted: 9/17/2004 10:08:40 AM EDT

[#5]

Yea I can believe how bad the Jag F-1 team has been from the start, the cars never really had a chance, I never understood wht they were so bad.

Posted: 9/17/2004 10:15:23 AM EDT

[#6]

Don't know if it is the design or pilot error, but on their last race in Monza Italy, I think both or one of their car spin out of control and lost for the race.

Posted: 9/17/2004 10:18:09 AM EDT

[#7]

Jackie Stewart must be laughing all the way to the bank. Ford bought the team from him, and continued to pour money down the drain. They were noncompetetive, frequently running behind Minardi, Sauber, and Jordan.

Posted: 9/17/2004 10:33:31 AM EDT

[#8]

Quoted:
Or unless Audi is interesting into F1 racing? That would be good.

I doubt it...they really have never taken on a series heads up against other manufacturers. Their recent success at Le Mans has more to do with the field, or lack of a quality field, than anything else (although their car is a great design). If Audi gets into F1, they will get taken to school.

Posted: 9/17/2004 10:35:22 AM EDT

[#9]

Quoted:
Yea I can believe how bad the Jag F-1 team has been from the start, the cars never really had a chance, I never understood wht they were so bad.

Hiring Eddie Irvine didn't help. But yes, it is strange they were so bad...considering that Stewart did very well with their small budget.

Posted: 9/17/2004 10:36:17 AM EDT

[#10]

This has been in speculation for a long time. F-1 losing yet another team...

Posted: 9/17/2004 10:43:55 AM EDT

[#11]

Quoted:
Quoted:
Or unless Audi is interesting into F1 racing? That would be good.

I doubt it...they really have never taken on a series heads up against other manufacturers. Their recent success at Le Mans has more to do with the field, or lack of a quality field, than anything else (although their car is a great design). If Audi gets into F1, they will get taken to school.

It has been rumored for several years that VW would be entering F1.

Posted: 9/17/2004 10:52:14 AM EDT

[#12]

Quoted:
Jackie Stewart must be laughing all the way to the bank. Ford bought the team from him, and continued to pour money down the drain. They were noncompetetive, frequently running behind Minardi, Sauber, and Jordan.

no one runs behind Minardi. I don't even know why they continue to race.

Posted: 9/17/2004 11:00:41 AM EDT

[#13]

Quoted:
no one runs behind Minardi. I don't even know why they continue to race.

They pride themselves in being a privateer team that brings a lot of new/young talent in to the F1 Paddock.

Posted: 9/17/2004 11:02:49 AM EDT

[#14]

Quoted:
Quoted:
Jackie Stewart must be laughing all the way to the bank. Ford bought the team from him, and continued to pour money down the drain. They were noncompetetive, frequently running behind Minardi, Sauber, and Jordan.

no one runs behind Minardi. I don't even know why they continue to race.

true True...But anymore why do any of them bother. It's scandalous if Ferrari does not take the front row and 2 top podium spots. Ferrari is just laying waste to the competition. To the point it's no longer very fun to watch...you already know what the outcome will be.

Posted: 9/17/2004 7:30:32 PM EDT

[#15]

Quoted:
Quoted:
Jackie Stewart must be laughing all the way to the bank. Ford bought the team from him, and continued to pour money down the drain. They were noncompetetive, frequently running behind Minardi, Sauber, and Jordan.

no one runs behind Minardi. I don't even know why they continue to race.

They scored a Constructors point this year!

With it a Drivers Championship point too!

Posted: 9/18/2004 6:48:20 AM EDT

[#16]

Quoted:
Quoted:
Quoted:
Jackie Stewart must be laughing all the way to the bank. Ford bought the team from him, and continued to pour money down the drain. They were noncompetetive, frequently running behind Minardi, Sauber, and Jordan.

no one runs behind Minardi. I don't even know why they continue to race.

They scored a Constructors point this year!

With it a Drivers Championship point too!

That was due to many retirements, mostly crashes. lol
But you gotta give them credit for finishing the race.

Posted: 9/18/2004 7:28:35 AM EDT

[#17]

Quoted:
Quoted:
Quoted:
Quoted:
Jackie Stewart must be laughing all the way to the bank. Ford bought the team from him, and continued to pour money down the drain. They were noncompetetive, frequently running behind Minardi, Sauber, and Jordan.

no one runs behind Minardi. I don't even know why they continue to race.

They scored a Constructors point this year!

With it a Drivers Championship point too!

That was due to many retirements, mostly crashes. lol
But you gotta give them credit for finishing the race.

Exactly, how many races has Sato blowed up in? How many has Kimi fallen out of? A lot!

Minardi has been in F-1 for nearly 20 years, plucky little buggers they are!

In 2003 at the Italian Grand Prix 8 of the 20 drivers racing (that's 40%!) were either current, or former, Minardi drivers.

Posted: 9/18/2004 8:25:07 AM EDT

[#18]

Quoted:
Quoted:
Or unless Audi is interesting into F1 racing? That would be good.

I doubt it...they really have never taken on a series heads up against other manufacturers. Their recent success at Le Mans has more to do with the field, or lack of a quality field, than anything else (although their car is a great design). If Audi gets into F1, they will get taken to school.

That statement is a joke.

Audi has beaten the best in the world- and as a result has been BANNED from most forms of racing. The Speed World Challenge races are the only series left in the world where they are allowed to run Quattro.

Audi is the reason AWD is banned from all international forms of motorsport except the WRC.

And even in the ALMS, Audi drove BMW, Ford, Chrysler, and General Motors out of the series, since none of them were willing to spend the money needed to develop a car of the same level.

But this is also the reason why Audi would not be very interested in going to F1. The cars- especially under the proposed rules for 2005 are just too limited. There is nothing to be learned from such restriced vheicles that could better Audi street cars or show off Audi technology.

Posted: 9/18/2004 8:34:21 AM EDT

[#19]

Recall that in the early-tomid-1980s, Audi was involved in IMSA racing. They competed in the GTO class with AWD versions of the 5000/100 Quattro. Their incredible performance led to a handicapping system under which winners would be rewarded the following race with a weight peanalty of, IIRC, 50kg - over 100 lb! I think that at one time, the Audis had a 250-kg penalty and were still unbeatable. The level of technology and fundamental understanding of the dynamics of the race car were far and away beyond what the competition could offer. Eventually, AWD was banned outright.

I'm not so sure that Audi could not benefit from F1. Look at the front end that BAR is running now, and how similar the concept is to a Quattro front differential.

Posted: 9/18/2004 8:35:11 AM EDT

[#20]

BMW left ALMS because they couldn't compete without putting a V8 in an M3. Next gen M3 (E90) will have a V8 based on the E60 M5 V10, and ought to have the power to compete with Porsche.

As soon as Schumacher gets tired of racing, Ferrari will drop a notch. Their top engineers are there because of him, either because they are his friends or because they do it so they can watch him win. They will retire with him. Barrichello is a top driver too, but the series will be more even then, esp. with upcoming changes in the rules.

Posted: 9/18/2004 8:45:31 AM EDT

[#21]

Quoted:
BMW left ALMS because they couldn't compete without putting a V8 in an M3. Next gen M3 (E90) will have a V8 based on the E60 M5 V10, and ought to have the power to compete with Porsche.

As soon as Schumacher gets tired of racing, Ferrari will drop a notch. Their top engineers are there because of him, either because they are his friends or because they do it so they can watch him win. They will retire with him. Barrichello is a top driver too, but the series will be more even then, esp. with upcoming changes in the rules.

BMW used to have a V12 prototype as well that raced in the first two years of the ALMS. The ORIGINAL R8R Coupe of 1998 had a lot of trouble keeping up with it- although the coupe R8R had lots of problems from being originally a AWD car and then at the last minute were BANNED and had to be converted to RWD only.
In 99 the R8Rs were massively rebult into Spyders and gave the BMW a massively hard time. The apperance of the current R8R in 2000 gave the BMW no hope.

Ferrari also refused to bring the Enzo or build a replacement for the 333P because they would need to spend as much on it as on their Formula One team to be competative against the Audi. Porsche cancelled plans to bring their V10 Spyder to LeMans after the R8R appeared

Posted: 9/18/2004 8:47:01 AM EDT

[#22]

Wasnt it ALMS that Maseratis version of the Enzo is to compete in?

Posted: 9/18/2004 8:54:58 AM EDT

[#23]

Quoted:
Wasnt it ALMS that Maseratis version of the Enzo is to compete in?

Supposedly, and they have largely stopped development of the 550/575 Maranellos becuase of it, giving Corvette a walk this year. But their appearance date gets pushed back and back...

Posted: 9/18/2004 9:01:36 AM EDT

[#24]

ProDrive will be racing Maranellos. They are the WRX guys, I guess. I don't follow rally very closely.

Posted: 9/18/2004 9:03:49 AM EDT

[#25]

The Prodrive Maranellos are campaigned by the owner of Prodrive without the help of Ferrari, but they havent attended all of the races this year for some reason.

Posted: 9/18/2004 9:05:35 AM EDT

[#26]

Quoted:
The Prodrive Maranellos are campaigned by the owner of Prodrive without the help of Ferrari, but they havent attended all of the races this year for some reason.

Why race the Maranello, can't a 360 CS kick its ass?

Posted: 9/18/2004 11:38:03 AM EDT

[#27]

The ProDrive Maranellos are purpose-built race cars from England. Other than the engine and transaxle, they bear only superficial resemblance to the road car. These are not Ferrari homologation specials in the vein of the 288 GTO or other types.

[ARCHIVED THREAD] - Ford: downsizing Jaguar, selling racing division (Cosworth)

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