Ford's European luxury strategy looks grim

Sept. 20, 2004 at 11:17 AM
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DETROIT, Sept. 20 (UPI) -- Ford Motor's bid to become a big player in Europe's luxury car market has started to disappoint stock analysts, who have become vocal in their criticisms.

Ford owns three luxury British car brands -- Aston Martin, Land Rover and Jaguar -- plus Sweden's Volvo, the last only really successful venture, the Wall Street Journal reported Monday.

Jaguar's U.S. sales, meanwhile, are down 11.5 percent through August compared with the first eight months of 2003. And, despite cost cutting efforts, there's little near-term prospect of a change.

Instead, Jaguar is facing near-term labor troubles: Union officials are preparing to express worker anger at Ford's decision to switch production from the Browns Lane plant in Coventry to the nearby Castle Bromwich factory, with a resulting loss of more than 1,100 jobs.

"Jaguar has a long road back to health," said Merrill Lynch auto analyst John Casesa.

In the second quarter, Ford's luxury European brands racked up pre-tax losses of $362 million, even as revenues rose. Jaguar, Volvo, Aston Martin and Land Rover have combined to report losses in six of the last eight quarters.

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