U.S. $ 500,000,000

Maxmil · 8 Dec 2002, 12:28 (Ref:445551)

is reported by the New York Times this morning to be the loss at Jaguar in fiscal 2002. The eye popping figure was buried in a lengthy article about the relationships between Ford Motor Company and their investment bankers, Goldman Sachs. $ 500 Mil. is a big number even for Ford, and it may explain why the F1 effort at Jaguar is coming under such pointed scrutiny lately in Dearborn.

Liz · 8 Dec 2002, 12:44 (Ref:445565)

WOW!

When I heard that Eddie Irvine was being paid more than the Chairman of the Board at Ford, and nobody there knew who he was, that was certainly a big clue as to why things aren't working out.

Valve Bounce · 8 Dec 2002, 13:01 (Ref:445581)

This is astounding. So it might be that the Jaguar cut in expenditure is part of an overall policy in reducing costs for everyone and explains why Eddie was fired also.
BTW, Didn't Ford fire their CEO? that wasn't being paid more than Eddie?

Maxmil · 8 Dec 2002, 14:30 (Ref:445641)

Quote:

Originally posted by Valve Bounce
Didn't Ford fire their CEO? that wasn't being paid more than Eddie?

Right. Jacques Nasser had the job until, I think, October of 2001 when he was sacked in the traditional Ford manner and William C. Ford, Jr. took over. If the loss was really that big, it certainly could have caused the Irvine firing as a cost cutting measure. I still think Lauda's was related to the Jordon/Cosworth deal which he tried to scuttle.

**Adam43** · 8 Dec 2002, 14:40 (Ref:445648)

Does Jaguar racing come under Jaguar Cars (seeing as they have nothing to do with each!)?

Jaguar Cars (the proper one in Coventry) have just introduced a new car - the Mondeo, sorry X-Type and been developing there new XJ range (all Al - lovely).

Anyway could be part of the reason? I haven't read the accounts though so I don't know.

imull · 8 Dec 2002, 15:39 (Ref:445668)

I cant see Jag losing 500 million. They have a highly successful group of cars just now and are selling really well from what I have seen.

Fiat are losing 2m a day and that is catatrophic for a company their size.

500million, I would have thought is more likely to be the total F1 Jaguar budget since they bought Stewart GP out.

neilap · 8 Dec 2002, 21:51 (Ref:445815)

Ford lost over 1k dollars per car sold last year. I dont know how they stay afloat. How does one lose more money than the annual income of a small country?

**ghinzani** · 8 Dec 2002, 22:10 (Ref:445829)

They shoulda sold it to Red Bull when they had the chance

Mr V · 9 Dec 2002, 00:54 (Ref:445980)

Quote:

Originally posted by neilap
Ford lost over 1k dollars per car sold last year. I dont know how they stay afloat.

Was that just in America? I imagine that the British branch of Ford keeps the company afloat as the prices for new cars in Britian are astronomical!

neilap · 9 Dec 2002, 05:13 (Ref:446067)

http://www.forbes.com/home/2002/11/1...1114honda.html

An interesting article. Of-course being a Honda geek all these little tid-bits reinforce my obsession.

**Adam43** · 9 Dec 2002, 08:22 (Ref:446135)

Quote:

Originally posted by ghinzani
They shoulda sold it to Red Bull when they had the chance

what the whole of Ford?

To be fair the F1 team is a very, very small part of this vast sum. (in fact I doubt it is even included as Jaguar Cars and Jaguar Racing are quite separate.).

Maxmil · 9 Dec 2002, 13:55 (Ref:446286)

Quote:

Originally posted by AdamAshmore
To be fair the F1 team is a very, very small part of this vast sum. (in fact I doubt it is even included as Jaguar Cars and Jaguar Racing are quite separate.).

There is just no way that I know of to verify the $500MM (Million) loss figure, but I did take a shot at it. What the published financials do show is that Ford reported Net Income for Automotive Operations in Europe of U.S.$266 MM in 2001. (Europe, was the only geographical area to show a profit in that year.) It is a stretch for me to believe that Jaguar cars or even cars plus the F1 team actually contributed a $500MM loss to that European profit in 2001 unless there were some very large one time write offs at Jaguar. None are disclosed, but there are other such items disclosed for 2001 which are as small as $13MM. It is possible that Jaguar showed such a loss in 2000 when Ford's European Automotive operations posted a one time loss of $1,019MM for "Asset impairment and restructuring costs in Europe", but I have not the time or initiative to go back and look for details of that figure.

In sum, there is no way of knowing how the Times reporter came up with the figure, but I am inclined to believe he got it wrong somehow, or else it reflects some one time charges back in 2000.

JohnSSC · 9 Dec 2002, 14:11 (Ref:446301)

Keep in mind folks that one year does not make or break a company the size of Ford. Ford earned something like $1.2 Billion (American) not too long ago. A more important number (and one I do not have) is their performance over the last five years.

Jag does not support the racing operation alone, nor would it be expected to generate enough $$ to make the entire company profitable.

**Adam43** · 9 Dec 2002, 14:14 (Ref:446305)

I agree with you. It is possible there could have been some one-offs. There have been some job cuts recently (in Jaguar Racing and Jaguar Cars Proper).

But I'm not sure. In a Jagaur magazine recently there was a similar story (although not for so much IIRC), I'll try and find it. However I seem to remember that it wasn't very informative!