Southfield/Michigan: Ford Motor Co’s sale of premium UK brand Jaguar, a bow to sagging sales and the automaker’s own mass-market leanings, dashes a dream of Henry Ford II, grandson of the company’s founder.

Hank the Deuce, as he was known, had a “passion for Jaguar,” said Maryann Keller, an independent auto analyst and consultant based in Greenwich, Connecticut.

“He always wanted a European luxury brand. He was very much of an Anglophile.”

While Henry Ford II retired from running the automaker in 1979, he continued to influence the company until his death in 1987. Two years later, Ford fulfilled his vision by buying Jaguar, in part because it feared rival General Motors Corp might follow through on talks to acquire a partial stake.

“At high levels, they coveted this,” David Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan, said of Ford.

“They saw this was going to slip away from them and they jumped on it.”

Failed efforts to broaden Jaguar sales, along with losses in Ford’s main auto business that drained cash, would eventually make the unit a luxury the company could no longer afford.

Ford’s early steps at Jaguar showed promise, with the company investing undisclosed amounts to increase efficiency at UK factories. The unit improved enough in the 1990s that Nicholas Scheele, who ran Jaguar from 1992 until 1999, received a knighthood in 2001 for his efforts to revive the brand.

Scheele later headed Ford’s European unit and was chief operating officer from 2001 until 2004.

The automaker doubled down on its European bet by acquiring the auto unit of Volvo AB in 1999 and Land Rover in 2000. Those acquisitions, plus Jaguar and UK-based Aston Martin, purchased in 1987, were put into a unit named Premier Automotive Group.

Ford, creator of the Model T and modern mass production, began working to give Jaguar more common appeal. It wanted to expand the unit’s worldwide sales to 200,000. The effort yielded offerings such as the X-Type, nicknamed the “Baby Jag,” a model based on the Mondeo sedan Ford makes in Europe.

“This is not a luxury car,” analyst Keller said. “They forgot how long it takes to nurture a luxury brand. There were quality issues, labor issues, and they were not able to overcome their mass-market producer ambitions.”

Ford also acquired a team in Formula One racing and used it to promote Jaguar. Scheele told reporters at the 2002 Paris auto show that Jaguar would post a $500 million annual loss.

Then-Chief Executive Officer William Clay Ford Jr said at an analyst conference later in the year that Scheele wasn’t supposed to disclose that information. Ford announced in 2004 that it was cutting jobs and revamping Jaguar operations once more. It also exited Formula One, a move that generated $312 million in expenses.

In December 2005, Ford disclosed that it invested $2.1 billion in Jaguar to help pay for the latest reorganisation.

Source : DNA