Ford's Survival of the Fittest Scheme

The law on survival of the fittest now applies with the Ford Motor Co. as India's Tata Motors is expected to take over Ford's Jaguar and Land Rover after a thorough bidding process.

Since last year, Ford has entertained the idea of selling the brands in order to overcome its financial crisis. With Tata Motors buying them for more than $2 billion, Ford finds a solution to counter its mounting debts.

Ford told Reuters that selling the Land Rover and Jaguar would greatly support its plan of multiyear restructuring in North America since those brands no longer obtain enough profit for the company. In 2006, Ford lost $12.6 billion. But with its cost-cutting measures, Ford recovered with $88 million gains through the first quarter of last year.

"There is still considerable work to do and while no final decision has been made, we will proceed with further substantive discussions with Tata Motors over the forthcoming weeks," Ford Executive Vice President Lewis Booth said.

Meanwhile, details about the negotiation are yet to be confirmed by both parties citing that it was a confidential process.

Tata Motors' acquisition of the Ford's high-profile brands is expected to promote subcontinent companies' expansion in the auto market. That means, Tata, India's top vehicle makers, would be dealing with more than just the ACC cabin filter this time.

"We hope both parties can reach an agreement in the forthcoming weeks, though these are complex discussions and there is still much work that needs to be done before that position is reached," Tata said.

Ford looks forward to having a final agreement of the sale early this year. Goldman Sachs Group Inc, HSBC Holdings Plc and Morgan Stanley stand as Ford's advisers while JP Morgan Chase and Co. take the same role for Tata.

In JD Power's latest sales satisfaction in US, Jaguar got the third rank while the Land Rover landed on the 11th spot. However, sales records showed that it's not making enough money for Ford these past few years that is why Ford had to find buyers for these luxury car brands.

In 2000, Ford acquired Jaguar for $10 billion while it spent about $2.5 billion for Land Rover in 1989.