Jaguar Lands On Its Feet Again
The British maker of speedy and stylish cars lives another life as Ford sells its luxury marque to an Indian company known for autos aimed at the middle class
Paul A. Eisenstein
From the Print Edition:
Kevin Costner, July/August 2008
Who says cats have nine lives? Just ask Jaguar. The long-suffering British automaker has gone through at least that many, and it appears this cat is about to be granted yet another reprieve, bought out from Ford by an Indian automaker. Since Sir William Lyons built his first Swallow sidecar more than three-quarters of a century ago, the company has been nationalized, privatized and repeatedly left for dead, yet somehow, some way, it always lands on its feet. In 1989, the British government gladly sold off its controlling interest in Jaguar to the Ford Motor Co., which shelled out an astounding $2.5 billion for what was little more than the Jaguar reputation—and a tarnished one at that.
Since then, Ford, increasingly frail itself, has pumped in billions more, in the hope of transforming its troubled acquisition into the cornerstone of a global luxury network dubbed the Premier Automotive Group. Rather than prop up Ford's balance sheet, Jaguar has threatened to plow it under, so now, a struggling Ford is ready to say "Tata."
That's Tata, as in Tata Motors, itself the centerpiece of an ambitious Indian mega-conglomerate founded by the self-made billionaire Ratan Tata. On March 26, the emerging automaker announced it would spend $2.3 billion to acquire both Jaguar and Ford's other once-promising British marquee, Land Rover. It's a curious move for a company that, until now, has focused on building basic transportation for the subcontinent's emerging middle class. At $2,500, the plastic-bodied Tata Nano microcar—announced with much fanfare, barely a month before the Jaguar deal was completed—is about as far from a 400-horsepower, wood-and-leather-bedecked luxury saloon car as one could imagine. Yet the acquisition may be far less incongruous than it first appears. With the purchase of one of the empire's former crown jewels, the Indian maker hopes to finally be taken seriously, and in the process, transform itself into a global automotive power.
Jaguar's roots are actually as humble as Tata's. Long before he could add the "Sir" to his name, William Lyons set out to build a series of lightweight aluminum motorcycle sidecars, in the coastal town of Blackpool, England. Founded in 1922 as the Swallow Sidecar Co., the business morphed into SS Cars Ltd. in 1928, when Lyons moved his operations inland to Coventry and built his first, modest automobile, the SS 1, in 1931. Like most of the country's manufacturers, the company was drafted for war production, in the late 1930s. And when peacetime returned, in 1945, the name was changed again, to Jaguar Cars Ltd.
Whether you pronounce it Jag-wahr, like most of the world does, or Jag-U-wahr, like the Brits, the company that emerged from the war quickly made a name for itself with a procession of such fast, sleek sports cars as the legendary XK120, which lays claim to being the first automobile to comfortably cruise at 120 mph. Turning to the aircraft designer Malcolm Sayer, Jaguar launched an aggressive motorsports campaign, with its C-Type racer soon scoring victories across Europe. The quick and nimble D-Type, which overwhelmed the competition at the 1955 endurance race, the 24 Hours of Le Mans, was arguably also one of the most beautiful cars to take to the track, and probably won as many fans and followers for its distinctive design as its performance.
There's long been an adage in the auto industry: "Win on Sunday, sell on Monday." Overstated, perhaps, yet Jaguar's wins began to translate into serious business as the automaker wisely produced a street-legal version of the D-Type. But before Lyons and company could savor their success, the Coventry plant went up in flames. Other struggling manufacturers might have rolled over, but it didn't take long before the Jaguar was on its feet—again. And this time, Lyons—who had been knighted in 1956—wasn't making any compromises. He built an all-new car specifically for the road, rather than the track. The blindingly voluptuous E-Type made its debut in 1961, at the Geneva Motor Show, Lyons explaining its shape in typically blunt fashion. "I like curves," he declared to a fawning automotive media. It would provide the carmaker's legacy—and its visual theme for decades to come.
But the war years had been rough on Great Britain, and peace hadn't made things much better. With food shortages came political turmoil, much of it played out on the nation's factory floors, where left-wing unions battled manufacturers—and themselves. One after another, England's automakers failed, many of them to be swept up by the government. By 1975, Jaguar was one. The company's new managers had little interest in the automotive business—and they made little effort to pretend otherwise. Mike Dale, long the head of Jaguar's North American operations, recalls that company loyalists hid the many trophies the automaker had won in the 1950s, to keep the government's bureaucrats from selling them off.
It was a shotgun marriage, and an exceedingly unhappy one for everyone involved. And so, by the mid-1980s, with the Conservative government of Margaret Thatcher in power, it was inevitable that Jaguar would be privatized. The only question was, who would buy what was left of the damaged brand?
To borrow another cliché, hindsight is 20/20, and nowhere is that more apparent than in the auto industry, where mistakes are often measured in the billions. True, the British brand was, as seemingly always, in trouble, but back then it appeared to be an ideal acquisition, and when the Brits made it known they would sell their golden shares, a number of potential suitors started sniffing around, notably Ford and its longtime archrival, General Motors. While both of the companies had their own luxury brands—Lincoln and Cadillac, respectively—they were players only in the traditional American market. Jaguar offered an opportunity to compete against such surging imports as Mercedes-Benz and BMW, both at home and abroad.
The bidding war was fierce, or so it seemed. When the figures got up to $2.5 billion, GM unexpectedly bowed out. Why? That's a question often asked in automotive circles. "Because they were clever," suggests David E. Cole, chairman of the Center for Automotive Research, in Ann Arbor, Michigan. Cole insists that the industry giant always knew Jaguar was damaged goods, and simply entered the bidding war as "a strategic moveÉto cleverly suck billions out of Ford." Pose that theory to GM managers and they smile—then change the subject.
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