Jaguar, General Motors In Talks
Oct. 10, 1989
LONDON (AP) _ Jaguar PLC said it is in talks with General Motors Corp. about a possible cooperative operating agreement, setting the stage for a tug-of-war between GM and Ford Motor Co. over the British automaker.
Jaguar said Monday that GM was considering buying a minority stake in Jaguar as part of such an arrangement.
Ford announced three weeks ago that it wanted to buy up to 15 percent of Jaguar, and left open the option of making a full bid for the British company.
Ford said the approach was friendly, but Jaguar called Ford's interest unwelcome. The money-losing luxury car company maintained that it wanted to remain independent, but it also said it might be interested in building ties with a major auto company. It was widely believed to be holding talks with General Motors.
Jaguar's brief statement said: ''Jaguar and General Motors Corp. are in discussions concerning the possibility of the two companies entering into certain manufacturing, marketing and other commercial joint venture arrangements. As part of these arrangements, General Motors is considering taking a minority interest in Jaguar.''
Jaguar declined to elaborate.
GM spokesman John Pekarek in Detroit confirmed his company has had discussions with Jaguar for several months regarding possible joint manufacturing, marketing and other ventures.
''In this connection, GM is discussing the possibility of acquiring a minority interest in Jaguar to assist Jaguar in remaining an independent British owned manufacturer,'' Pekarek said, refusing to elaborate.
From Dearborn, Mich., Ford said the announcement by Jaguar and GM ''does not affect our view in any way'' about the advantages in a Ford-Jaguar association.
''We believe Ford is uniquely qualified to assist Jaguar because of our long commitment to he UK, our British research, research and development capability, our sourcing to UK suppliers, and our continuing investment in our UK manufacturing facilities,'' the Ford statement said.
The announcement came after London's Stock Exchange closed. Jaguar finished at 685 pence, or $10.82, a share, down 46 pence, or 73 cents, on active trading of 10 million shares.
Dealers said the price fell on speculation that an alliance with GM could discourage a hostile bid by Ford or any other auto maker for Jaguar.
Trading has been very heavy since Friday, when Ford, which previously owned 1 percent of Jaguar, received U.S. regulatory clearance to buy up to 15 percent. Ford received early clearance from the Federal Trade Commission, which must approve major share acquisitions under the Hart-Scott-Rod ino Act.
Jaguar's rules of association prohibit any shareholder from taking more than a 15 percent stake before the end of 1990 and give the British government a ''golden'' share with which it may block any bid for the formerly state- owned company. These conditions were imposed when the British government privatized Jaguar in 1984.
Analysts have said Jaguar needs to link up with a major car company to provide the economies of scale necessary to remain competitive.