Ford Puts Up More Money to Aid Jaguar

The Ford Motor Company has invested £1.2 billion ($2.1 billion) in its unprofitable Jaguar unit to help pay for a reorganization at the luxury-car division.

A Jaguar spokesman, Don Hume, said yesterday that Ford provided the money by buying preferred shares in the unit. He declined to say how the investment would be used. The amount almost matches the $2.5 billion that Ford paid for Jaguar in 1989.

Jaguar, based in Coventry, England, posted a pretax loss of £430 million last year, and Mr. Hume said that business conditions at Jaguar have worsened in 2005.

Jaguar ended manufacturing at a British plant last year, laid off 1,150 workers and scrapped a plan to build 200,000 vehicles. Ford, which in the third quarter reported its first net loss in almost two years, does not have a target date for Jaguar to break even.

"Ford needs Jaguar as a global luxury brand," said Jim Hall, an analyst at the consulting firm AutoPacific in Southfield, Mich. "Volvo really isn't it," he said, referring to the automaker's Sweden-based unit that focuses its marketing on safety features.

Jaguar, which made 126,000 cars in 2003, expects to build 85,000 this year and may cut production to 80,000 next year, according to CSM Worldwide, a Detroit-based market researcher.

Ford is also preparing a North American cost-reduction plan including plant closings, amid declining sales of sport utility vehicles in the United States.

Ford has dropped a target for its Premier Automotive Group of luxury European car brands to contribute a third of automotive profit by 2006. Premier includes Jaguar, Land Rover, Aston Martin and Volvo.

The recapitalization at Jaguar was approved by Ford at the end of 2004 and put in place this month, Mr. Hume said. Jaguar this week started production of the aluminum-body XK car, which will go on sale in March.

Jaguar sales in the United States, the brand's largest market, fell 34 percent through November from a year earlier. Sales of the $30,000 X-Type, once promised to be the driver of expanding sales, declined 49 percent in the same period.