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Jaguar Land Rover record losses


Gurgeh

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It will get even worse later in 2019. But then things should stabilize at JLR. As you said, diesel power for cars and light trucks is a dead end everywhere in the world. 

JLR's "Change and Accelerate" organizational transformation program focusing on autonomous, connected, electric, and shared vehicle technologies is already underway. https://media.jaguarlandrover.com/news/2019/01/jaguar-land-rover-implements-next-phase-transformation-programme

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2 hours ago, Harley Lover said:

B-b-b-but it was all Ford's fault that JLR wasn't doing well, and once freed of Ford's shackles, all would be well. Right?

Not quite sir. Ford's management of Jaguar & Land Rover was a royal screw up, that's true. But when JLR was sold to Tata Motors, the Great Recession hit. In the first year of Tata stewardship, JLR was in dire straits. Some automotive industry analysts in the UK and elsewhere weren't even sure the company would survive. It incurred 400 million £ in losses in 2008-2009 fiscal year and had major trouble accessing credit.

Ratan Tata gave JLR managers a lot of autonomy. Something they didn't have before with their previous owners. Ford in particular, but BMW, BAE, and Rover Group too. Mr. Tata trusted JLR employees to bring the company back to health. They succeeded beyond expectations.

A decade later, JLR once again faces big challenges. Some common to the global automotive industry overall, others specific to them. As mentioned previously, JLR's transformation plan is underway. There will be more tough decisions that they'll have to make in the next year or two. But they'll come back stronger than ever before.

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13 hours ago, rperez817 said:

Mr. Tata trusted JLR employees to bring the company back to health. They succeeded beyond expectations.

A decade later, JLR once again faces big challenges. 

So, did they exceed beyond expectations, or are are they posting record losses? It appears the same geniuses who "succeeded beyond expectations" are now posting record losses. Time for them to own their failure.

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30 minutes ago, Harley Lover said:

So, did they exceed beyond expectations, or are are they posting record losses? It appears the same geniuses who "succeeded beyond expectations" are now posting record losses. Time for them to own their failure.

Yes sir. When Ford sold JLR to Tata Motors in 2008, both Ford and JLR were near bankruptcy. Under Tata's stewardship, JLR more than doubled sales between 2011 and 2015 and had EBIT margins 11% or better every year in that timeframe.

Profitability started to weaken in 2016. The "record losses" are due to the £3.1B accounting charge it took in the most recent quarter. It still incurred a loss of £358m in that quarter when one-off costs taken out.

Main challenges for JLR now are as follows.

  • Brexit
  • Decline in diesel powered cars and SUVs worldwide
  • Weakening market in China
  • Investment in electrification and autonomous vehicles; transition Jaguar to an electric brand
  • Excess plant capacity

The road ahead is going to be tough as Dr. Speth and JLR managers continue to execute their turnaround plan. But they'll make it happen.They're not hindered by Ford mismanagement, and they own it.

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36 minutes ago, rperez817 said:

They're not hindered by Ford mismanagement, and they own it.

You mention that Ford mismanaged JLR on a regular basis.  But the truth is that without Ford, JLR would have gone under.  Did Ford make mistakes?  Sure, but they bought a company that was a basket case and saved it.

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5 hours ago, CurtisH said:

You mention that Ford mismanaged JLR on a regular basis.  But the truth is that without Ford, JLR would have gone under.  Did Ford make mistakes?  Sure, but they bought a company that was a basket case and saved it.

Alan Mulally saved JLR by helping find a proper steward for the company shortly after he became CEO of Ford. Ford itself was a basket case at the time. He recognized that Ford could barely keep itself afloat, let alone manage the other brands/companies that Ford acquired over the years.

Mulally is one of the greatest business executives of the 21st century. His actions saved at least four car companies: Ford, JLR, Volvo, and Mazda.

 

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1 hour ago, akirby said:

JLR succeeded because Tata injected a boatload of capital.  

The capital Tata Motors invested was certainly necessary. But not sufficient for JLR's success. BLMC/British Leyland, Rover Group, BMW, and Ford all provided capital to Jaguar and Land Rover in the past, yet none of them could manage the brands properly.

The most important things Ratan Tata provided beyond the capital injection to ensure JLR's success were trust in JLR's employees and the freedom for those people to pursue their own strategy. Dr. Speth said the following in an interview with Economic Times last year.

"He invested in us and gave us the freedom to develop our own way. There was a time wherein we didn’t know how we would pay the next month's salary, we were in huge debt along with losses. But he offered us complete support. Without Ratan Tata, JLR would not exist here anymore. 

After 10-years, it is fantastic to see what the team has delivered. I would say that we had the best supervisory board on earth because you can call Ratan (Tata) and tell him what you want to. 

One of the qualities of Ratan (Tata) is the trust he reposes on people. He gives them complete freedom and that has helped us shape the future we want to live in."


 

 

 

 

 

 

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3 minutes ago, akirby said:

Lincoln and Mercury are brands not companies.

I will agree with you about Mercury but Lincoln is a separate company bought by Ford (similar to how Ford bought the other automotive companies/brands) and is currently presented and managed in the same manner.

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5 minutes ago, twintornados said:

I will agree with you about Mercury but Lincoln is a separate company bought by Ford (similar to how Ford bought the other automotive companies/brands) and is currently presented and managed in the same manner.

It was a separate company but today it's just a division of Ford despite what the name says.  They don't report a separate balance sheet - it's all rolled up into Ford.

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13 hours ago, rperez817 said:

The capital Tata Motors invested was certainly necessary. But not sufficient for JLR's success. BLMC/British Leyland, Rover Group, BMW, and Ford all provided capital to Jaguar and Land Rover in the past, yet none of them could manage the brands properly.

The most important things Ratan Tata provided beyond the capital injection to ensure JLR's success were trust in JLR's employees and the freedom for those people to pursue their own strategy. Dr. Speth said the following in an interview with Economic Times last year.

So, write a blank check and JLR will succeed?

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