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AUGUST 23, 2002

Ford and Jaguar Racing

So Ford Motor Company sources say that there are no plans to sell Jaguar Racing. In some ways this is not a surprise because those who think back three years will remember that Jacques Nasser, then the chief executive of Ford, went to the German GP and denied the very existence of any plan to turn Stewart Grand Prix into a Jaguar team - just a few weeks before it all happened. Nasser was economical with the truth for reasons which were never really clear and perhaps we are looking at a similar situation now - albeit in reverse.

But let us assume that Ford sources are being truthful. What then is the marketing logic behind supporting both Jaguar Racing and Jordan-Ford? Why would Ford do such a thing? One can argue that economies of scale make it logical to try to exploit two parallel brands on the worldwide scene. It is a nice idea but it does not really make any sense. How can a Ford-branded team compete against a Jaguar-badged operation? Will Jaguar customers be happy to see their luxury marque's sleek automobiles being beaten by a company that sells cheap and cheerful cars for the mass market? That might help Ford sell cars but it is going to be disastrous for Jaguar. And if Jaguar ends up winning what is the justification for Ford supporting Jordan? One can argue that two teams will speed up development but as Honda has tried that and is now going in the opposite direction one would have thought Ford managers would have taken notice of that.

The Jaguar Racing F1 program has been successful in that it has somewhat changed the image of the brand. At the same time it has had very little influence on Jaguar sales in the markets where big growth was expected. The Germans are not rushing to buy Jaguars. The original plan was for Jaguar Cars to take over more and more of the funding of the F1 program from Ford but the figures simply do not add up at the moment.

From a financial point of view there are also questions: if Jordan is paying for its engines why would Ford want to be associated in the way that Eddie Jordan suggested that they would be. His word for the relationship was "a partnership". The implication was that the team will not be a simple customer. Was that just a marketing ploy on behalf of Jordan?

The other question one must therefore ask is what is going to happen to Dietrich Mateschitz's Red Bull money, which will still be knocking around if there is no deal with Jaguar. Can Ford afford to look a gift bull in the mouth? Jaguar Racing is the perfect vehicle for Mateschitz and a sale would be the perfect opportunity for Ford to get back some of the huge sums of money which has been poured into Jaguar - with little to show for it. It would also provide the chance to boost Ford sales in the United States if the Team Red Bull USA were to feature Ford-badged engines.

One thing is quite certain: the recent survey by Ford management into the best way for Ford to be successful in F1 is unlikely to have come up with the long-term solution of having two brands in competition. Ford has often in the past thrown teams into competition with one another to see who comes out ahead and perhaps this is what is now going on but we cannot envisage that this will be for a period of three years, which Jordan says is the length of the his contract.

If it was a one year deal we might be convinced...