Premier Automotive Group

The Premier Automotive Group (PAG) was an organizational division within the Ford Motor Company formed in 1999 to oversee the business operations of Ford's high-end automotive marques. The PAG was gradually dismantled from 2006 to 2010 with the divestiture of its constituent brands.[1]

History

The Premier Automotive Group was formed in 1999 under then-CEO Jacques Nasser. It grew to include responsibility for the Lincoln, Mercury, Aston Martin, Jaguar, Land Rover and Volvo brands. By 2004, Ford had spent (by one estimate) $17 billion building on acquisitions to build up PAG.[2]

Lincoln and Mercury were returned to Ford direct control in 2002. Lincoln's headquarters had been merged into PAG's North American office, where it was run by a German executive who was based in London, England.[2]

The four import marques in the PAG, Aston Martin, Jaguar, Land Rover and Volvo, were essentially completely different auto companies with their own unique markets and dealer networks, so there were few synergies that could be reaped by combining them under one division. Ford attempted to push these brands to share parts and engineering in order to cut costs. This made some vehicles too similar to mass-market Fords, notably the Jaguar X-Type which was a capable compact executive car yet its reputation suffered mainly because it shared a platform with the Ford Mondeo. While Volvo had been one of the more successful entry-level luxury brands in the United States with the Volvo 740/940 and S70 when it was independent, it lost market share to the German luxury marques like BMW and Mercedes-Benz who had expanded their entry-level offerings extensively.[2]

When Alan Mulally became Ford's President and CEO in September 2006, the Premier Automotive Group began to be dismantled.[3] Ford sold 92% of Aston Martin, to a consortium of investors, headed by David Richards in 2007.[4] In September 2006, the Rover brand was secured from BMW by Ford to protect the Land Rover brand.[5] In March 2008, Ford sold Jaguar and Land Rover to Tata Motors of India. In 2010, Ford sold Volvo Cars, the last PAG brand, to the parent of Chinese carmaker Geely for $1.8 billion.[6]

Management

Headquarters

The Premier Automotive Group was based in London, United Kingdom. The Premier Automotive Group's North American headquarters were located in Irvine, California.

The Premier Automotive Group office in the United States was completed in 2001 at a cost of $68 million. It was the first Ford building and the first building in Orange County to qualify for Leadership in Energy and Environmental Design classification from the U.S. Green Building Council.[7] When the headquarters first opened, some of its floors were each specifically dedicated to one of PAG's brands.[7] The complex also included a separate 90,000-square-foot product development center.[8] In late 2008, a deal was announced to lease the former PAG headquarters building in Irvine to the Taco Bell restaurant chain. Although Ford planned to leave a small product development staff on the property, this was widely seen as the end of the PAG story and an ironic comment on the expensive failure of Ford's luxury-car strategy. The New York Times asked dryly, "Will they install a drive-up window?"[9]

Members

Aston Martin

Aston Martin was a member of PAG; it was sold on 12 March 2007 for £479 million.[4] However, Ford retained a £40 million (8%) stake in Aston Martin.[10]

Lincoln

Ford's luxury car division, Lincoln, was part of the Premier Auto Group in the late 1990s, but was pulled out in 2002 as part of Ford's marketing strategy to separate its "import" marques from its domestic ones. During the creation of PAG, Lincoln's line-up received a complete overhaul, beginning with the 1998 redesign of the Lincoln Town Car. The same year also saw the introduction of the Lincoln Navigator SUV and in 2000 the Lincoln LS, which shared its engines and platform with the Jaguar S-Type, was introduced. All three cars were designed in Irvine, California and were, according to many critics, heavily influenced by Jaguar design themes. In both years 1998 and 2000 Lincoln was the best selling luxury car brand in the US. After Cadillac surged back into the market in 2002, however, Ford pulled Lincoln out of the PAG in what is according to Jerry Flint of Forbes magazine an "impossible to make sense out of... strategy."[2]

Jaguar and Land Rover

On 18 September 2006, Ford announced the purchase of the Rover marque/brand name from BMW. As part of Ford's initial purchase of Land Rover in 2000, Ford had the option to veto the sale of the Rover name by BMW to any other company. BMW originally intended to sell the Rover name to Shanghai Automotive Industry Corporation, but had to wait 90 days to allow Ford time to discuss the deal. Ford decided in the end to buy the name outright. However, Ford did not plan to use the name in production, instead buying it merely to protect their use of the name Land Rover.[11]

Ford accepted the deal to sell Jaguar and Land Rover to the Tata Group in March 2008 for £1.15 billion. As part of Ford's sale of Jaguar and Land Rover to Tata Motors, the Rover brand name was included in the deal, as well as the Daimler and Lanchester marques.[12]

Volvo Cars

Geely was reported to have approached Ford in mid-2008 about a possible takeover of Volvo Cars. On 28 October 2009, Geely was named as the preferred buyer of Volvo Cars by Ford.[13][14] On 23 December 2009, Ford confirmed that all substantive commercial terms for the sale to Geely had been settled. Geely signed a deal with Ford to acquire Volvo Cars for $1.8 billion on 28 March 2010 and closed the deal on 2 August 2010. [6]

References

  1. ↑ "The Decline of Lincoln". HowStuffWorks.com. Retrieved 21 April 2010.
  2. ↑ 2.0 2.1 2.2 2.3 Jerry Flint (27 July 2004). "Ford's Premier Automotive Goof". Backseat Driver. Forbes.
  3. ↑ "What Ford's Losing With Volvo". The Money Times. Retrieved 2 June 2010.
  4. ↑ 4.0 4.1 "Aston Martin sold to UK-led group". BBC. 12 June 2007. Retrieved 19 July 2009.
  5. ↑ Ford buys Rover brand name from BMW from leftlanenews.com
  6. ↑ 6.0 6.1 "FORD REACHES AGREEMENT TO SELL VOLVO CARS AND RELATED ASSETS TO GEELY". Ford. Retrieved 30 March 2010.
  7. ↑ 7.0 7.1 "Ford Opens PAG Headquarters In California" from autointell.com
  8. ↑ Garrett, Jerry (11 November 2008). "Will They Install a Drive-Up Window?". Wheels (blog) (The New York Times). Retrieved 2010-06-02.
  9. ↑ Garrett, Jerry (11 November 2008). "Will They Install a Drive-Up Window?". Wheels (blog) (The New York Times). Retrieved 2010-06-02.
  10. ↑ Ford sells Aston Martin for $925 million at egm CarTech, 12 March 2007
  11. ↑ Ford buys Rover brand name from BMW
  12. ↑ "5 for 2 special: Tata acquires 3 other British marques in Jaguar, Land Rover deal". Leftlane News. 28 March 2008. Retrieved 28 March 2008.
  13. ↑ Clark, Andrew (28 October 2009). "Ford set to offload Volvo to Chinese carmaker Zhejiang Geely | Business | guardian.co.uk". London: Guardian. Retrieved 4 December 2009.
  14. ↑ "Geely/Volvo deal 'done by Feb'". Autocar.co.uk. 17 December 2009. Retrieved 22 December 2009.