In the USA, UBS Warburg has upgraded Ford’s shares from “Reduce” to “Hold”. Despite this, the analysts have reservations about the future and believe that a re-scaling of Ford’s business and a more drastic restructuring will be necessary.
The progression of the Kwik-Fit sale by Ford has resulted in speculation in the press as to the selling price. The latest figures vary around the 300 – 350 million pound mark. A Ford spokesman in the USA told T&A that the company was not prepared to comment on the selling price, other than to say that “Kwik-Fit will not be sold unless there is a fair price for the company. Discussions are progressing towards that end but the conclusion of the sale could be within a week, a month or sometime next year.”
Hayes Lemmerz International, Inc has announced several key appointments to its Global Leadership Team. The following individuals will report directly to Curtis J. Clawson, Chairman of the Board and Chief Executive Officer: James A. Yost has been appointed as Chief Financial Officer (CFO). Mr. Yost retired from Ford Motor Company in 2001 after serving as Vice President of Corporate Strategy. Kenneth A. Hiltz will continue in his role as Chief Restructuring Officer (CRO). He will continue to play a key role in the development and implementation of the Company’s restructuring plan. Brian O’Loughlin has been appointed as Chief Information Officer (CIO). Mr. O’Loughlin joins the Company from Revlon, Inc., where he served as CIO. Edward W. Kopkowski has been appointed to the newly created position of Vice President of Operational Excellence. Mr. Kopkowski previously served as Founder and President of Kopko Associates, Ltd., a consulting firm. “These talented professionals will bring tremendous strength to our organisation and have a major, positive impact on our global business,” said Mr. Clawson.
The Ford divestment sale of Kwik-Fit is drawing to a close with apparently only one potential buyer left in the running. CVC Capital Partners, a private equity firm, seems close to buying the fast fit group from Ford for 300 million pounds. Ford is said to be retaining a share in the business that it may use to recoup some losses in the event of the market improving. There is no word on whether Sir Tom Farmer will remain with Kwik-Fit after the sale has been completed.
Continental Teves has been awarded a contract by Ford in the USA for the supply of advanced brake and chassis systems. The company will supply complete systems, including front calipers, booster, park brake system, four-wheel anti-lock brakes (ABS), brake assist and electronic brake force distribution as well as Conti Teves’s Traction Control (TCS) and Electronic Stability Program (ESP) technology.
Kwik-Fit, the fast fit chain snapped up by Ford for 1.6 billion US$ has proven to be a step too far for the motor manufacturer. Not only has the originally touted ticket price of 800 million not been reached in the sale, but the highest bid looks to be nearer 300 million pounds. The potential buyer, CVC, is still undergoing negotiations with Ford. However, in the wake of Enron, WorldCom and rumours of unusual accountancy practices at General Motors (denied by GM), there have been irregularities found in Kwik-Fit accounts. PwC, Ford’s auditor has found that liabilities for the fast fit chain have been understated by £3.4 million. The “error” came about by accounting for goods supplied, without taking the unreceived invoices into account.
In an article in the Financial Times, Sir Nick Scheele, chief operating officer of Ford, said that the company was making progress on the proposed sale of Kwik-Fit. He is reported as saying: “We’re pretty close on Kwik-Fit; you can anticipate an announcement in the medium term.”
In an interview with German newspaper “Handelsblatt”, Nick Scheele, President of Ford Motor Company, said that the sale of the Kwik-Fit chain was in its final phase and would provide a cash injection for the car maker. Scheele also announced that there would be a number of factory closures (both the number and locations were unspecified) in autumn 2003.
An appeals court in the USA has overturned the decision of a lower court granting class-action status to non-injury lawsuits against Ford and Bridgestone/Firestone over faulty tyres. The court decided that a class action (with all cases decided on the result of a single trial) would be unmanageable because of the large number of claims and the wide geographic spread. Claims affected by the ruling are for financial compensation only and not those alleging personal injury or death. Ford and Bridgestone/Firestone welcomed the decision.
Ford reported a loss of $800 million for the first quarter, compared to a $1.13 bn profit for the same period last year. The figure includes $708 million in goodwill write-downs, mainly for Kwik-Fit, although core automotive operations lost $310 million in Q1 (Q1 2001: + $748 m). Despite the figures, Ford shares rose 2 per cent as the company forecast that it would outperform the market in Q2.
Former Ford Chief Executive Officer Jacques Nasser received $17.9 million in compensation last year when he was replaced at the helm of the second-largest automaker amid losses and declining sales.
A judge presiding over a Ford Explorer lawsuit, in which a student was left paralysed, has threatened lawyers acting for Firestone with a fine and a custodial sentence for deliberately causing a mistrial. The lawyers referred to the fact that the student bought a bag of marijuana before the accident, despite the fact that the judge had expressly forbidden any mention of the drug in case it prejudiced the jury. The judge has asked the lawyers to demonstrate why he should not fine them each $500 and impose six months in jail for “knowingly violating a court order in an attempt to obtain a mistrial.”
Ford Motor Company faces a 2 billion dollar write down on goodwill and intangible assets in the sale of its non-core business operations in the UK. The sale of Kwik-Fit, bought for 1.1 billion dollars in cash and 200 million dollars in loan notes in 1999, is likely to raise only 800 million dollars. Ford says it is now close to establishing a shortlist of final bidders, including UK private equity firms Cinven and CVC, and the London-based capital division of Deutsche Bank.
The National Highway Traffic Safety Administration (NHTSA) has opened four separate defect investigations into the Ford Focus. Two of the investigations relate to possible airbag malfunctions, and the others concern rear wheel bearings failure and reports that the engine could catch fire. Aimed at motorists under 35, the Focus is the fifth best-selling car in the USA. However, since its introduction in 2000, it has been the subject of eight recalls.
The National Highway Traffic Safety Administration has ended its investigation into alleged failures of General Ameri*550 tyres, saying that it could find no safety defect. Ford was using the tyre to replace Firestone tyres and it was alleged that the failure rate of the General tyre was higher than that for Firestone. Many of the supposedly faulty tyres showed abuse and neglect on the part of their owners, it was revealed. When the investigation started, Ford removed the General tyre from its list of acceptable replacements. The Ford replacement programme officially ended at the end of March.
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