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DETROIT - Ford Chief Executive Alan Mulally says that it could announce the sale of its premium British brands Jaguar and Land Rover by the end of the year.
"We will probably have something to announce by the end of this year, toward the first part of next
year," Mulally told reporters at a ceremony marking the formal signing of the four-year labour contract reached last month with the United Auto Workers union.
Ford has narrowed the auction of Jaguar and Land Rover to three bids.
The remaining bidders include Indian carmaker Tata Motors Ltd and rival Mahindra & Mahindra Ltd, which has teamed up with buyout firm Apollo.
Ford has been exploring a sale of the brands since June. The brands have been valued by a Merrill Lynch analyst at as much as US$1.5 billion ($2 billion) combined.
Mulally was joined at the signing ceremony by Ford Executive Chairman Bill Ford Jr and UAW President Ron Gettelfinger at the automaker's headquarters in Dearborn, Michigan.
The Ford CEO said the automaker is keeping an eye on the slowing US economy and will adjust production of vehicles according to market demand.
US vehicle sales are on track to finish the year with the lowest tally since 1998.
With concern mounting about the risk of recession, many analysts are now expecting a continued slide in US vehicle sales through 2008, which would mark the third consecutive year of lower sales.
Ford, which posted a 0.4 per cent increase in US sales in November, set its targeted first-quarter production at 685,000 vehicles in North America, a 7.4 per cent reduction from year-ago levels.
"Clearly with the economy and the subprime and the credit (market) being down, we will continue to watch that very carefully through 2008 ... and adjust our production to match demand," Mulally said.
In wide-ranging remarks, Mulally also said the automaker has made a "significant improvement" in the competitive gap with Asian automakers with the new labour contract.
Ford and the other US automakers were looking to reduce their operating costs through the new UAW contract to be more competitive with Japanese automakers such as Toyota Motor Corp.
Ford clinched a new four-year labour deal for over 54,000 UAW workers on November 3 that will pay new hires lower wages between US$26 and US$31 an hour, including benefits.
Ford, which is restructuring its North American operations to return to sustained profits, also scaled back its plans to close 16 factories.
Ford Chairman Bill Ford said the company will respond to new fuel economy standards passed last week by the US Congress.
"We have to do it," Bill Ford said, but added that meeting the goal would be a "stretch."
- REUTERS