Ford Closes Aston Martins $848m Sale

By: Jenny Mclane

The Ford Motor Co., in the second quarter of this year, will close the controversial sale of its British luxury sports car brand. Aston Martin, after twenty years with Ford, was valued at $925 million. Ford retained a small stake which is worth $77 million hence the purchaser acquired the brand for $848 million.

Under the terms of the sales agreement announced at Aston Martin's headquarters last Monday in Gaydon, England, the automaker will sell Aston Martin to a consortium led by motor racing entrepreneur David Richards. His partners include Aston Martin enthusiast John Sinders and two Kuwait investment firms - the Investment Dar and the Adeem Investment Co. Ford is expected to continue to supply vital components such as engines to the new owners of the brand but it will no longer have a say in routine operations.

Richards said that Ford will long be remembered for saving Aston Martin - the brand best known as superspy James Bond's vehicle of choice. "They've been a superb custodian," Richards said. "The task we now have is to build on the strong foundation Ford has left us with."

"Aston Martins were cars you only used every now and then," said Garel Rhys, the director of the Centre for Automotive Industry at Cardiff University in Wales. "You might take one out on the weekend or to a wedding, but only if you were willing to risk being late."

Aston Martin went bankrupt several times before Ford acquired it. The Ford before was the antithesis of the Ford Motor Co. today. With cash overflowing, the Dearborn automaker saw Aston Martin as a key to fill in the international sports car spot in its lineup. "Ford probably feels it's as good as it gets -- and it probably is," Rhys added. Even if Aston Martin remains profitable, Rhys said it will require a major investment to bring new models to market when its current stable reaches the end of its useful life. Rhys also noted that standalone automakers have not been successful in today's marketplace, adding that Aston Martin will have to buck this trend if it is to survive.

But other experts in the auto industry contend otherwise. Justin Mirro, the managing director of Jeffries investment bank and head of its automotive group, said that the deal negotiated between Ford and the consortium is a sound one. "The new ownership of Aston Martin is committed to growing the business globally while protecting the integrity of the brand," said Mirro. "No one is better equipped to lead this growth than David Richards, a passionate supporter of motorsport racing and a successful developer of global brands for many of the automotive OEMs."

Lewis Booth, the head of Ford's European operations, said the decision to sell off Aston Martin makes sense. The automaker, which posted a $12.7 billion loss in 2006, is still in the long process of recovery. Its major restructuring plan would likely to cost billions more. Aston Martin may be profitable, but the automaker needs a timely financial aid to defray restructure expenses. "For Ford, this is a bittersweet day," Booth said. But he added Aston Martin was "a logical divestiture choice. Aston Martin will continue to have a great owner, committed to its future."

After the sale, the automaker will concentrate more on its bread and butter vehicles and is expected to continue with the revelations of new product lines. Its best-selling F-Series, which is equipped with and other refined auto parts, will continue to reap the utmost attention from the automaker.

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