Ford-Tata Deal Just Got a Lot More Complicated

Ford-Tata Deal Just Got a Lot More Complicated


Remember how Tata of India was supposed to buy Land Rover and Jaguar from Ford for about $2 billion? Apparently, that’s only the tip of the iceberg and this deal is going to cost Tata a heck of a lot more money (and time).

You see, whoever ends up buying the two marques from Ford Motor Company (which should still be Tata, as far as we can tell) will need to invest in other Ford properties if they wish to proceed. They say that the “buyer of the brands would… need Ford’s research facilities to upgrade the products.” In a nutshell, this means that you buy the badges, but none of the technology or information underlying the model line. And this stuff doesn’t come for free.

What’s more, Tata would also be on the hook for pension liabilities, “and though there hasn’t been a number put up to it, we all know how expensive that can get.” As such, the agreement between Tata and Ford is really composed of 15-20 micro-deals. With all this complexity, it’s no wonder that it’s taking so long to iron out the details.