The building you see above was once the North American headquarters of Ford Premier Automotive Group in Irvine California (its now Taco Bell’s headquarters, or I think it used to be). The brainchild of Ford CEO Jacques Nasser it was, in a sense, useless empire building. It included Lincoln, (for some reason) Mercury, Aston Martin, Jaguar, Land Rover, and Volvo. Where did it go wrong?
Dreamed up in 96' but coming to fruition in 99', Nasser had big dreams for PAG as it became known in some circles. He set lofty goals across the board for PAG:
- A million vehicles a year 10 years out and 80% of the company’s entire profit
- He wanted Volvo selling 650k a year.
- Jaguar, with the help of the then new X Type, would be pushing 800k a year.
But none of that happened and it was a shitshow early on, almost from inception. Nasser left in 01'. By October of that year, Ford had already pulled Lincoln and Mercury out from under PAG citing internal confusion of the marques. To make matters worse, Ford’s ambitious plans for Jaguar never saw the light of day because of falling sales and Detroit having to leverage the failing company financially.
Internally, Ford pushed for the brands to work together, which was the whole point of PAG to begin with. But with different dealer networks, synergies off and each brand having their own unique market, things were hard. Its one of the reasons the X Type failed (more on that in another write up.). The car was too “mass market” for some because of its Mondeo underpinnings.
There was sharing though, but not to much success. The DEW 98 platform was shared with the Thunderbird, Jaguar XF and Lincoln LS, which also used Jaguar V6 and V8 engines. Aston Martin got a piece from everyone including random things like Jaguar V8's, Volvo keys and sound systems etc. Apparently the first gen Navigator and LS were heavily influenced by Jaguar designs, though I’ve never seen where.
Ultimately, PAG was a failure all around, with nothing coming out of it being successful. Jag’s supposed game changers the S and X types were terrible, and some have said that Ford actually made Volvo worse. Professor Garel Rhys of Cardiff Business School said of Ford’s failure with Volvo : Volvo used to be a mass-market car with a bit of attitude. Ford pushed the price up to compete with BMW and then increased production; they undermined their own market penetration. It was bizarre, they wanted higher prices and more sales, there’s no demand curve on earth that follows that path, especially in a recession.”
They actually lost market share after Ford bought them. Its been said that at times Volvo was sort of the odd man out in the group, being a part of it but not at the same time. You can MAYBE find a few parts here and there in some used PAG vehicles from that era, but the last thing still being produced from PAG is the XF, which is long in the tooth.
By 2004, Ford has spent $17 billion on this experiment. Just 2 short years later, after Alan Mulally came on board, Ford began dismantling PAG. Aston was first to go being sold to an invesment consodriom headed by Prodrive chariman David Richards. They bought it for $925 million.
Tata bought Jaguar Land Rover for $2.3 Billion in 2008 and hasn’t been the same since. Its seemed like they needed to be left to do their own thing and its been working.
Volvo was the last hold out. Ford sold Volvo to Geely in 10' for $1.8 billion. Sometiems its semeed as though they never got their groove back after Ford went through them.
We all know the fate of Mercury, but some have blamed the dumpster fire that was PAG as the reason for Lincolns struggles since forever it seems.
Could PAG have worked better in the right conditions? Maybe. One has to just look at how VAG built their castle with some of, if not most of the worlds most storied brands. And for the most part it worked for them. But where do you guys think the Premier Automotive Group went wrong? Was it the product? Or the management?