After that combined investment of over $5 billion, and having sunk another $10 billion into Jaguar over the years, Ford is now happy to sell both to the Tata group for barely $2 billion - with perhaps more bills to come since there is a billion-sized hole in the pension account.
The two brands together barely break even. Both are part of Ford's premier auto division, which sold a third brand (Aston Martin) earlier in the year, leaving just Volvo behind. Rover is profitable, but Jaguar reportedly lost over $700 million in 2006 and perhaps over $550 million in 2007; it is expected to lose $300 million more in 2008.
Rover sells close to 200,000 vehicles a year, but Jaguar sales have been falling quite sharply in its main market, the United States. Ford's strategy of using Ford platforms to build more volume-market Jaguars failed, and the focus now is back on selling luxury cars that score on styling, status and technology.
That potted history should underline the risks involved in Tata Motors taking charge of two of the car world's most iconic brands.
Ford paid what many thought even then was a vanity price, and has lived to regret it. It failed to get its business strategy right, and could not find a way to cross-fertilise Ford and its premium British brands.
Tata essentially has one basic car model with variants, and one off-roader, and it is developing an even more basic model (it also makes trucks, of course). What possibly can be the fit with Rover and Jaguar? Perhaps no fit will be sought, and they will run as independent businesses.
Cost-cutting is essential but may be ruled out since Tata has promised the workers' union that there will be no job losses. The union has therefore endorsed the Tata bid, but that could be the kiss of death.
The people whom Tata would want on its side are the dealers in the US, but they seem to think Indian ownership is poor branding. So what is the game plan? Nothing is known, except that Ratan Tata seems to have a good head for corporate strategy.
It is of course wonderful and exciting and a boost for Indian enterprise that a well-regarded Indian group should acquire such iconic car badges, whose brand legends have been built over generations and are almost impossible to replicate (ask Lexus).
But it is dangerous to substitute return on equity with business hubris when doing deals, and the whole thing had better make business sense.
Perhaps, Tata thinks that the two brands are coming at a bargain price, given the history of what Ford had paid for them. And with Jaguar managing to cut losses after changing strategy, the two businesses together might well yield a return in a couple of years.
The comforting thought is that Tata has so far made a success of its other acquisitions, whether in South Korea, Spain, Britain or the United States, and Corus seems to be getting slowly digested. Perhaps Jaguar will be too.
Meanwhile, the Indian experience with overseas acquisitions contrasts with those by other countries in the neighbourhood - Abu Dhabi has invested recently in Citigroup and a sovereign Chinese fund in Morgan Stanley.
Neither has sought management control. Lenovo did, but is an exception, whereas Indian acquisitions have usually tended to be for gaining control, and reflect the greater managerial depth and ability in Indian companies. The crucial test now is whether Tata will do what Ford could not.
