Ford May Steer Jaguar, Volvo Offices to O.C.
In what would be another boost to Orange County’s growing automotive industry, Ford Motor Co. appears ready to move the North American operations of its Jaguar, Aston Martin and Volvo brands to Irvine.
The businesses would be combined with headquarters of Ford’s domestic luxury cars, Lincoln and Mercury, which moved last year from Detroit to Irvine.
Word of the proposed move, long rumored inside the world’s No. 2 auto maker, surfaced Monday in an online automotive industry magazine, TheCarConnection.com, which said the move was a done deal “barring a last-minute change.” The article was based on information from anonymous sources.
Lincoln Mercury spokesman Tom Mattia confirmed Monday that Ford officials have been discussing the prospect of combining the European brands’ domestic operations with Lincoln Mercury to share administrative, planning and design resources. A final decision, however, “is several months away,” he said.
If the move occurs, it would further enhance Orange County’s reputation as a major center of the U.S. automotive world. The county already is home to the North American headquarters of five Japanese and Korean auto makers as well as three major Japanese motorcycle companies.
More than 100 automotive performance and appearance product manufacturers and the majority of the 19 major automotive design studios in Southern California also are based in the county.
In addition, the arrival of more auto makers’ offices would attract a number of companies that provide related services, such as advertising, said Steve Pisarik, senior vice president at the Seely Co., an Irvine-based commercial real estate brokerage.
“I think it would be a significant shot in the arm,” he added.
“If it comes to pass, we’d be delighted,” said Larry Thomas, a spokesman for the Irvine Co., which developed the Irvine Spectrum, where Lincoln Mercury is building its new headquarters. “I think any time a community can land a major corporate headquarters, it’s a great benefit.”
The European brands’ North American headquarters now occupy separate facilities in New Jersey. Together, they have about 700 employees.
Industry watchers say a move to Irvine makes sense.
As part of its Lincoln Mercury initiative, Ford is moving its Southern California design studio from Valencia to Irvine and designating it a luxury-brands studio. And Lincoln Mercury is building a permanent headquarters in Irvine for 800 employees--more than four times the current work force.
“It’s pretty obvious that something is going to be added,” said one Ford executive, who asked to remain unidentified.
“I believe we’ll see [Jaguar and Volvo] come here next year,” said James Hossack, an analyst with AutoPacific Inc. in Tustin.
Ford to Keep Luxury Brands Distinct
Lincoln Mercury has nearly wrapped up designs for a five-story tower and a two-story design center totaling about 200,000 square feet in Irvine. The offices, which are expected to be completed by 2002, will be next to the North American headquarters of Mazda Motor Corp., which Ford also controls. Lincoln Mercury currently leases an office building in a nearby section of the Spectrum.
Ford shocked the industry last year when it relocated Lincoln Mercury’s corporate headquarters to Southern California--marking the first time since World War II that an existing domestic brand had left Michigan.
Since then, Lincoln insiders have praised the move as one that has freed the division to make decisions and implement plans more quickly and with more imagination than had been possible operating in the shadow of the larger and more powerful Ford division in Dearborn.
Ford’s luxury brands were wrapped into a Premier Automotive Group in March, and the company hired Wolfgang Reitzle, the former second in command at Bayerische Motoren Werke of Germany, to head the unit.
Reitzle, who keeps the Premier Group’s worldwide management headquarters in London, then hired BMW of North America’s president, Victor Doolan, to head the group’s North American marketing efforts. Doolan, who had been in New Jersey with BMW, immediately relocated to Lincoln Mercury’s offices in Irvine.
Ford intends to keep the different luxury brands separate and distinct--each has its own audience, and there is little likelihood that Jaguar or Volvo fans could be turned into Lincoln fanciers. But the company is also cutting costs by sharing platforms: the basic design of a vehicle’s frame and running gear. The year-old Jaguar S-Type sedan and Lincoln’s new LS sedan share a platform, for example, and a shortened version of it will be used for the two-seat 2001 Ford Thunderbird. Ford also shares platforms with Japanese maker Mazda, and Volvo’s new S80 platform is expected to provide the basis for future vehicles in the Ford family.
Soren Johansson, a spokesman for Volvo Cars of North America Inc., said the move has been under review since early summer after being raised by Reitzle. In the event of a move, the staff has been told that those who cannot relocate “will be taken care of very well,” Johansson said.
Jim Hall, a Detroit-based analyst with AutoPacific, says he believes that the Premier Group’s worldwide headquarters will remain overseas--closer to the three European brands’ manufacturing, design and administrative operations. Relocating to Irvine would open up a nine-hour time gap and make communications difficult.
But there’s no reason, he says, that the group’s North American headquarters shouldn’t be in Irvine with the domestic luxury brands.
Separately on Monday, Lincoln Mercury spokesman Mattia said that although the Premier Group plans to concentrate its domestic muscle on building Lincoln, the weaker Mercury brand will survive.
Responding to persistent rumors that Mercury is on the way out, Mattia said that although there are no plans to add unique nameplates to the Mercury lineup, several existing lines will add models, including the Cougar and Grand Marquis. Mercury is also revising its Mountaineer sport-utility vehicle, a slightly upgraded version of the Ford Explorer.
While it will still be based on the Explorer platform, the 2001 Mountaineer will be “a very different” vehicle, he said. A concept version of the SUV will be unveiled next month at the Greater Los Angeles Auto Show.
Some industry insiders expect Mercury to add a convertible version of the Cougar sports coupe by 2003, as well as drop the Nissan-built Villager minivan by 2004 and replace it with an all-new “crossover” vehicle that would combine attributes of a sedan and a wagon or SUV.
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Times staff writer Daryl Strickland also contributed to this report.
