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Jaguar team, Cosworth engines for sale

9/17/2004

LONDON -- Jaguar will pull out of Formula
One at the end of 2004, with parent company Ford's engine maker
Cosworth also up for sale.

Ford's bombshell announcement Friday has huge
ramifications for the glamour sport, already facing an uncertain
future with carmakers threatening to establish a rival
championship. Cosworth also supplies engines to the struggling
Jordan and Minardi teams.

"We (Ford) are withdrawing from Formula One at the end of
the season," Ford vice president Richard Parry-Jones told
Reuters in a telephone interview.

Parry-Jones, in charge of Ford's F1 program, said the U.S.
car giant could no longer make a compelling business case for
any of its brands to compete in Formula One and had taken the
"difficult decision" to quit.

Ford earlier announced a reorganization of its loss-making
Jaguar car division, with plans to cut 1,150 jobs from its main
plant in Coventry, England.

One of the most evocative names in motorsport but better
known as a Le Mans sportscar marque, Jaguar entered Formula One
in 2000 after Ford took over the Stewart team founded by three-time world champion Jackie Stewart.

It has yet to win a grand prix, however, and has gone through
numerous changes of leadership since Stewart stood down as the
team principal before the start of the 2000 season.

Parry-Jones said Jaguar could not compete dollar-for-dollar
with German rivals BMW and Mercedes, partners to Williams and
McLaren, and it was not in Jaguar's long-term interests to be at
the back end of the grid.

World champion Ferrari, the team of Germany's
all-conquering Michael Schumacher, and new arrivals Toyota have
estimated budgets in excess of $200 million a year.

"Our focus now is on finishing the 2004 season and securing
the future of the F1 business under new ownership," Parry-Jones said,
adding that there were a number of interested parties.

He could not guarantee a sale would go ahead. "If it does
not, we would be forced to face a closure scenario, but we're not
thinking about that at the moment," he said.

"I think both Jaguar Racing and Cosworth are both very
attractive," Parry-Jones said.

"The Formula One team is very lean and efficient. For those
who do want to get into F1, there is no better opportunity than
a blue chip team like this."

Parry-Jones would not comment on the future of Ford's world
rally championship team or involvement in other branches of
motorsport worldwide.

He said the sport, where most of the revenues go to
commercial rights holding company SLEC set up by Formula One
supremo Bernie Ecclestone, had simply become too costly.

"It is so expensive to be successful in Formula One," he
said. "The money the sport generates is not distributed
equitably to the various stakeholders."

Parry-Jones said progress on a fairer share-out had been too
slow and Ford's decision was irrevocable, even if Ecclestone
were to offer more of the revenues.

"This is a clear decision," he said. "The opportunity for
that to happen is behind us."

Ecclestone said Jaguar did not have the financial clout to be a major Formula One player and they should have quit last year.

"It was inevitable and wasn't really a shock to me,"
Ecclestone told Reuters. "They couldn't really afford to be
running around at the back of the grid with the likes of
Jordan."

Parry-Jones said he had spoken to Jordan and Minardi,
reassuring them that this year's engine contracts would be
respected.

This year, the Milton Keynes-based Jaguar team has operated
on a tight budget, bringing in much-needed funds by signing Red
Bull-backed Austrian rookie Christian Klien to partner
Australian Mark Webber.

The team is seventh in the 10-team championship, a point ahead
of Toyota, with three races remaining.

Ford's involvement in Formula One spans decades. Its
engines powered Lotus to the 1968 constructors' championship and
subsequently won titles with teams such as Matra, Tyrrell,
McLaren and Williams.

Ford has won 176 races since 1967 as an engine provider.