Personal Connections Help Ford and Tata Seal Their Deal to Transfer Jaguar, Land Rover

(NewsVisual, powered by IntellectSpace) -- As part of its restructuring effort in order to return the company to profitability, the Ford Motor Co (NYSE: F) announced on Wednesday that it will sell its Jaguar Land Rover operations to Tata Motors Ltd, a family-controlled auto company based in India.

The total amount to be paid in cash by Tata Motors for Jaguar Land Rover upon closing will be approximately US $2.3 billion, Ford said in its statement.

In addition, the company reported that it will contribute up to approximately US $600 million to the Jaguar Land Rover pension plans.

"Jaguar and Land Rover are terrific brands," said Ford CEO/President Alan Mulally.  "We are confident that they are leaving our fold with the products, plan and team to continue to thrive under Tata’s stewardship.”

Mr Mulally then sought to inform investors that the company has a strategic plan in place to ensure its future profits:

“Now, it is time for Ford to concentrate on integrating the Ford brand globally, as we implement our plan to create a strong Ford Motor Company that delivers profitable growth for all."

Whatever Ford’s future turns out to be, it’s clear that this was a crucial deal for the company, and the personal connections between the two companies could have been a critical component in facilitating its completion.

NewsVisual created an IntellectSpace Knowledge Map that shows three main axes of connections among the members of the Boards of Directors of the Ford and Tata that could have been the impetus behind the negotiations.

The strongest axis of board room connections between them, however, runs through England’s Royal Academy of Engineering:

This institution connects the Ford Director Alan Mulally to Tata Directors Jamshed Irani and R A Mashelkar, since all three are members or fellows of the Royal Academy of Engineering.

Consequently, it would be highly improbably for these three Directors not to be well acquainted with each other, especially given their service on the boards of auto companies.

Moreover, this seems like the most likely connection from which any negotiations could have started.

The Knowledge Map shows that a second axis of likely personal connections lies through Harvard University:

Tata Motors Chairman Ratan N Tata holds an MBA degree from Harvard University in 1975.  Consequently, Tata could possibly know Ford Director Edsel B Ford II, who completed the Harvard Management program in 1981.  Or Tata could potentially know also Ford Director Ellen R Marram, who also earned an MBA degree from Harvard University in 1970.

The third axis of personal connections that the Map illustrates is through the NYSE Euronext Inc:

Specifically, Chairman Tata could also be acquainted with Ford Director Joma Ollila, who also happens to be the Chairman of Nokia Corp, Finland, via the International Advisory Committee to the NYSE Euronext Inc on which they both serve as members.

Although the Knowledge Map cannot offer proof positive that these connections spawned the talks for a deal, it does at least seem probable that the personal connections it points to could have served some role.

Click here for a fuller and interactive version of this IntellectSpace Knowledge Map.

(Note: the information contained and presented in Knowledge Maps is public information from the Securities and Exchange Commission of the United States of America).