Ford is in early talks with Jac Nasser, its former chief executive, about selling luxury brands including Jaguar and Land Rover to a private equity arm of JP Morgan, where he now works.
According to one person familiar with the situation, Ford and One Equity Partners have been discussing various possibilities for more than a month, although no firm decision has yet been made on what to sell. Mr Nasser is senior partner for mergers and acquisitions at One Equity. The revelation of the talks coincided with the resignation of Robert Rubin, the former US Treasury secretary, from the board of Ford.
Mr Rubin said his position as chairman of the executive committee of Citigroup could lead to the appearance of a conflict of interest as Ford "undertakes its upcoming review of strategic options". He said Citigroup "currently" has no conflict, although bankers there, as elsewhere, are understood to be looking closely at the possible deals around Ford's luxury brands.
Mr Nasser's discussions are likely to prompt a flurry of interest from other private equity groups in buying Jaguar and Land Rover, the UK premium brands widely seen as the most likely to be sold. One senior automotive specialist at another large private equity group said funds would definitely be examining the possibilities.
Other brands that could feature include fellow members of Ford's London-based Premier Automotive Group, Aston Martin and Volvo; and US luxury brand Lincoln. Most observers expect Volvo - long wanted by French rival Renault - to be retained.
Ford refused to comment. But in an interview with Business Week Bill Ford, chairman and chief executive of Ford, said he was "open to all options" and "looking at radical changes" following losses of $1.4bn (about €1.1bn) in the first half of this year. The potential sale is part of Ford's effort to focus on its crisis-hit US business, which is preparing its second restructuring this year and planning to cut production by 21 per cent to 14-year lows in the fourth quarter.
Ford has been widely expected to ditch its stalled Jaguar operation - which lost £426m (some €630m) in 2004, according to the latest set of accounts available - since it appointed Kenneth Leet, a former Goldman Sachs banker, as a strategic adviser earlier this month.
The only other declared interest so far came last week from Sir Anthony Bamford, chairman of construction equipment manufacturer JCB, who said he would like to buy Jaguar. Other potential buyers floated by investment bankers include South Korea's Hyundai - which has denied interest - and Renault and PSA Peugeot Citroën in France.