Are You an Ugly American?

The great thing about globalization is that you no longer have to travel abroad to be an Ugly American. In fact, a car dealer in Florida, simply by musing about a prospective corporate transaction, can typify precisely what a lot of the world sees as being problematic about this great nation of ours.

The back story: Jaguar, the storied British luxury car brand, has been part of the Ford family since a $2.5 billion acquisition in 1989. But Ford is having a tough time making money producing Jaguars—or anything else. So, it is selling off its high-end niche brands. In March, Ford sold Aston-Martin to a group of investors. Earlier this year, it put Jaguar and Land Rover on the market. Given the difficulties General Motors and Chrysler are having—not to mention this summer's transatlantic credit meltdown—not too many American or British buyers have surfaced. But others have, including Tata Motors, a part of the Tata Group, an enormously successful and sophisticated Indian company. Last year, Tata's firms had revenues of $28.8 billion, a market capitalization of $73.6 billion and employed 289,500 people. The members of Tata Group include giants like Tata Steel and outsourcer Tata Consultancy Services.

The prospect of Tata owning Jaguar didn't sit well with Ken Gorin, president of The Collection, a luxury-car retailer in the Miami area and chairman of the Jaguar Business Operations Council, a group of Jaguar dealers. He told the Wall Street Journal earlier this month that selling Jaguar to Tata—or to Mahindra & Mahindra, another Indian firm that had been mentioned as a bidder—would present "unique image issues." "I don't believe the U.S. public is ready for ownership out of India," he told the Journal. "I believe it would severely throw a tremendous cast of doubt over the viability of the brand." Further: Mr. Gorin said he wasn't judging the management capabilities of Tata or Mahindra. "My concern is perception [in the marketplace], and perception is reality," he said. "It's about saying there are unique image issues with two of the bidders that the other one doesn't have."

He added that his concerns wouldn't be relevant if the car brand being sold was mass-market. "We're a luxury brand. ... There are a number of subjective items that create the luster of a brand," Mr. Gorin said. "I don't mean to be negative towards anyone. I don't think we could have a Chinese-owned Jaguar" either, he said.

It may be that the prospect of Indian ownership of Jaguar will turn people away from Gorin's showroom. (I guess when people show up, he doesn't offer them Tetley Tea. After all, it's been owned by Tata Tea since 2000.) And Gorin is clearly not alone in believing Indian ownership will taint a luxury brand. This month, luxury hotel chain Orient-Express Hotels responded to the news that Indian Hotels Co. (also part of the Tata Group) had taken a significant stake in the company by telling it to shove off. "We believe any association of our luxury brands and properties with your brands and properties would result in a reduction in the value of our brands and of our business."

Never mind the implicit prejudice or the potential for brands to be sullied when their representatives behave like neocolonial jerks. If Jaguar could retain an upscale image after 18 years of being associated with the manufacturer of the Ford Taurus, it's pretty well impervious to debasement. And if Indian brands are such poison to luxury properties, how does the Trump Taj Mahal manage to survive? But such attitudes are increasingly economically untenable at this particular moment of financial history. For two massive trends are conspiring to place ownership of U.S. brands and British brands Americans like into the hands of foreigners.