Aug. 25 (Bloomberg) -- Robert Rubin, chairman of Citigroup Inc.'s executive committee, resigned from Ford Motor Co.'s board of directors to avoid conflicts of interest while the bank advises the carmaker on possible sale of assets including its Jaguar and Land Rover brands.

Rubin, a former Treasury secretary who has served as an informal adviser to the Ford family on its investment in the third-biggest automaker, is stepping down as the company explores moves to reverse losses that totaled $1.44 billion in the first half of 2006.

Citigroup, the nation's biggest bank, is helping Ford review its options, said two people familiar with the bank who declined to be named because Ford hasn't disclosed its plans.

``Citigroup's multifaceted relationship with Ford could raise a question whether my relationship with Ford and Citigroup creates an appearance of conflict,'' Rubin, who joined the board in 2000, wrote yesterday in a letter to Ford Chairman William Clay Ford Jr. Rubin didn't disclose details of Citigroup's work for Dearborn, Michigan-based Ford in the letter.

``It's a big loss to have someone of Bob Rubin's talent leave the board,'' said John Casesa, managing partner at Casesa Strategic Advisors, a financial consultant in New York. ``He's one of the most experienced financial executives in the world.''

Nasser Talks

Ford is in talks to sell luxury car divisions to former Chief Executive Jacques Nasser, four people familiar with the discussions said. The talks focus on the Jaguar and Land Rover brands, one person said. Nasser is a partner at JPMorgan Chase & Co.'s One Equity Partners LLC, an investment firm where Rubin's son, Jamie, also works.

Ford spokesman Tom Hoyt declined to comment.

Nasser, fired by Ford five years ago, created the company's Premier Automotive Group, including European brands Jaguar, Land Rover and Volvo. As late as 2004, Ford was counting on the group to generate one-third of its automotive profit by 2006. Ford says Premier will lose money this year.

The talks with Nasser, which could result in a joint venture rather than an outright acquisition, don't involve Volvo, one of the people said. The people wouldn't say whether the discussions have advanced beyond a preliminary stage.

Rubin's seat on the board hasn't prevented Citigroup from working with Ford in past deals. The bank, along with Goldman Sachs Group Inc. and JPMorgan Chase, advised Ford on the $15 billion sale of its Hertz Corp. car-rental unit last year to a group of investors.

`Appearance of Conflict'

Citigroup ranks No. 1 among advisers on mergers involving automakers and their suppliers so far this year, with $20.2 billion to its credit, according to data compiled by Bloomberg. Last year it was seventh and Goldman was first, the data show.

``Citigroup has an investment-banking relationship with Ford and could play a role in helping us explore our options, and that could create the appearance of conflict,'' Ford spokesman Oscar Suris said. ``He's taken that off the table by resigning.''

Citigroup spokeswoman Shannon Bell declined to comment.

Former Citigroup Chairman Sanford Weill lured Rubin, 67, to the bank in 1999 to help direct strategy and advise senior executives and their clients. His decision to leave Ford's board comes four months after the automaker's bigger rival, General Motors Corp., agreed to sell a majority stake in its finance unit to a group of investors that included Citigroup. Citigroup also advised on the deal and helped finance it.

The strategic review now under way at Ford includes, among other things, taking the carmaker private, people familiar with the situation said. For now, the heirs of founder Henry Ford view ending 50 years of public ownership as a last resort, one of the people said.

Ghosn Partnership

The Fords' preferred move would be a partnership bringing Carlos Ghosn, chief executive of Nissan Motor Co. and Renault SA, into a leadership position in the company, said one of the people, who didn't want to be identified because the deliberations are confidential.

Last month, Bill Ford told Ghosn he would like to explore an alliance if Ghosn fails to team up with General Motors, according to people familiar with the conversation. Ghosn said he wouldn't talk to Ford before his discussions with GM conclude in mid-October, the people said.

Ford hired former Goldman executive Kenneth Leet as a strategic adviser earlier this month.

Casesa said he hoped that Rubin resigned to avoid the appearance of conflict as Citigroup seeks more business with Ford, and not because of divergent views among the company's directors about strategy.

``Right now, I just don't know the answer to that question,'' Casesa said.

Founding Family

Rubin is the most well-known non-executive member of the Ford board. Time Magazine put Rubin on its cover in 1999, along with former Federal Reserve Chairman Alan Greenspan and Larry Summers, another Clinton administration Treasury secretary, calling them the ``Committee to Save the World'' after they helped orchestrate bailouts of developing countries including Mexico in the 1990s.

Under an arrangement created when the company went public in 1956, Ford family members control 40 percent of shareholder votes through Class B shares that they've agreed to sell only to each other.

Shares of Dearborn, Michigan-based Ford rose 24 cents to $8 in composite trading on the New York Stock Exchange. The automaker's stock has tumbled 19 percent in the past year. Citigroup shares fell 8 cents to $48.64.

To contact the reporters on this story: Justin Baer in New York at jbaer1@bloomberg.net; Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net.

Last Updated: August 25, 2006 17:33 EDT