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Jaguar and Land Rover bailout talks close to breakdown

 
4 4,562 views May 7, 2009

Jaguar has had to cut production several times in the past months as sales plummet

Jaguar has had to cut production several times in the past months as sales plummet

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Although most of the news of late tends to focus on GM and Chrysler, these Detroit-based carmakers are not the only companies trying to gain vital government support in order to stay propped up in the current economic climate. While there's no doubt the global financial crisis has affected the U.S. more than it has Europe, Britain’s Jaguar and Land Rover are also seeking government loans to help them remain viable.

However, unlike their U.S. counterparts, the talks between Jaguar and Land Rover and the British government are winding down, with no bailout deal in sight yet. Although the loans are fairly small compared to those dished out to Detroit, at the end of the day Jaguar and Land Rover was still hoping to win a hefty $265 million.

While the British government was willing to part with the money to help Jaguar and Land Rover maintain their British operations, the companies’ Indian owner Tata stated that the government's demands were too onerous to consider taking the loan, reports the Associated Press.

Reportedly, these demands included giving the British government first choice in who would be the company's chairman, as well as other rights that may interfere with how Tata wishes to run the company. In justifying their demands, the British government stated that it was willing to help Jaguar and Land Rover, but that certain terms had to be adhered to in order to protect taxpayers' money.

It’s now expected that Tata will turn down this deal and possibly seek financial support elsewhere.

Incidentally, Jaguar and Land Rover have already received assistance from the British government. The companies have already received significant help with its hybrid and electric technology research from Britain's Technology Strategy Board. No solid projects have emerged from that funding, though the companies are working on both diesel-hybrid technology that is thought to be aimed primarily at Land Rover’s lineup, and a luxury sedan implementation for Jaguar.



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Comments (4)

  1. ma_Edward avatar Edward Posted: 10/11/2008 6:02am PDT

    Where is Tata and his deep pockets? 19% drop in sales? Oops! sounds like Tata isn't willing to put up a single cent more than necessary. Then why doesn't he just let the UK gov't take over Jaguar and set up a new British Leyland. State money and private management with worker participation in profits would be be the best way to get Jaguar going again.
     
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  2. ma_www.mywheelsonwalls.com avatar www.mywheelsonwalls.com Posted: 11/24/2008 9:26am PST

    Bollocks Edward!!!

    Did you ever drive a BL car? If you didnt I'll let you in on a secret THEY WERE A COMPLETE LOAD OF CRAP!!!!!! Some highlights from my childhood were a Dolomite, Meastro [sic], Princess, Spritfire, MG Metro Turbo, and the worst car ever a silver Allegro complete with a multi shade of orange stripe down the side, a special edition I''l have you know.

    I remember at one point in the seventies due to some very poor management decisions you could only get your Jaguar in three colors, yes thats three. Another memorable achievement was the four year development time of XJ40 which on the calendar you and I use was infact eight years!!!

    You'll find that Jaguar has never been better and what is coming down the pipe will really get your attention
     
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  3. ma_Edward avatar Edward Posted: 11/27/2008 2:24pm PST

    Soory Sir mywheels,,,, I was referring to the concept of a state supported manufacturing group. Yes the BL of the 70's was garbage, but the idea of state intervention in tough times is attractive. And if you notice I said with worker participation in profits. That way the employess will be motivated to produce good products. Whereas in the 70's it was employee discontent that sent quality down the tubes.
     
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  4. ma_tlake avatar tlake Posted: 11/27/2008 2:30pm PST

    Then why doesn't he just let the UK gov't take over Jaguar and set up a new British Leyland.

    That would be cool, I could finally get parts again for my Triumph TR7, or buy a new TR7...now I'm too excited.:D
     
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