Jaguar and Land Rover bailout talks close to breakdown


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

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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