JLR faces rough bailout ride in UK

British govt doesn’t have an open cheque-book, says Business Secretary.

The UK government may not accept the Tata Motor’ plea for a bailout for ailing luxury car maker Jaguar Land Rover in a hurry.

The government does not have an ''open cheque-book’’ for ailing companies and it was the Tata group’s ''first responsibility’’ to ensure the survival of the JLR, UK Business Secretary Peter Mandelson told British broadcaster SKY News.

“They (JLR) have owners who are well-resourced, who have the first responsibility for sustaining the companies that they own in existence and in production for the future,” Mandelson said.

Responding to a question on whether Tata-owned JLR was in talks with the UK government for a bailout package, Mandelson said it was too early to judge whether the state would be willing to help Jaguar Land Rover, which employs around 15,000 workers.

The Tatas, earlier this year, bought Jaguar Land Rover from American car maker Ford for about 1.6 billion pounds.

“I’m talking to the car manufacturers. We are analysing very carefully what is going on in the sector and we will make good judgements in good time.

“We are looking at the sector as a whole. I have had discussions with the owners and management of Jaguar Land Rover in particular, because they argue that they are under particular strain,” Mandelson said.

Mandelson also noted that the impact the company’s failure would have on jobs in the supply chain as well as its own workforce would be taken into account.

The company announced last month that it was laying off around 850 IT and engineering staff in response to severe global car market conditions, the report added. Recently, the Sunday Times had reported that Jaguar Land Rover is in secret talks with the government for a one billion-pound loan.

In a separate report, the Daily Mail said that Jaguar Land Rover is in line for a “taxpayer-funded bail out worth up to one billion pound.

“Its executives have been locked in secret talks with ministers discussing a rescue package for the Indian-owned firm... Such a decision would create a politically explosive precedent,” the daily said in a report published online today.

Quoting sources at Jaguar Land Rover, the report said that Mandelson is sympathetic to their case.

“Help for Jaguar Land Rover is most likely to come in the form of the taxpayer underwriting its loans,” the daily added.

“It is understood to be seeking access to one billion pound over two years roughly what Indian parent company Tata paid when it bought the company from Ford earlier this year,” the report noted.

According to the Daily Mail, the potential bailout for Jaguar Land Rover follows increasing speculation that the government is ready to follow America’s style and consider giving loans to motor giants.