JLR denies preference talks over UK aid

JLR denies preference talks over UK aid
S KALYANA RAMANATHAN / London January 29, 2009, 0:25 IST

The Tata group-owned Jaguar-Land Rover (JLR) has denied reports in the media that yesterday's £ 2.3-billion credit relief (as loan guarantee) announced by the UK government will benefit it more than rest of the automobile industry in the UK. Reports in the media that followed UK Business Secretary Peter Mandelson's announcement suggested that JLR and Vauxhaull Motors (a subsidiary of General Motors) would get more than 50 per cent of this fresh relief provided by the government.

Tony Woodley, joint general secretary, Unite (union), yesterday said, "£2 billion sounds like a lot of money, but at least half of this will be taken up by Vauxhaull and Jaguar-Land Rover alone, leaving little or nothing for the hundreds of component companies."

JLR’s position on the neutrality of providing loan guarantee to all UK auto makers was further reiterated by Paul Everitt, chief executive of SMMT (The Society of Motor Manufacturers and Traders), the industry body for UK's automobile companies. He said ownership of the car marker will not be a factor in providing the loan guarantee by the UK government.

A JLR spokesperson today said that these were speculations by the media and the relief package announced by the UK government was only loan guarantees. The spokesperson said that representations to the government made by the group were more as part of the UK automobile industry. According to SMMT, UK's apex automobile lobby, there are 27 cars and commercial vehicle manufacturers in the country, employing nearly 800,000 people with consolidated production of 1.75 million cars and trucks.

Apart from seeking assistance from the government to overcome the current recession, JLR has also put in place a voluntary redundancy programme. Over the last six months, as many as 2,000 job had been removed and an additional 450 jobs are expected to be axed in the next few months. Of these 450, 300 would be managers in JLR and another 150 from the agency supports or contractors.

In calendar 2008, Land Rover had witnessed a 17 per cent fall in sales while Jaguar improved its sales by 8 per cent during the same period, according the group's representative in the UK.