Press Report : PM talks to Tata in bid to end stand-off with Government

Jonathan Walker, Birmingham Post, 1st July, 2009

Gordon Brown has held direct talks with the Indian owners of Jaguar Land Rover, in a bid to end the deadlock over Government support for the struggling carmaker. The Prime Minister took the highly unusual step of personally intervening, following a series of dire warnings about JLR’s future. Mr Brown revealed he spoke to Ratan Tata, Chairman of JLR owners Tata Group, to assure him that the Government wanted to help.

Union leaders have warned that JLR, which employs thousands of people in Castle Bromwich and Solihull, is set to axe vital research and development projects if it is unable to borrow money. Ravi Kant, Tata Vice-Chairman, warned last month that JLR could face more job cuts and plant shutdowns after piling up huge losses of £281 million in just ten months.

However, speaking to regional newspapers in Downing Street, Mr Brown revealed that he had spoken by telephone to Mr Tata, Chairman of the global company that took over JLR last year. He said: “I talked to Mr Tata a few days ago. I assured him of our willingness to help Jaguar and Land Rover make the investments that they want to make.

“We have been in correspondence with them (Tata) on proposals we have made to the company, and their response to these proposals. And we are determined to work with Jaguar to make sure we have a strong and dynamic and high technology car industry in this country. So, talks will continue with Jaguar.”

We have been in correspondence with them (Tata) on proposals we have made to the company, and their response to these proposals. And we are determined to work with Jaguar to make sure we have a strong and dynamic and high technology car industry in this country. So, talks will continue with Jaguar.” Prime Minister Gordon Brown

The pair also discussed the future of Corus Group, the business previously known as British Steel, which Tata bought in 2007. Corus has axed 160 jobs in the Black Country over the past year.

The Department for Business and Tata have been locked in a furious row for months over the conditions that will attach to state aid for the business. In April, Ministers offered JLR guarantees allowing it borrow £340 million from the European bank but they also imposed stringent conditions, such as the right to choose the firm’s chairman and have a seat on the board – which Tata immediately rejected. Talks have continued since then, but there has been little sign of progress.

The Department for Business, Innovation and Skills refused to provide details of the discussions, saying they were commercially confidential. A spokeswoman said: “We have made it clear we are willing to help, because Jaguar Land Rover is a viable company with good, long-term prospects.” A JLR spokesman said: “Talks are continuing. We do feel there has been progress, but we always knew there would be complex issues that will take time to complete.”

Mr Brown also defended the Government’s record over LDV, the Birmingham van maker which has gone into administration with the loss of more than 800 jobs at its Washwood Heath plant. He said: “To be fair about LDV, we tried to help LDV with £4 million to help it look at whether it had a business plan which was feasible for the future. We are continuing major capital investment in the region through the downturn. That includes roads and infrastructure, it also includes hospitals and schools.”

[Source: Birmingham Post]

Clive Goldthorp

About the Author:

Clive claims that his interest in the BMC>MG story dates back to his childhood in the 1960s when the family’s garage premises were leased to a tenant with an Austin agency. However, back in the 1920s and 1930s, his grandmother was one of the country’s first female Garage Proprietors so cars probably run in his genes! Admits to affairs with Alfa Romeos, but has more recently owned an 06/06 MG TF 135 and then a 15/64 MG3 Style… Clive, who was AROnline’s News Editor for nearly four years, stood down from that role in order to devote more time to various Motor Racing projects but still contributes articles on as regular basis as his other commitments permit.

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