Press Report : JLR warned to stop complaining over rescue terms
Alun Thorne, Birmingham Post, 8th May, 2009
Ministers have issued a blunt warning to Jaguar Land Rover owners Tata Motors to stop complaining about the terms of a deal to rescue the carmaker.
Business Minister Ian Pearson said negotiations should be conducted professionally – and behind closed doors. Speaking in the House of Commons, he warned that going public with the business’ concerns would not be “helpful” to the company.
But Mr Pearson (Lab, Dudley South) insisted talks with Jaguar Land Rover were continuing, and the Government was committed to helping the business survive the recession. He was speaking following reports that negotiations between the carmaker, which has plants in Castle Bromwich and Solihull, will reject the Government’s terms for guaranteeing a loan from the European Investment Bank.
The Department for Business, Enterprise and Regulatory Reform delivered its final offer last Friday. It is demanding a seat on the Jaguar Land Rover board, the right to appoint a chairman and guarantees that Tata, the Indian business which owns Jaguar Land Rover, will invest hundreds of millions in the company. In return, it is prepared to guarantee a loan of only £175 million, half what JLR has asked for.
The Government regards JLR as a viable company with good long-term prospects. We want to see JLR through difficult trading times and to provide stability for the company and its employees.” Ian Pearson MP, Business Minister.
Mr Pearson told MPs that Tata had denied the reports, although a statement denying it has actually been issued by Jaguar Land Rover, not the parent company. He said: “The Government regards JLR as a viable company with good long-term prospects. We want to see JLR through difficult trading times and to provide stability for the company and its employees. That’s why we have been having confidential discussions with JLR and its parent company over both the short and long-term financing and its business plans, and these negotiations are on-going.
“I have to say that I believe it’s very important that these discussions are handled in a professional way and face-to-face, rather than through the media, which I don’t think is helpful to the company. We haven’t had any response as of yet to the proposal that we put to JLR last Friday but we would obviously welcome a response and continue to have discussions with them.”
The issue was raised in the Commons by Bromsgrove MP Julie Kirkbride (Con), who said the firm was vitally important to the West Midlands’ economy.
[Source: Birmingham Post]