Press Report : Shock at claims JLR’s Halewood plant may close

Vicki Kellaway, Liverpool Daily Post, 13th July, 2009

Jaguar Land Rover last night refused to be drawn on suggestions it could close its Halewood plant to save its other UK factories. A senior official was quoted this weekend claiming the firm was running out of options and may close its Merseyside plant. He is said to have hinted “a major plant closure” could be the only move left for the struggling firm’s Indian owners Tata Motors. The closure would cost 2,000 Merseyside workers their jobs.

The claim comes as the Government continues to stall on a credit guarantee deal which would allow the firm to receive a £340m European loan. The Government is being asked to underwrite the loan in case the company should go bust but it has stalled on guaranteeing the money amid arguments over how JLR should be run.

Now a senior Tata employee has reportedly warned that time is running out, particulary for Halewood. The unnamed offical said: “We’re approaching crunch time. The Government doesn’t seem to care. Ministers are sitting on their hands doing nothing. So there is a sense in India that a major plant closure could be the only option left.”

It is believed Halewood would face the axe in a bid to save the firm’s other two factories – the Jaguar plant in Castle Bromwich, Birmingham and the Land Rover factory in Solihull. Tata Motors announced losses of £267m last year compared to a previous annual profit of £388m.

However, claims it could close Halewood to help bridge the gap were were met with silence by both JLR’s official spokesman and union leaders. A company spokeswoman said: “We do not comment on speculation.”

Tony Woodley, transport union Unite’s General Secretary, said he had heard nothing of the claims. Mr Woodley, who was born on Merseyside, led the campaign to save the plant when it was at risk of closure in the 1990s. He said he wouldn’t comment on claims about the factory’s future unless he knew their source.

It is possible the senior official’s “leak” was a deliberate attempt to force the Government into action. Tata has already secured a £340m loan from the European Investment Bank (EIB) to part finance its development of new eco-friendly cars but the company is still waiting for the Government to underwrite the money and relations have reportedly soured in recent months.

It is possible the senior official’s “leak” was a deliberate attempt to force the Government into action. Tata has already secured a £340m loan from the European Investment Bank (EIB) to part finance its development of new eco-friendly cars but the company is still waiting for the Government to underwrite the money and relations have reportedly soured in recent months.

Ministers are said to have tried to impose tough conditions on the firm in return for guaranteeing its loan. That includes demanding Tata put more money into JLR, on top of the £900m it has already committed after taking over the firm from Ford last year.

Ministers are also said to want the right to exert high level management control at JLR, including the right to choose a chairman and sit on the board. The Government also reportedly demanded the right to veto any redundancies.

If Tata did close Halewood it would be embarrassing for Business Secretary Lord Peter Mandelson ahead of a General Election, which must be held within the next year. He previously praised the company for its “very strong” record of investing in new, green technologies.

In January, he said the Government would meet bosses to discuss “what appropriate help and interventions we can provide”. However, four months later came the revelations of the Government’s tough conditions for such action.

Howard Wheeldon, Senior Strategist at BGC Brokers, in London, called ministers’ demands “a disgrace” at the time. He said: “It’s tantamount to throwing the best of the best of the highly valuable British luxury car industry and export potential into a den of wolves.”

JLR recently unveiled the latest version of its Jaguar XJ in the hope the new flagship vehicle will revive its struggling sales but the company is similarly thought to be drawing up other contingency plans including extended closures over the summer and another round of job cuts.

[Source: Liverpool Daily 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.

Have your say...