TATA’s Jaguar Land-Rover to get 270 m pound European bank loanApril 6th, 2009 - 1:26 pm ICT by ANI
London, Apr.6 (ANI): The TATA-owned struggling motor group Jaguar Land-Rover looks to set to receive a European bailout package of 270 million pounds to safeguard as many as 14,500 jobs in the UK.
JLR has been one of the victims of a 22 per cent drop in UK car sales over the last year.
The loan deal, which has been agreed with the European Investment Bank (EIB), a development bank, will see the company get 270 million pound in funding.
According to The Independent, confirmation of the deal is expected tomorrow when the EIB’s board meets in Luxembourg.
The bank is also expected to agree a package for Nissan’s plant in Sunderland, which will receive part of a 364 million pound loan that will be split between the Japanese company’s sites in the North-east and Spain.
Both payments will need a government guarantee and will require that JLR and Nissan to commit to greater investment in sustainable technology.
JLR has been asking for help from the Government since before Christmas. However, despite Lord Mandelson, the Business secretary, putting aside 2.3 billion pounds in support for the ailing UK car industry, talks between JLR and ministers have foundered.
Tata stresses that it is asking for a loan guarantee from the Government, rather than cash, but the use of UK taxpayers’ money to prop up a foreign-owned business would be politically problematic for Labour.
A Government spokesman refused to comment on the agreement with the EIB, but it is understood that the company has had to meet a number of criteria in order to qualify for the loan.
The deal with the EIB will come as a relief to JLR’s UK workforce, which is spread across sites in the West Midlands and Merseyside.
The company cut 450 jobs in January, and the remaining workers have been put on a 35-hour working week after an agreement with trade unions.
Car production in the UK has dropped 59 per cent in the last year, as manufacturers seek to clear stock rather than manufacture new cars. (ANI)
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Tags: bailout package, bank loan, car industry, car production, european investment bank, government guarantee, government spokesman, independent confirmation, japanese company, jlr, loan deal, loan guarantee, mandelson, motor group, s board, sustainable technology, trade unions, uk car sales, uk taxpayers, uk workforce