Tata, Ford to seal Jaguar, Land Rover deal on WednesdayMarch 24th, 2008 - 8:59 pm ICT by admin
(Lead, with fresh matter and quotes)
By Dipankar De Sarkar
London, March 24 (IANS) After months of fevered speculation and several postponements, Tata Motors is finally set to become the new owners of two of the world’s best-known luxury car models - Jaguar and Land Rover - on Wednesday, people familiar with the negotiations said Monday. Unlike most other companies in Britain, Jaguar gives its workers a day off both Monday and Tuesday during the long Easter break and this means the signing of the Memorandum of Understanding between Tata and sellers Ford - as well as the announcement - were on course for Wednesday, knowledgeable Ford sources told IANS.
“Ford doesn’t like to do anything without its workers fully involved,” said one source who did not like to be named.
The date was confirmed by a union official acting for Ford workers.
“We have been told that the MoU will be signed on Wednesday,” Andrew Dodgson of the influential workers’ union Unite, which represents Ford workers, told IANS.
The long-awaited signing will follow union agreement on three key issues and Tata’s success in raising a $3 bn-loan from Citigroup and J.P. Morgan Chase to finance the purchase.
According to Dodgson, Tata has agreed to retain the manufacturing base of the two marques in Britain and source the supply of engines and transmission from Britain.
On its part Ford, the American carmaker that owns the iconic British brands, has agreed to plug a “substantial” deficit in the workers’ pension fund.
“They have either put some money in or plan to do it,” Dodgson said.
Tata, whose offer is said to be in the region of $2 bn, has assured Ford that it has no plans to ‘Indianise’ Jaguar and Land Rover.
Group chairman Ratan Tata said recently the practise of moulding an acquired company to look and function more like its new parent is a “more Anglo-Saxon” phenomenon, with “an expectation that if you’re acquired, you will look like the owner.”
He seems to have soothed the nerves of British workers, with Dodgson saying, “We’re quite happy with what we have. After all kinds of rumours about job losses, the story is that that’s not going to happen.”
Scotching rumours of outsourcing, Tata is said to have assured Unite that it will keep all three of Jaguar and Land Rover’s British plants at Solihull and Castle Bromwich in the Midlands and Halewood on Merseyside.
While Unite represents some 12,000 Ford workers, Dodgson said the total number of jobs at stake could be anywhere between 35,000 and 40,000 when ancillaries are taken into account.
Ford acquired Jaguar for $2.5 bn in 1989 and Land Rover for $2.75 bn in 2000 but put them on the market last year after posting losses of $12.6 bn in 2006 - the heaviest in its 103-year history.
Tata was named by Ford as the preferred bidders after it beat off competition from fellow-Indian competitor Mahindra and Mahindra and an American buy-up specialist One Equity, headed by former Ford Chief Executive Jacques Nasser.
Jaguar said last month that it is “entirely relaxed” about a Tata takeover.
“We have shown Tata our new model lines and the planned product cycle. The two national cultures appear to fit together very well and Tata is being very respectful about what we are doing,” said Ian Callum, the director of design who is responsible for the new Jaguar XF and XK model ranges.
Tags: british brands, car models, carmaker, chairman ratan tata, citigroup, dodgson, ford workers, group chairman, j p morgan, j p morgan chase, london march, luxury car, memorandum of understanding, moulding, pension fund, postponements, rover group, sarkar, tata motors, workers union