JLR: Lord Kumar Bhattacharyya backs Tata
As the dust settles on this week’s lending deal to safeguard Jaguar Land Rover, Lord Kumar Bhattacharyya, head of Warwick Manufacturing Group, looks at what the future may bring for the company.
Tata has again proved that it is the right custodian for Jaguar Land Rover.
I applaud their move to agree a £175 million banking deal on working capital, coupled with £340 million from the European Investment Bank to develop a new generation of low-emission cars.
Tata is the largest manufacturing employer in the UK and believes in the UK. JLR is an icon and this will secure many jobs both directly and in the wider supplier base.
There has been much speculation around Tata’s purchase of JLR, both within and outside the organisation. There have been many sceptics.
Some questioned the call for loan guarantees from the Government, arguing it was up to Tata to look after JLR.
But it was not Tata’s fault that the banks lent too much and we ended up in the credit crunch. Until then JLR had been driving forward.
Subsequently Tata poured £1 billion into JLR to keep it afloat, yet it was still bleeding.
It was surely not unreasonable in such a crisis that the Government should be asked for help especially as all the other major car-making countries were giving it freely.
So how come the need has gone away?
There was much fanfare when the Government announced it was making £2.3 billion available to the UK car sector, but, as one pundit put it, it was on such onerous terms that nobody could afford to access the money.
Negotiations dragged on.
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