Jaguar Land Rover doesn't want bail-out, just a simple loan

Mar 19 2009 by Jonathan Walker, Birmingham Post

BMW chairman Norbert Reithofer raises valid concerns in his comments about government “bail-outs” in the automotive sector.

He insisted that businesses must retain their independence from government, and warned that support for failing companies undermined those that are profitable, and capable of supporting jobs in the long-run.

Pleas for government aid have come from car-makers across the world, not least in the US.

But if his words were intended to apply to businesses such as Jaguar Land Rover in the West Midlands, they missed the mark.

The British Government has made it very clear that it has no intention of interfering in the independence of automotive manufacturers in this country. This was one of the points Gordon Brown made in his interview with the Birmingham Post in January.

There have been calls for the Government to buy a stake in car-makers and to insist on a seat on the board, in return for funding.

But the Prime Minister could not have been clearer in saying this would not happen.

The Treasury has insisted on inspecting the finances of businesses applying for aid, but this does not mean their independence is threatened. It’s to ensure taxpayers’ money is not loaned to firms which are unable to pay it back.

And the funding Jaguar Land Rover is looking for is not a bail-out, but loans or loan guarantees to be paid back in the normal way, as substitutes for credit banks would usually provide.

The business does not need a bail-out. It continues to be a successful car-maker and one which ministers seem to appreciate could play a key role in driving Britain’s prosperity and ensuring new “green” technology plays a key role in our economy.