Time for Government to stop haggling over JLR loan

Jun 29 2009 Post Comment, Birmingham Post

What can there be left to say? Months of discussion, thousands of words written, and as many people’s jobs at risk.

And still the Government has a mystifyingly hostile approach to Jaguar Land Rover and the automotive sector.

While Ravi Kant talks about the jobs that may have to go and the plants that may have to close, the £2.3bn Automotive Assistance Programme sits unused. While JLR announced desperate losses, the Government continues to pedantically haggle on the fine print of a European loan that should have been delivered months ago.

Just what is going on?

Surely the Government knows Tata has the desire, but not the ability to put up the money JLR needs to survive?

Ultimately, only one explanation makes sense – that the Government, trying to claw back the reputation lost by shovelling money at the failing banks, is trying to look tough – thinking that by letting JLR go to the wall, they’d be saying “look at us – we’re tough, we’re prudent”. (And how much they’d love to bring back “prudence” into the political lexicon?)

It’s not true.

While some may want to cast this, for political reasons, as a foreign-owned dinosaur begging for state-owned shelter as the comets start coming down, it just isn’t the case. And the only way to combat this impression is by constantly re-stating the situation as it is.

Let’s make it perfectly clear.

JLR doesn’t want – or need – a handout, it needs a commercially viable loan. It doesn’t need that loan from the Government – it’s already got one, one that just needs guaranteeing in part by the Government.

It doesn’t need this money to pump out unwanted cars, or quieten over-unionised workers, or replace support from its owners – as the Government would like everyone to believe.

This is money for research and development. The Government is very keen on new technology, and new industries – where do they think it comes from?

If things continue like this, we are going to see one of the UK’s most historic – and potentially most successful – companies sacrificed on the altar so the Government can make a point, a point it was only too happy to ignore when it came to bailing out the banks.

The back-and-forth between Tata and the Government has been classic brinkmanship.

Well, JLR, the livelihoods of thousands of employees, and what could be the future of British industry, is on the brink here. What are they going to do about it?