Tata in Talks with British Government for JLR Bailout

Friday 19 December 2008, 00:00 AM by Satish

The British Business Secretary, Lord Mandelson, has confirmed that the British government is in talks with Jaguar Land Rover owners, Tata, over a possibility of state aid to the company. He stated that no decision has been taken as yet and there is no “open cheque book” either for the private companies.

There was no comment from the company regarding the talks with the British government. Tata had acquired Jaguar Land Rover earlier this year for $2.6 billion. The company has already trimmed output at three of its main manufacturing sites in the UK.

Lord Mandelson stated that the government is in talks because the JLR owners argue that they are under particular strain. "If we judge that it's not just short-term difficulties, but longer-term pressures that are operating in that sector or in relation to that particular company, then we will consider what measure — what intervention — we can appropriately make," Mandelson told Sky News television.

He also stated that it was not the government’s responsibility but the responsibility of the Indian owners – Tata Motors Ltd. to provide the necessary cash to keep its subsidiaries alive. Jaguar Land Rover employs about 15,000 employees around Britain. It has already laid off 850 IT and engineering staff because of “severe” global car market conditions.