The government stands accused of attempting to nationalise Jaguar Land Rover ‘through the back door’ as talks over bail-out funds appear to be foundering.
In exchange for guaranteeing loans of £175m from the European Investment Bank, the Labour government is reported to be demanding the right to appoint its own chairman to the company, plus one additional director, as well the right to veto any future redundancies among JLR’s 15,000 strong workforce.
The loan guarantee on offer is only half the amount approved by the European Bank, and according to the Financial Times the loan period of just six months - as opposed to the three years requested by JLR’s Indian owner Tata Motors - would incur interest charges of 15 percent.
JLR has been seeking government assistance of more than £500m, and is apparently considering rejecting the government’s ‘final offer’ proposal, the terms of which it considers unreasonably onerous and a form of 'backdoor nationalisation'.
If the loan package does not go ahead, it could have serious implications for JLR’s investment in new models, and particularly in new technology areas to help reduce emissions from future Jaguar and Land Rover vehicles, say analysts.