RE: Jaguar 'Nationalisation' Plan Revealed
Thursday 7th May 2009
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.
Jaguar 'Nationalisation' Plan Revealed
Bail-out proposals show government seeks control of JLR group
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.
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.
Discussion
Everything about this govt has been "back door".
They didn't take good care of our economy when they got hold of it in good health, what makes them think they can do any better with Jaguar that's arguably looking the best it has done in decades?
Edit: Spooling
They didn't take good care of our economy when they got hold of it in good health, what makes them think they can do any better with Jaguar that's arguably looking the best it has done in decades?
Edit: Spooling
Edited by Fetchez la vache on Thursday 7th May 09:10
The whole JLR thing has become a joke. Everybody is to blame...
Except us here on PH of course
Not sure if it would be any good for JLR though ??
Except us here on PH of course
Targarama said:
Do you think Tata gives a toss whether he keeps the UK factories open in future?
Ermm No. What's more with his wealth & analysts available to him he should have seen the downturn coming & financed accordingly. Would serve him right if UK Gov did acquire it.Not sure if it would be any good for JLR though ??
Edited by sprinter1050 on Thursday 7th May 09:15
ds can't waste elsewhere at least. Nationalised industries within a competitive marketplace do not work.
If there is no business model for Jaguar to continue - I'm afraid you have to let it go under. We have already generated an extra 20 years of national debt by underwriting failing companies, let's not add another year to that by subsidising a niche manufacturer.
Undoubtedly it would be a shame for Jaguar's employee's and suppliers to find themselves out of a job - you just have to hope that by seperating the wheat from the chaff, you create a stronger industry, which ultimately creates more employment again.
If there is no business model for Jaguar to continue - I'm afraid you have to let it go under. We have already generated an extra 20 years of national debt by underwriting failing companies, let's not add another year to that by subsidising a niche manufacturer.
Undoubtedly it would be a shame for Jaguar's employee's and suppliers to find themselves out of a job - you just have to hope that by seperating the wheat from the chaff, you create a stronger industry, which ultimately creates more employment again.
I think the government has made an offer that nobody would accept
They have made an offer - so are not just leaving Jaguar to die, but:-
They are only guaranteeing a 6 month loan with punative interest, at the end of the 6 months Jag/LR must be viable
They are not allowed to become viable through redundancies / shrinking the workforce, and they get a civil service beancounter in charge.
Not really a serious offer is it
Still a lot of Ford parts in current Jaguar range, hard to see how the company can move on without being at the mercy of the blue oval
They have made an offer - so are not just leaving Jaguar to die, but:-
They are only guaranteeing a 6 month loan with punative interest, at the end of the 6 months Jag/LR must be viable
They are not allowed to become viable through redundancies / shrinking the workforce, and they get a civil service beancounter in charge.
Not really a serious offer is it
Still a lot of Ford parts in current Jaguar range, hard to see how the company can move on without being at the mercy of the blue oval
Edited by chickensoup on Thursday 7th May 10:02
sosidge said:
Nationalised industries within a competitive marketplace do not work.
If there is no business model for Jaguar to continue - I'm afraid you have to let it go under. We have already generated an extra 20 years of national debt by underwriting failing companies, let's not add another year to that by subsidising a niche manufacturer.
Undoubtedly it would be a shame for Jaguar's employee's and suppliers to find themselves out of a job - you just have to hope that by seperating the wheat from the chaff, you create a stronger industry, which ultimately creates more employment again.
It's not quite so simple as that - there is very little wheat to separate. The government know as well as anyone that the luxury of a weak pound will give us the edge in dragging ourselves out of this recession. This can only be achieved if we actually have something to export i.e. some semblance of a manufacturing industry.If there is no business model for Jaguar to continue - I'm afraid you have to let it go under. We have already generated an extra 20 years of national debt by underwriting failing companies, let's not add another year to that by subsidising a niche manufacturer.
Undoubtedly it would be a shame for Jaguar's employee's and suppliers to find themselves out of a job - you just have to hope that by seperating the wheat from the chaff, you create a stronger industry, which ultimately creates more employment again.
JRL are hardly a dying horse that needs shooting anyway. They now have some damn good product. Unfortunately you need to invest (sometimes literally) billions in development of cars years before you'll ever see a profit and with sales down cashflow is scarce.
It worries me that this government are once again trying to gain more control in an area they shouldn't be sticking their beak and lets face it, the last time we had a nationalised car maker it wasn't entirely successful. However, the notion that we should let good companies in a vital sector go to the wall because of a few immediate cashflow problems is a little short-sighted. Something for once the government are not being.
I only think we should keep JLR because i like the cars/history etc. If it were a company I did not have emotionaly ties to I'd say f*** it, let them go under...so I guess, from a logical point of view, i'd have to say we need to let them go. I've done everything I realistically can (I own a Jaguar) to stop this from happening.
Droptheclutch said:
Perhaps Gordo & his merry bunch see this as a vote winner? One that appeals to every man as keeping JLR British?
If so, he's getting very desperate...
It would work for me!If so, he's getting very desperate...
Edited by varsas on Thursday 7th May 10:20
I remember a while back when it was announced that JLR were looking for some sort of bail out- everyone was up in arms over the whole Tata / Indian charade. The general spout was "Why do they deserve cash being foreign? Blah blah blah, xenophobia, livid and ill informed."
Most of the comments I've read today really smack of jumping on the band wagon... and if I hear one more 'the gov't messed up our economy' style rambling; I will scream! I'm holding out for some sort of xenophobic Indian crack to be honest.
IMHO, if JLR want cash from the British people (thats you and I remember); it's only fair that they cut us in to the equation. Being able to safeguard 15'000 UK based jobs and overseeing the company isn't exactly asking the world now is it for £500'000'000?
Think about it; £500'000'000 is not exactly pocket change, to put it in real terms it's the equivalent of about 50 new primary schools, 20'000 new freelanders, and over £150'000'000 more than Bearings bank would have needed to keep itself afloat... now ask yourself the question: If you were lending someone enough money to buy a small country with; under the pretext of safeguarding jobs etc, wouldn't you want to be dead sure that A. you were going to get it all back, and B. The money is actually used to safeguard jobs???
Most of the comments I've read today really smack of jumping on the band wagon... and if I hear one more 'the gov't messed up our economy' style rambling; I will scream! I'm holding out for some sort of xenophobic Indian crack to be honest.
IMHO, if JLR want cash from the British people (thats you and I remember); it's only fair that they cut us in to the equation. Being able to safeguard 15'000 UK based jobs and overseeing the company isn't exactly asking the world now is it for £500'000'000?
Think about it; £500'000'000 is not exactly pocket change, to put it in real terms it's the equivalent of about 50 new primary schools, 20'000 new freelanders, and over £150'000'000 more than Bearings bank would have needed to keep itself afloat... now ask yourself the question: If you were lending someone enough money to buy a small country with; under the pretext of safeguarding jobs etc, wouldn't you want to be dead sure that A. you were going to get it all back, and B. The money is actually used to safeguard jobs???
It could be the kick-up-the-arse Jaguar needs. I certainly would not support any bail-out plans if Jaguar's idea of the future was big old-fashioned cars and thirsty V8s. But the recently announced a plug-in-hybrid model which shows they are not thinking about the next 12 months, but the next 12 years which is to be applauded.
Jaguar is not in the same mess as the US companies. There is plenty to salvage, but how did Tata get it so wrong? Are they incompetent?
The trouble with this plan is that Labour ARE incompetent. They have proved it over and over again.
Jaguar is not in the same mess as the US companies. There is plenty to salvage, but how did Tata get it so wrong? Are they incompetent?
The trouble with this plan is that Labour ARE incompetent. They have proved it over and over again.
Here is an Indian point of view:
JLR a proud british company, not managed well and going downhill.
TATA an Indian group which has the experience of developing and sustaining profitable businesses in developing markets comes around to JLR.
TATA gives creative freedom and future vision to JLR in exchange for efficient, profitable and brand enhancing processes and products.
REcession comes around.
TATA has £1b to sink into JLR..but then JLR is no longer british and it wont remain here in the uk and the brand will lose its value. So how can TATA sort this problem out?
Borrow money as JLR, invest in future technologies and efficient, desireable products and make the cash back on the upturn. This is how business works in the real world! And TATA wants to do all this by keeping production and design here in UK!
What JLR needs is cash to maintain its cash flow during the downturn. Banks wont lend at the moment to any auto maker let alone JLR. In fact... JLR would be the most profitable UK auto maker in the next 5 years considering their product range, pricing, quality and costumer satisfaction. But Banks wont lend!
So TATA asks the govt to underwrite the loans just like they have agreed for various other businesses except JLR is much bigger scale.
Govt now looks at the option of messing up a good viable business by putting their people to manage JLR? Are you all in agreement with this considering the govt track record of collecting rubbish from our houses? The govt needs to make a decision and its very simple...will you underwrite the loans to JLR considering its future profitability and current management? Yes or no? If it is a no then JLR goes bust, if it is a yes then JLR lives to make a profit in next 5 years or so..hopefully!
over to you folks.
JLR a proud british company, not managed well and going downhill.
TATA an Indian group which has the experience of developing and sustaining profitable businesses in developing markets comes around to JLR.
TATA gives creative freedom and future vision to JLR in exchange for efficient, profitable and brand enhancing processes and products.
REcession comes around.
TATA has £1b to sink into JLR..but then JLR is no longer british and it wont remain here in the uk and the brand will lose its value. So how can TATA sort this problem out?
Borrow money as JLR, invest in future technologies and efficient, desireable products and make the cash back on the upturn. This is how business works in the real world! And TATA wants to do all this by keeping production and design here in UK!
What JLR needs is cash to maintain its cash flow during the downturn. Banks wont lend at the moment to any auto maker let alone JLR. In fact... JLR would be the most profitable UK auto maker in the next 5 years considering their product range, pricing, quality and costumer satisfaction. But Banks wont lend!
So TATA asks the govt to underwrite the loans just like they have agreed for various other businesses except JLR is much bigger scale.
Govt now looks at the option of messing up a good viable business by putting their people to manage JLR? Are you all in agreement with this considering the govt track record of collecting rubbish from our houses? The govt needs to make a decision and its very simple...will you underwrite the loans to JLR considering its future profitability and current management? Yes or no? If it is a no then JLR goes bust, if it is a yes then JLR lives to make a profit in next 5 years or so..hopefully!
over to you folks.
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