Jaguar Land Rover should be saved by the Government
The Birmingham Post offers no apology for returning - again - to the question of whether or not Jaguar Land Rover should receive any Government aid to help it survive the most savage economic downturn in the peacetime history of the car industry.
The answer, we firmly believe, should be an unequivocal yes.
The national Press, which has unanimously argued against intervention, would doubtless accuse us of special pleading.
To which our response would be - too right! Jaguar Land Rover is a special case, although one can sympathise with the dilemma that the Government finds itself in. To grant the company the commercial loans, or loan guarantees, that it needs to survive until such time as the global money markets begin to function again would open the floodgates to claims from other equally hard-pressed manufacturers.
But just as in normal markets, any application for credit should be judged upon its merits. And the merits of JLR's case are, we are convinced, strong. As Professor David Bailey of Birmingham Business School points out, the cost to the taxpayer in unemployment benefit for some 16,000 JLR employees, plus many thousands more in the supply chain, on top of the accompanying loss of tax revenues should JLR fail, would far outstrip the cost of any short-term cash aid repayable at commercial rates of interest.
Add to that the fact that JLR is the country's seventh biggest investor in engineering research and development and is at the cutting edge of developing the new generation of low fuel- consumption, low carbon-emission cars and the case for aid becomes, we believe, imperative.
After all, this is not a situation of JLR's own making.
It is not British Leyland. It is a modern, efficient company that builds technological advanced cars that the world wants to buy.
The fact that neither it, nor its suppliers and partners, nor its customers can get the credit they require to keep the wheels turning is a problem that can only be addressed by government.
The critics of state intervention may be only 100 miles away in London, but in terms of their understanding of manufacturing they might be on another planet.
It accounts for 30 per cent of the economy of the West Midlands and 20 per cent of that of the UK - that compares with ten per cent in the US.
It, particularly in the form of JLR, is well worth supporting in these virtually unprecedented times.
Links:
R&D could be the key to saving Jaguar Land Rover
David Bailey: Jaguar Land Rover: It's NOT a bail-out, we're running out of time, and the costs of inaction could be huge...
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May be you the Birmingham Post should put you money into Jag and L/Rover.
And stop tell us we should be putting ours in.
It is no longer British But Indian so maybe you should be shouting at the Indian Government.
Nemo
Hi Nemo
The government wouldn't be 'putting money in'but would be lending at commercial rates as the financial markets have frozen up and decent firms are being starved of the cpaital they need. Tata have already invested heavily and are continuing to do so. Many other governments (e.g. Sweden) have intervened to support car making in their countries. The US has just put in $14 billion to keep GM and Chrysler going - that rfeally is a bail out, until the case being made for JLR which is purely on commercial grounds.
this is not a bail out for Jaguar. that's already been done by Tata. the downturn has effected every business, we are all at fault. having said that, look Ford invented the automobile and the middle class in the US. because of US Govt. americans were encouraged to drive big trucks because of low energy costs. yeh, try to get an american to drive a fuel efficient ecomony car when cheap gas is available. how could US car mgfer's build cars that americans didn't want and there was no profit in small cars. Jaguar has a wonderful opportunity to regain it's reputation of making beautiful fast cars always in style. it's a very good investment for the UK Govt. invest in a landmark brand and the people who make it...
I work for JLR and have done so for 30 years.
I have seen the bad times and the good times.We HAD turned the corner.
Last year Land Rover sold a record amount of vehicles around the globe (220,000) with a profit circa $1 billion. This year Jaguar started to benefit rewards of increased efficiency, invesment and new models coming on stream. Up until June 08 JLR had made I believe several hundred pounds profit.
Yes JLR is owned by Indians, but they didn't give the banks all the power. The British government ie Gordon Brown, allowed the greedy banks to run amok. Then suddenly these irresponsible bankers got into trouble, were bailed out by the taxpayer,they cut off credit to both the public and companies. WE are now left to argue who should or should not have short term commercial loans.The UK is only in a better state then Mexico or Germany. The government stood by and did nothing except bail out the banks. They got us into this mess they can get us out of it. JLR is both profitable and efficient.If the government want to let 75000 people go on the dole because of the banks then it will have to pick up the unemployment benefit/lost tax,NI contributions and lost spending power to the economy forever. We are fast becoming a third world economy. Even the Poles have had enough.
As for investing in green transport,to replace JLR that is a no go. Unless it is a cheap to use underground system with a train every minute and a station on every corner (as in London) then no one will use it.People will always want quality cars. Still we can all go back to the horse when the do gooders kill this country stone dead.I believe the irresponsible banks should have been allowed to go to the wall. Let the responsible ones continue albeit tightly regulated.