Jaguar talks close to collapse

The Telegraph ^ | 5/7/2009 | Graham Ruddick

[bruinbirdman]

The future of Jaguar Land Rover, the largest UK-based car maker, is under threat as talks with the Government about a financial support package were on the brink of collapse last night.

JLR, which is owned by Indian conglomerate Tata, needs guarantees on a £340m loan from the European Investment Bank and a £400m financial package from state-backed banks Royal Bank of Scotland and Lloyds Banking Group.

However, according to sources close to the negotiations, JLR and Tata were left reeling on Friday by what they believe are unacceptable final terms set by the Government for underwriting the EIB loan.

These include the Government demanding a veto over all decisions taken by the company, the ability to choose the chairman, a permanent seat on the board, extra investment into JLR of £300m by Tata, and guarantees of no further job cuts among the 15,000 UK employees.

The Government has also said it will only guarantee £175m of the loan and that, if it is taken up, it will charge JLR 15pc of the total to provide it.

The loan from the EIB is intended for the development of green technology – such as hybrid vehicles, lightweight materials and regenerative braking systems – but needs to be fully underwritten to be received by JLR.

Earlier this year, Lord Mandelson, the Business Secretary, unveiled the £2.3bn Automotive Assistance Scheme, which was designed to help car makers through the crash in new vehicle sales by offering loan guarantees.

If JLR is unable to access the EIB loan then it would face serious questions about its ability to finance a £800m future development programme, with plants and jobs threatened.

Howard Wheeldon, senior strategist at BGC Partners, suggested the Government was trying to take control of JLR "without putting a single penny

[Frantzie]

Sad. Ford spent a fortune on Jag and they finally are making decent cars. The newest 4 door is pretty nice. Ford also fixed up Aston then had to sell it off to Dave Richards and his ME investors. I never liked Aston but two of the models are great looking.

[truthguy]

So the US isn’t the only country who has this auto problem. Are there any auto manufacturers anywhere who aren’t loosing money in this economy?

[SIDENET]

Are there any auto manufacturers anywhere who aren’t loosing money in this economy?

I believe that Subaru and Hyundai are still making money in the US.

[dennisw]

Kia doing OK

[Aussiebabe]

My husband has a new XF supercharged and he loves it. Says it is the best car he has ever had. I wonder if Tata can just simply move the operations to India? Maybe if they go under, he will have a “collectors piece”.

[Spktyr]

I probably shouldn’t tell you what to expect by way of problems with your XF, then...

[Spktyr]

Nissan is still quite profitable in the US as well. No shortage of their little Versas running around here, for example.

[alfa6]

Having driven several 800+ mile roadtrips in a Versa I can say that it is quite a comfortable car. I particulary like the fact that I do not have to pull myself out of the vehicle like I have to on a Taurus and Impala.

The one drawback is the 4 cylinder gets a bit noisy on hills.

Regards

alfa6 ;>}

[Spktyr]

Yeah, I’m not a fan of the vehicle class at all, but if I was told to choose amond the Yaris/Fit/Versa/Aveo set, I’d get the Versa. Seems to be the best of the lot, IMHO.

[Aussiebabe]

He has had it 8 months and hasn’t had a single problem with it and hasn’t had to have it serviced. (Delivered last September).

[Spktyr]

How many miles are on it? Less than 10K, I’d wager.

[Aussiebabe]

Yes, he has only had it 8 months. But he told me Jaguar has become one of the most reliable autos on the road and in the USA was just rated by Powers as the customers best liked auto. I know, the old XKE’s used to burst into flames.

I don't drive his XF. I have a Mazda MX-5, I never have had any problems with it either. It is the one with the hardtop convertible.

[Spktyr]

JD Powers is the company that posted that ranking, and it is more than a little suspicious as nobody else has data that matches those conclusions.

Also, if he hasn’t had it back in for servicing, he needs to know about the two BIG recalls on it so far - the seat belt annuciator speaker wires crack and can short out, and the rear seat belts’ d-rings break, which can cause problems in an accident.

[Charles Martel]

Yeah, I’m not a fan of the vehicle class at all, but if I was told to choose amond the Yaris/Fit/Versa/Aveo set, I’d get the Versa. Seems to be the best of the lot, IMHO.

I'm really surprised by the tepid response that the Honda Fit has received. I don't care for the things at all, but I know several people who were looking forward to the car's debut. Honda splashed their Fit ads all over local billboards - but I see very few of the cars on the road. Either Honda is directing those cars to a different regional market, or the public hasn't embraced the Fit as Honda had expected.

C'mon, Honda... build the CR-Z - and offer a non-hybrid version.

[Aussiebabe]

Hi, this is not aussiebabe, it is aussiebabe's husband, she grabbed me to answer you post. I was aware of those recalls, I saw them on the internet a few months ago, but since I didn't get a notice, I had already called my dealer and my XF SV8 (supercharged) wasn't involved. I am guessing, since it was the first year these models were produced, and the very first models went to the USA and UK, by the time I got mine here in Oz, they were corrected. I had my SV8 specifically ordered and with some of the options that weren't originally offered, and it took nearly a year for my car to be delivered. I don't think those recalls are very significant for the first year model car, especially the D ring. You are always taking a chance when you order a first year model of any car, especially one like the XF that is so radically different from previous models of a company. But I couldn't be happier. I have had brand new Mercedes, other new Jaguars and new Volvo's before and this, is by far, the best car I have ever had with the fewest problems in the first 8 months. The exterior is not that radically different, but the interior is fantastic. Actually I had an S-Type before and it really didn't have many problems either, but the S-Type is nothing compared to the XF. I think Ford did a good job in correcting Jaguar's quality problems. I am only mad at Jaguar because now they have a new XF R coming out in June, 0-100 km in 4.7 sec with a brand new developed 5.0 litre V-8 engine. This is going into the new XJ too that looks more like an XF, but I don't like large sized cars. Now I have to decide on whether to get the new XF R. You are correct, it was JD Powers that aussiebabe was referring to. I always found them pretty good in their valuations since they come directly from the car owners. I think the Consumer Reports in the USA are not very good evaluations for sport and luxury cars, if you have seen those because the number of readers with those type of cars is limited and their readers are Prius-types. Buick, Jaguar knock Lexus from top of J.D. Power 2009 Vehicle Dependability Study http://www.autoblog.com/2009/03/19/jaguar-and-buick-upset-lexus-in-j-d-power-2009-vehicle-dependab/

[RoadTest]

Wow! Obomanation in England! It’s not just here!

It looks like automobiles are under a concerted, world-wide attack. The Liberals have wanted us on trolleys for decades. Looks like they’re doing something about it.

See, the American auto companies aren’t the only ones threatened. The Japanese transplants need parts suppliers, and many of them are going down with the Detroit three.