London: If the UK government’s help does not come soon, Indian owner Tata Motors will have to cut down its investment plans for Jaguar Land Rover with possible job losses and plant closures, a media report said today.
“If no government help is forthcoming soon, Tata will have to scale down its investment plans in Jaguar Land Rover to make its losses sustainable. That would result in more job losses — and possibly plant closures,” the Guardian reported.
“Tata’s bankers are seeking to secure short-term finance of between £500 million and £1 billion to allow Jaguar Land Rover to pay off supplier payments due by the end of the summer and stop it running out of cash,” the report said. Tata have been seeking the help of the British government in terms of guaranteeing the loans.
“The group needs a fix for Jaguar Land Rover but staff cuts look unavoidable,” the report noted.
It further said that “Tata will reveal this week the price it has paid for becoming the UK’s largest industrial employer.”
While Tata Motors is expected to release the financials of Jaguar Land Rover, purchased for £1.7 billion another group firm Tata Steel that owns Anglo-Dutch steel firm Corus, would also publish its fourth-quarter results.
“Expect a sea of red,” the report said about the two results.
It quoted one London-based analyst as saying that the figures for both would be “PDA” - pretty damn awful.“
Further, it quoted an analyst for an Indian broker as having forecast “annual losses of around $150 million (£91.7 million) for Jaguar Land Rover, although this is less than many experts in the UK have been fearing.”
“Some government officials argue that the Tata empire, rather than the UK taxpayer, should bail out Jaguar Land Rover,” the Guardian report said.
It however quoted Lord Bhattacharyya, founder of the Warwick Manufacturing Group who happens to be close to the Tata family, as saying: “There is a misconception that these guys are all rich Indians,” he said. “Ratan Tata does not own shares in Tata Sons - he is just an employee. Tata Sons is a charity with many global commitments.”