London/New York: Indian business behemoth Tata Group seems to have further strengthened its position in the race to acquire US carmaker Ford’s British brands Jaguar and Land Rover, with the workers union backing its bid.
The support came after three shortlisted bidders — Tatas, another Indian firm Mahindra and Mahindra and private equity firm OneEquity — made presentations to the union in London on Tuesday, media reports said on 22 November.
“Local officials from the factories serving the two luxury brands opted to back Tata because they felt that a manufacturer would offer more long-term security than OneEquity, other leading bidder,” UK daily The Times reported.
OneEquity is led by former Ford CEO Jacques Nasser, during whose tenure the US carmaker had purchased Land Rover seven years ago.
The union representatives also voiced their concern over Tatas’ bid mainly due to fears of possible outsourcing of manufacturing activities.
Another British daily Financial Times quoted a person familiar with Tatas’ presentation saying that “the carmaker committed to the two brands as a long-term investment and endorsed the two brands’ management.”
Even though the union backing is not essential, the support is seen as important for the politically sensitive deal, the report said.
US financial daily Wall Street Journal said in a separate report, during a meeting at “Land Rover’s factory in Solihull, England, about 60 senior shop stewards representing workers at both brands voted in favour of a resolution supporting Tata’s bid.”
The union support could give a political boost to Tatas’ bid, the report stated.
Land Rover and Jaguar are estimated to directly employ 16,000 people. The figure touches around 40,000 when employment generated throughout the supply and support chain are included.
In a statement, British trade union Unite’s joint general secretary Tony Woodley said that the union’s shop stewards at Jaguar and Land Rover had made it clear that they would prefer to stay as part of Ford but “if the sale was decided, they felt the best interests of the workforce would be served by finding a partner with an established presence and background in manufacturing”.
Based on serving the best interests of the union members at Jaguar and Land Rover, the stewards agreed that Tata best fit these criteria, the statement added.
Ford is looking to finalize the bidder for its two luxury brands by December and the US carmaker is expected to get about £1 billion from the sale.