The Hindu Business Line : Tatas drive in Jaguar, Land Rover; hopeful of solution to loan issue

Making historic entry: Mr Ratan Tata (second left), Chairman, Tata Group and Tata Motors, with (from left) Mr Mike O’Driscoll, MD, Jaguar; Mr David Smith, CEO, Jaguar Land Rover; Mr Phil Popham, MD, Land Rover; and Mr Ravi Kant, Vice-Chairman, Tata Motors, at the launch of Jaguar Land Rover brands, in Mumbai on Sunday. —

Mumbai, June 28 Tata Motors is hopeful that talks with the UK Government on a loan guarantee for Jaguar Land Rover (JLR) will yield a positive result.

The government is reportedly driving a hard bargain to guarantee the European Investment Bank’s £340 million loan.

“We are in discussions with the UK Government for the loan guarantee and are hopeful that we will find a solution. Our funding plans for JLR will then progress so that we can see ourselves through this downturn,” Mr Ratan Tata, Chairman of Tata Motors, said at a press meet here on Sunday.

Reports have been doing the rounds that the UK Government would like to have one or more representatives on the JLR board if it guarantees the loan. In fact, there have been reports of the UK Government taking a stake in the company also.

“If there is a large financial package from the UK Government, there should be a commensurate level of representation or answerability to them. It is a question of negotiating what will be fair, which is what we are in the process of doing,” Mr Tata said without getting into the specifics.

“I just want to say that sustaining us is extremely important, in my view, because there has been such high levels of technological inputs into the products that I would really like to see these two brands come out of the downturn as companies with new models in a world that is reviving,” he added.

The press conference marked the launch of JLR products in India. Tata Motors had bought out the British brands from Ford in June last year for $2.5 billion.

Mr David Smith, CEO of JLR, said that during this downturn, the company had had to take some “extraordinary actions” in its business such as reducing labour costs to improve its cash flow.

“If market conditions dictate, we might take further action and that could involve further job losses, plant shutdowns and we cannot rule that out,” he cautioned.

Even during the time of bidding for JLR, sceptics felt that Tata Motors had erred in paying so much for a brand which they considered “increasingly irrelevant” in the world market. However, the Tata Motors Chairman insisted that there were “tremendous skills and capabilities” in JLR which would come to the fore once the world economy was back on its feet.

“We are going through a downturn today that has somewhat unfortunately condemned JLR in perception. That perception is wrong. These are terrific brands with terrific R&D behind them. It is for us to manage to put these into products and bring them(products) into production,” he said. It was also Mr Tata’s contention that JLR today “is a different company from what it might have been several years ago” and that his company was “very proud” to have these brands in its stable.

“We hope that as we come out of this downturn, we can look back and say that it was a terrific decision that we took to bid for these brands and to own them. As an Indian, I am very proud that we have managed to have these brands with us and together we can make them go back to the glory that they have had quite rightly and deservedly over the years,” he said.