Wednesday, May 06, 2009
JLR's loans stall in Whitehall
Talks between Jaguar Land Rover and the UK Government on a financial aid package for the carmaker have reached an impasse over the degree of oversight and management control being demanded by Whitehall.
Senior industry sources say officials have set out a tough set of conditions for JLR management before they agree to guarantee several millions of pounds of loans for the manufacturer.
JLR is said to be resisting the demands. However, Government sources say they are seeking only conventional safeguards and rejected suggestions that the talks were about to end.
The carmaker is awaiting Government approval for a £340 million loan from the European Investment Bank. The EIB gave the green light several weeks ago, but cannot dispense the cash until Britain agrees to repay it if JLR goes under.
Meanwhile, JLR chief executive David Smith says the motor industry is heading for a radical shake-up as it battles to emerge from recession.
He said: "I think we all have to change. We are already seeing restructuring of the industry. We will have a different competitive environment."
And, commenting on the wait for funding help, Mr Smith said: "I think we will be able to do it. I think what we are finding is whereas before Easter there was very little appetite for automotive-based lending, people are coming back into the market for that again."
DATED: 06.05.09
FEED: AW
