Job fears hit Jaguar Land Rover after huge loss

Author: By Russell Lynch, Press Association

The losses at Tata Motors, which bought the company from Ford for 2.5 billion
dollars (£1.5 billion) in June last year, compared with a £388 million
profit the previous year.

Tata has cut around 2,000 staff at Jaguar Land Rover so far leaving it with
15,000 workers, but hinted at further cost-cutting moves to come.

JLR was profitable in the first half of the year before succumbing to the
downturn, with Tata’s accounts showing losses of £224 million at the
business.

“The global meltdown, especially after July 2008 with vehicle financing and
demands drying up, impacted the auto industry worldwide, including Jaguar
Land Rover,” the firm said.

Tata said Land Rover sales “fell considerably” during 2008, although Jaguar
was able to maintain sales after a “very strong consumer response” to the
newly launched XF sedan.

Tata said it was taking a “number of urgent and long term measures” to stem
losses at the business.

“These include cutting costs drastically and working on a plan of substantial
cost reduction, aligning production with demand and tight control over cash
flows.”

It has also introduced new variants on both Jaguar and Land Rover brands, and
will unveil the new XJ sedan shortly.

Workers at the company’s sites, including Castle Bromwich and Solihull in the
West Midlands and Halewood on Merseyside, agreed to a one-year pay freeze
and shorter working week in March in order to cut costs.

In April Tata received agreement for a £340 million loan from the European
Investment Bank but is currently in talks with the Government over the terms
for guaranteeing this loan, as well as other financial support for the group.

A spokeswoman for the Department for Business, Innovation & Skills said: “The
Government has said that it is willing to help as it regards JLR as a viable
company with good long term prospects. We recognise that trading conditions
for the car industry are difficult at the moment.

“Talks are progressing with JLR and Tata over terms and arrangements of both
the short and long term financing of JLR.”

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