Dan Strong's column

	Tata is not just the best prospect for Jaguar's future but, in a sector plagued with financial woe, probably the only option

Indians can’t make Jaguars. So said Ken Gorin, chairman of the Jaguar Business Operations Council and an influential car salesman operating in North America. Referred to during a BBC interview I was part of last week,
his blunt view that having an Indian company, such as Tata, building the big cat’s new models would “throw a tremendous cast of doubt over the viability of the brand” has been reported around the world.

Well, I have got some bad news for Ken. If he takes a tour of the Jaguar factories in Castle Bromwich, West Midlands, and Halewood, Merseyside, he’ll find all manner of people involved in building vehicles, including quite a few who are of Indian descent. According to Tata – sure to buy both Jaguar and partner Land Rover – nothing is going to change that in the near future. In a closed-door meeting with workers, the manufacturer has indicated that it will back both companies’ production facilities in the UK for the foreseeable. But why wouldn’t it?

Unlike MG Rover, the previous British firm to be sold to an ambitious Asian concern, Jaguar and Land Rover are functioning businesses with a clear view of the future. Both have a motivated workforce that’s not only highly skilled, but busy engineering a new generation of cars, too. So to suggest that Tata’s stewardship could be bad news begins to appear pretty misguided, if not a little ill-informed. In fact, I would go so far as to suggest that this company is not just the best possible prospect for Jaguar’s near-term future but, in a sector plagued with financial woe, probably the only option.

The idea that private equity could refloat the loss-making Jaguar and Land Rover on a sea of cheap credit was originally an insiders’ favourite. However, the recent banking crisis which has bitten here and Stateside appears to have put paid to that.

A firm called One Equity, originally a leading player in the race for the keys to the famous British brands, would probably not have been the right partner for the future anyway. It’s the function of private equity to get in, get rid (of people, mainly) and get out before anyone has time to think about the consequences. Both the Jaguar and Land Rover organisations are far too complex to gamble on this simplistic approach.

But if the two are such a great buy for an ambitious car company with an eye on the future, why is Ford even considering selling them? If you’ve had even half an eye on the blue oval over the past 12 months, you won’t have been able to miss the fact that the American giant needs cash badly, and has already sold off Aston Martin to help balance its books. Getting rid of Jaguar will be a further relief to the company paymasters.

And anyway, Ford has already invested billions in the Coventry firm, and hasn’t seen a penny of it back. While there is no reason for it to hold on, there’s every reason to get shot. Bosses are apparently obsessed with micro-managing their product line-ups, and their strong-arm tactics when it came to cost savings ironically seemed to hurt the luxury brands the most. After all, I think you’ll find it was Ford that put Fiesta switchgear and instrumentation into the 1998 S-Type, and tried to fit air vents from the £6,000 Ka into the £160,000 Aston Martin Vanquish...

Free of the blue oval, Jaguar will need time to find its feet again, but with partner Land Rover in rude health it seems the future for both firms couldn’t be brighter. Add in access to new markets in both India and China that the acquisition by Tata should offer, and it’s clear to see why there’s a sense of guarded optimism among those who are actually being bought. So, sorry, Ken – your views on Indian ownership are plain wrong.