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Mike Rutherford's column

Mike ponders the ongoing saga of the Land Rover/Jaguar sale

Mike Rutherford

By Mike Rutherford

08th March 2008

Contrary to the triumphant claim in the financial pages of heavyweight British and American newspapers last week, Jaguar and Land Rover will NOT be sold to Tata today. The word in the business community was that the deal was to be signed on 5 March. But I know something City journalists and Wall Street analysts apparently don’t: that Jaguar and Land Rover companies still belong to Ford of Detroit, and that’s the way it’s going to stay for weeks, possibly months, and maybe even longer. There are no guarantees about if and when the two English-based firms will be sold off by the Americans to the Indians.
 
Tata will look closely at Jaguar and Land Rover’s mish-mash of design and manufacturing facilities and ask if they are all needed

For the workers in the Midlands and Merseyside, the uncertainty over who will be their paymaster must continue for a while longer. And they’re right to worry about their futures. Meanwhile, the clueless British Government, and equally hopeless opposition parties, have gone eerily quiet, barely daring to say a word about the volatility of the makers and their 15,000-plus employees.

Haven’t we been here before? Wasn’t it the very same, car-hating Labour administration, aided and abetted by the same Conservatives and Liberal Democrats, which stood back and allowed two other up-for-sale Midlands motor companies – MG and Rover – to go down the drain?

There are some similarities between the supposed ‘sale’ of MG Rover to China and the disposal of Jaguar and Land Rover to India. The most obvious is that, just as MG and Rover were unprofitable, so is Jag.

Also, MG and Rover were once related, but very separate, marques that should have been stand-alone companies. Yet they became one, and would inevitably sink or swim together. They sunk. So why is there already talk around the world of a company called JLR – Jaguar Land Rover?

No, I’m not predicting that either brand will die. These two are talented and internationally important, and their respective product ranges are just too good. Neither am I saying that Tata will pull out of the deal to buy Jaguar and Land Rover. That will cost the Indians £1billion up front, plus countless billions more going forward and paying the salaries of 15,390 employees.

But I am warning that Tata will look closely at that sprawling mish-mash of design, engineering, research, administrative and manufacturing facilities, seriously question whether they are all needed, and ask if some might be more profitable as housing estates or shopping centres. Also, those workers are, by Indian standards, each being paid absolute fortunes. Senior managers in Mumbai might have something to say about the fact that they’re personally earning substantially less than ‘loss-making’ manual workers in England.

Representatives from the lethargic trades union movement in Britain met in Birmingham last Thursday [28 February] and decided they are in favour of Tata’s takeover of Jaguar and Land Rover – or JLR as the Indians prefer to say. It has even been suggested that the deal has the “blessing” of the unions.

I wish I was as relaxed. I’m not anti-Tata, but I am worried by the small print that says the Indians pose no “immediate” threat to British jobs and manufacturing, and that car production will remain in England in the “near term”. Fine. But what about the medium to long term? The only guarantee about Jaguar and Land Rover’s buildings, land, products and workers is that there are no guarantees.

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