Ratan Tata, chairman of Tata Motors, has warned that Jaguar Land Rover could make further job cuts unless the British government provides financial aid to the brands.
The brands have been suffering financial difficulties as a result of falling sales during the on-going global economic downturn with last year’s global unit sales of JLR vehicles down 12 per cent to 251,590 units.
Tata estimates that JLR needs £500 million (AU$1.049 billion) in loan guarantees from the British government. But UK Business Secretary Lord Mandelson said JLR must stand on its own because it is a private company.
“If funds are not available the company will not be able to run,” Mr Tata said. “So layoffs will take place. If the attitude of the government is who blinks first, the damage is going to be very devastating.”
The company has already laid off 850 temporary workers in December 2008 and a further 500 manufacturing positions went at the end of January this year. A further 150 temporary positions will go from the end of April and approximately 300 managers have been asked to leave voluntarily.
JLR employs about 15,000 people in the UK.