Should we bail out Landi & Jag?

leaskovski

leaskovski

leaskovski

Soldato
Joined
22 Oct 2004
Posts
9,086
Location
Berkland
Well with what has been going on in the press over the past couple of days, what are your thoughts on this particular crisis? Should the goverment 'bail out' (or more specific, give a loan) to Land Rover and Jaguar given that they are owned by a non UK company (Tata)?

Im intrested to hear peoples thoughts on if we should give them a stack of cash?

Ok, yes there are a lot of jobs that maybe lost due to UK factories closing, but is it all just a political statement by keeping the labour heartland voters happy?

Anyway, whats your take on it all?
 
Why the hell should our tax money be given to an indian company?
The yanks will regret bailing out their car-makers when they come crawling back for more next year. This recession is far from over, and will be getting much worse yet.
 
I really don't like the current "economic climate" (I hate that term too) being called a recession. The official definition of recession is a drop in GDP for 2 quarters. We've not had that.
 
oap said:
Why the hell should our tax money be given to an indian company?
The yanks will regret bailing out their car-makers when they come crawling back for more next year. This recession is far from over, and will be getting much worse yet.
Click to expand...

Because a large number of the companies employees are british, either they have a job or they sit on the dole, the towns that these companies are based in depend on jobs from landi and Jag, without either theres a lot of people out of work and a lot of businesses in the area will also have a harder time. Its not just about the immediate effects, its the domino effect that causes ripples through the economy.
 
Hard decision but the government did not bail out MG-Rover which was British owned and they have set themselves a standard. They also let PSA close the other plant in Coventry. Tata have made a bad decision to buy by the looks of it. I do not understand how they can buy these companies the immediately require assistance to keep them going. Tata have cash as they are partners or sponsoring Ferrari in F1. Maybe they are saying give us some cash or we will take the manufacturing off shore.

JLR are probably in a better position financially the MG-Rover but they are both in a niche market producing big polluting cars as well as possibly no longer having the technical help and access to cheap parts from Ford. The outlook is a bit bleak sadly.
 
If LandRover and Jaguar went down it would cost the UK government a lot more in the long run than it would cost them in loans now, regardless of who owns the company the majority of its employees are in the UK.
Some people are asking why help Landrover and Jaguar but not help Woolworth's ?, Landrover and Jaguar are strugeling as all car manufactures are because of the economic climate but they still have a good business base and with help will pull through, Woolworths on the other hand have been strugeling for a good few years and im sure it was only a matter of time before they went down regardless of the resession.
If you lose a company like Jaguar or Landrover there is no coming back, if we lose them we lose them forever along with all the jobs associated with ancillary companies.
Also don't forget these companies pay huge amounts of money in Taxes, VAT etc that the government would lose.
 
Pigeon said:
Hard decision but the government did not bail out MG-Rover which was British owned and they have set themselves a standard.
Click to expand...

Given the vast amount of cash that one of the previous incarnations of MG Rover swallowed up, I think they were pretty much justified in limiting the support to that £6.5m loan for paying for the workforce....
 
This is hard. Two thoughts.

1) Of course, the collapse of them would be bad news for the economy. It's far more important to us than MG Rover. MG Rover made a bunch of crap products which were hopelessly out of date and that nobody wanted to buy and would cost billions to have replaced. Even with a bailout, MG Rover was doomed to fail. By contrast Jaguar and Land Rover make many class leading products that people very obviously DO want to buy - and they are all made here in the UK were there are significantly higher production costs. They could simply move production to India - but they've not. Many people depend on the existence of these companies.

2) Hang a minute, Tata is one of the wealthiest countries in the world and has sufficient spare capital to announce a multi million dollar sponsorship deal with Ferrari F1...
 
[TW]Fox;13135482 said:
2) Hang a minute, Tata is one of the wealthiest countries in the world and has sufficient spare capital to announce a multi million dollar sponsorship deal with Ferrari F1...
Click to expand...

Few minor points about that:

1) Tata, or more properly Tata Consultancy Services, has been a technology partner of Scuderia Ferrari since 2005.
2) Tata is also engaged in a joint venture with Fiat over car production, this being the same Fiat that owns Ferrari.
3) Where has it been stated that millions of dollars are being paid to Ferrari for this? It could just be an extension of the existing agreement, now that Tata and Fiat have other projects in the pipeline.
 
The question really is about whether or not the sole cause of their problems is down to the current economic situation (eg external pressure) or not, if it is, then ensuring they stay in business isn't a bad idea. (It's totally different to bailing out MG rover, whose failure was a direct result of their business plan). TATA should be providing as much funding as they can, but they have a variety of businesses to run, and no good business risks all their parts for one part that struggling.
 
Indeed this all centres around whether the company's illness is a cold caught from current climate or the signs of something terminal.

If the latter then let it die.
 
merlin said:
Indeed this all centres around whether the company's illness is a cold caught from current climate or the signs of something terminal.

If the latter then let it die.
Click to expand...

Yep. The car industry is suffering from a massive (circa 30%) sales loss across the board, every company is suffering, even the big japanese firms (Toyota just announced they expect to make a loss for the first time ever). There are not many businesses across all industries that could whether such a sudden change without batting an eyelid. The alternative is that the car manufacturers start slashing their expenses to survive, which means massive job losses...
 
You must log in or register to reply here.
Back
Top Bottom