8:45 pm, December 21, 2008
The Sunday Times reports that ministers are considering a huge direct government loan to crisis-hit Jaguar Land Rover.
Contradicting reports in other newspapers, the paper reports that ministers are deliberating on loans of up to £500m.
This is ‘more extensive’ than previously thought, and would help support the 15,000 employees of the firm.
Initial negotiations were thought to focus on a government guarantee for a commercial loan. Now, however, Lord Mandleson is considering a direct government loan.
Cisis-struck credit markets have led to the switch in thinking, says The Sunday Times. It seems the firm was unable to guarantee it could find the cash.
This news reflects the wider panic in the industry. One chief executive of a car maker told the paper that he expects 100,000 jobs to go by Easter.
The SMMT has already asked the government to stimulate demand for new cars, by offering loans to carmakers’ financing arms.
‘What is really killing demand at the moment is that nobody can borrow the money to buy a car,’ the unnamed chief told the paper.
‘The loan companies are simply not interested in doing business because they can’t get the finding themselves.’
By Richard Aucock
