State aid talks confirmed

Time 7:32 am, December 18, 2008

State aid for carmaker talks confirmedJAGUAR Land Rover has been holding talks with the Government over possible state aid, news sources confirm.

Sky News reports that the carmaker has been in discussions with business secretary Lord Mandleson.

No decision has yet been made, he said.

‘We are analysing very carefully what is going on in the sector, and we will make good judgments in good time if it is appropriate for the government to take any action, or if it is possible for us to do so.

‘I have had discussions with the owners and management of Jaguar Land Rover in particular, because they argue that they are under particular strain.’

Initial signs are promising. ‘The car sector – car manufacturing – is a centre of real excellence and competitive strength in our country,’ the minister said to Sky News.

‘It is not just the carmakers themselves and all those employed directly in the production of cars, it is the huge supply chain of many small and medium-sized enterprises that supply components and other elements to that very important manufacturing process.’

There would, however, not be an open chequebook. It was also too early, he said, to say whether any car firm really needed state aid.

But ministers do look upon the car industry positively. ‘The car sector – car manufacturing – is a centre of real excellence and competitive strength in our country.’

Jaguar Land Rover was bought by Tata in June, and employs 15,000 people in the UK. Last month, the firm cut 850 agency jobs.

Land Rover has suffered heavy sales losses in recent months. Jaguar, however, has been one of the few UK successes, with sales growing in a declining market.

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