TATA, Jaguar Land Rover’s Indian owner, will inject ‘tens of millions’ of pounds into the business, reports the FT.
The money will be used to tide the business over, while government evaluates the viability of state aid.
Ministers are delaying a decision, as they are keen not to set a precedent for other industries. Lord Mandleson is also not sure whether the business actually needs cash to see it through the recession.
The FT quotes a government insider, who said that Tata has ‘managed to solve the immediate difficulties so maybe they can resolve some others as well.’
Tata, says the paper, has already provided ‘hundreds of millions’ of working capital since it bought the business from Ford in March.
The government has also acknowledged the company’s ‘heavy research and development investment in the UK’. It employs 15,000 people, many of whom are in the West Midlands.
Industry chiefs say they are being put at a disadvantage, says the FT, ‘in contrast to the bail-outs being offered by the US and continental European Governments’.
The coming days and weeks will determine whether Tata gets the government loans and credit guarantees it is asking for.