JAG AND LAND ROVER NEED A LEG-UP: The leaping Jaguar mascot atop the Midlands headquarters of the company in the UK. File picture

London, Nov. 23: Jaguar Land Rover (JLR), which the Tatas bought nine months ago, has approached the government with a request for a £1-billion (Rs 7,500 crore) loan to tide it over the global financial crisis.

JLR is in talks with the government, a company spokesperson told The Telegraph, although he would not comment on “speculation on the content of the confidential discussions”.

An official suggested that the Gordon Brown government was not averse to looking at such a request.

“The government clearly can see that these are unprecedented times for the global economy and for the global automotive sector. Lord Mandelson (business secretary and equivalent to the industry minister in India) will be meeting representatives of the UK automotive and retail motor sector this week to discuss where government action can help,” a spokesperson for business, enterprise and regulatory reform said, declining to comment on individual cases.

The JLR spokesperson had also referred to the global situation while confirming the talks with the government.

“The automotive industry is facing unprecedented trading conditions as a direct fallout of the banking crisis and turbulence in financial markets and we are, of course, keeping the government appraised of the impact on our business,” the spokesperson said.

“Jaguar Land Rover supports both the UK and the European industry position that government intervention is required to improve liquidity in the supply chain and support continued investment in carbon reduction technology as well as stimulating consumer demand,” the spokesperson added. “The French, German, US, Australian and the Chinese are all considering industry support packages.”

The Sunday Times, London, had reported today that Jaguar Land Rover “is in secret talks with the government for a £1-billion loan, just nine months after Tata, the Indian conglomerate, bought the luxury-car marquee”. The paper said the Tatas were looking to the government for a bridge loan to help it over the next 24 months.

Ratan Tata had earlier this month written to all chief executives of his group on how to prepare for the feared economic slowdown. One of the suggestions was to tap into all available credit lines.

When Tata bought two of the most famous names in British motoring earlier this year, he knew he was unlikely to make a profit in the short term. Unions backed his acquisition because he gave a commitment he would safeguard British jobs and invest in the future of Jaguar and Land Rover.

But large-scale redundancies in the UK car industry are a “probability”, David Smith, the chief executive of JLR, warned.

According to The Observer, Smith added that jobs were at risk not just at the manufacturers but at small firms in the supply chain.

The paper said JLR had already announced 600 voluntary redundancies this year. Smith did not rule out further job cuts. “I hope demand picks up so we don’t have to make any more,” was Smith’s chilling comment on a Sunday when blizzards were sweeping across much of the UK.

It will be of little comfort to Tata that in America, the country’s Big Three — General Motors, Ford and Chrysler — are also seeking loans of $25 billion.

Automobile production in the UK has fallen by 25 per cent as motorists stick with their old vehicles.

Despite success with its new Jaguar XF sedan model, particularly in America, JLR is facing a drop in sales. “The group, which employs 15,000 workers in the UK, needs to slow production in order to sell a backlog of vehicles,” according to The Sunday Times, London.

“Around the world, the market for JLR cars has fallen 25 per cent and analysts fear this could further deteriorate,” it reported.