Ratan Tata seeks U.K. aid for Jaguar Land Rover

Jaguar Land Rover could make further job cuts unless the British government provides financial aid to the brands, Ratan Tata, chairman of Tata Motors, said today in a television interview.

Tata said Jaguar Land Rover needs £500 million ($734 million) in loan guarantees from the British government. "If funds are not available the company will not be able to run," he said. "So layoffs will take place."

Tata Motors bought Jaguar Land Rover from Ford Motor Co. last summer for $2.3 billion. The brands have been plunged into financial difficulties after sales plunged during the economic recession. Last year, global unit sales of Jaguar and Land Rover cars fell 12 percent to 251,590.

UK Business Secretary Lord Mandelson has said Jaguar Land Rover must stand on its own because it is a private company.

"If the attitude of the government is who blinks first, the damage is going to be very devastating," Tata said in an interview with Sky News.

Jaguar Land Rover employs about 15,000 people in the U.K. at three factories and two development centers.

The company laid off 500 manufacturing workers at the end of January and will cut 150 temporary workers at the end of April. About 850 temporary workers were sent home in December. About 300 managers have been asked to leave voluntarily.

Earlier this month, the British government approved a £27 million ($37 million) loan to help Land Rover develop a smaller Range Rover model, code-named the LRX.

A government spokeswoman told Automotive News Europe today that government ministers are helping Jaguar Land Rover in its discussions about financing with British banks and the European Investment Bank.

But she added: “The primary responsibility for short-term financing or longer-term restructuring rests with the parent company.”