Tata to inject cash into Jaguar Land Rover

Indian industrial conglomerate Tata is to inject 'tens of millions' of pounds into Jaguar Land Rover to prevent an immediate cashflow crisis, while the Government continues to discuss a possible taxpayer bailout.

Tata's cash injection has brought the Government breathing space to respond to Jaguar Land Rover demands for multi-billion loan guarantees.

The Times says that Tata's decision came after Prime Minister Gordon Brown had decided to intervene to prevent the collapse of the carmaker and was preparing to announce a short-term bailout.

But, a combination of tough rhetoric in public and private reassurance appears to have helped the Tata Group to secure enough cash to postpone the bailout until after Christmas.

Chancellor of the Exchequer Alistair Darling is said to be concerned that any state support does not set too generous a precedent for other sectors.

Over the weekend, according to the Daily Telegraph, Business Secretary Lord Mandelson played down speculation that the Government was poised to announce a bailout of the ailing car company.

He said Jaguar Land Rover would have to 'look to themselves and their own resources' before the Government would intervene.

Any decision on Government help for Jaguar Land Rover and Vauxhall, which is also seeking financial aid, is not now expected until the New Year.

However, Lord Mandelson's refusal to intervene has angered trade unions. Unite's Derek Simpson claims that 'tens of thousands' of jobs are at risk unless the Government steps in quickly.

Financial Times/The Times/Daily Telegraph/Daily Mail: December 22

Credits: Jarvis