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| Version 1 | Version 2 |
|---|---|
| Jaguar aid talks 'near collapse' | Jaguar aid talks 'near collapse' |
| (about 4 hours later) | |
| Talks between the carmaker Jaguar Land Rover and the government on a package of financial support are close to collapse, the BBC has learnt. | Talks between the carmaker Jaguar Land Rover and the government on a package of financial support are close to collapse, the BBC has learnt. |
| The carmaker received what it was told was a final offer from the business department on Friday. | The carmaker received what it was told was a final offer from the business department on Friday. |
| Jaguar has not formally rejected it, but is understood to feel that the tough conditions demanded in return for guaranteeing a loan are unacceptable. | Jaguar has not formally rejected it, but is understood to feel that the tough conditions demanded in return for guaranteeing a loan are unacceptable. |
| If no financial help is provided, jobs and important investment could be cut. | If no financial help is provided, jobs and important investment could be cut. |
| The government is understood to want a right to veto management decisions, appoint its own chairman and have a say in any future redundancies at the company which employs 14,500 people. | The government is understood to want a right to veto management decisions, appoint its own chairman and have a say in any future redundancies at the company which employs 14,500 people. |
| The BBC's business editor Robert Peston said Jaguar views the proposal as backdoor nationalisation - and is minded to turn the offer down. | |
| This would not be curtains for a totemic company that until recently was making good profits, our correspondent said. | This would not be curtains for a totemic company that until recently was making good profits, our correspondent said. |
| But it could lead to significant cost cuts that would entail job losses and serious reductions in valuable investment. | But it could lead to significant cost cuts that would entail job losses and serious reductions in valuable investment. |
| Taxpayers' money | Taxpayers' money |
| The dispute centres on financial support from the European Investment Bank (EIB) and conditions the UK government is imposing in return for guaranteeing the loan. | The dispute centres on financial support from the European Investment Bank (EIB) and conditions the UK government is imposing in return for guaranteeing the loan. |
| A spokesperson for the Department for Business, Enterprise and Regulatory Reform (BERR) insisted the government was "prepared to help, although not on any terms". | A spokesperson for the Department for Business, Enterprise and Regulatory Reform (BERR) insisted the government was "prepared to help, although not on any terms". |
| "Any government financial assistance must, of course, protect taxpayers' money," the BERR spokesperson said. | "Any government financial assistance must, of course, protect taxpayers' money," the BERR spokesperson said. |
| Indian Tata Motors, which bought Jaguar Land Rover for £1.2bn just over a year ago, has refused to comment on the negotiations. | Indian Tata Motors, which bought Jaguar Land Rover for £1.2bn just over a year ago, has refused to comment on the negotiations. |
| Conditional support | Conditional support |
| In January, Lord Mandelson, the Business Secretary, unveiled a £2.3bn package of measures designed to help the struggling car industry. | In January, Lord Mandelson, the Business Secretary, unveiled a £2.3bn package of measures designed to help the struggling car industry. |
| We regard Jaguar Land Rover as a viable company with good long-term prospects Business department spokesperson | We regard Jaguar Land Rover as a viable company with good long-term prospects Business department spokesperson |
| Guaranteeing loans from the EIB was part of that plan. | Guaranteeing loans from the EIB was part of that plan. |
| But according to analyst Howard Wheeldon of BGC Partners, the government is only willing to underwrite half of the £340m loan offered by the EIB and for a period of six months rather than the three years sought by the company. | But according to analyst Howard Wheeldon of BGC Partners, the government is only willing to underwrite half of the £340m loan offered by the EIB and for a period of six months rather than the three years sought by the company. |
| Emission targets | Emission targets |
| Jaguar Land Rover needs to invest heavily to re-engineer its fleet of predominantly large-engined vehicles to meet future environmental regulations. | Jaguar Land Rover needs to invest heavily to re-engineer its fleet of predominantly large-engined vehicles to meet future environmental regulations. |
| But the company's ability to invest has been hit by the savage downturn in the global car market. | But the company's ability to invest has been hit by the savage downturn in the global car market. |
| Since September it has been reliant on Tata Motors for cash to stay in business. | Since September it has been reliant on Tata Motors for cash to stay in business. |
| The loan from the EIB would be made to help develop technology to reduce the carbon dioxide emissions from Jaguar Land Rover cars. | The loan from the EIB would be made to help develop technology to reduce the carbon dioxide emissions from Jaguar Land Rover cars. |
| Tata's responsibility | Tata's responsibility |
| The government has always made clear that the primary responsibility for supporting Jaguar Land Rover lies with its parent company Tata Motors. | The government has always made clear that the primary responsibility for supporting Jaguar Land Rover lies with its parent company Tata Motors. |
| The Indian company is itself controlled by Tata and Sons - a group of businesses led by Ratan Tata. | The Indian company is itself controlled by Tata and Sons - a group of businesses led by Ratan Tata. |
| At the heart of the dispute is the degree of control the UK government would be given in return for putting taxpayers money at risk by guaranteeing the EIB loan. | At the heart of the dispute is the degree of control the UK government would be given in return for putting taxpayers money at risk by guaranteeing the EIB loan. |
| A spokesman for Jaguar Land Rover said that discussions with government were continuing. | A spokesman for Jaguar Land Rover said that discussions with government were continuing. |
| "The government wants to see Jaguar Land Rover safely through difficult trading times and to provide stability for the company and its employees," the spokesperson from the business department said. | "The government wants to see Jaguar Land Rover safely through difficult trading times and to provide stability for the company and its employees," the spokesperson from the business department said. |
| "We regard Jaguar Land Rover as a viable company with good long-term prospects." | "We regard Jaguar Land Rover as a viable company with good long-term prospects." |