Tata looked to have won the “awkward, unnecessary and ridiculous” battle with the Government over funding for Jaguar Land Rover with yesterday’s announcement that it had secured fresh capital from commercial sources, it was claimed last night.
Business secretary Lord Mandelson appeared to claim victory when he said in a BBC interview: “Tata made some very big demands on the taxpayer at the beginning of the negotiations.
“If we’d started handing over money we would have been doing so prematurely and, in the event, unnecessarily.”
But Howard Wheeldon, senior strategist at brokers BGC Partners and a close follower of JLR’s fortunes, said: “Not quite, but very politely and just as you might expect from management of Tata Motors, it seems Lord Mandelson has been told ‘thanks, but no thanks’ in response to the miserly and hugely expensive offer of help to the original request . . . from Tata Motors to HM Government.
“Given that for the best part of a year ever since the request for assistance . . . there had been an apparent unwillingness to support the Indian-owned JLR group it may well appear to some that it is the British Government that has won this awkward, unnecessary and ridiculous battle to prove the hugely important UK luxury car companies with some form of financial support.
“Far from it Indeed, it could be argued that the spoils of war on this occasion in fact go to Tata which appears not only to have found better and more willing sources of immediate support but also long term support on decent and acceptable commercial arrangements.”
Mr Wheeldon went on: “Right from the start Tata management has in my view always appeared to have the will to succeed. It is this, and this alone, why I have backed the company, feeling it fully deserved the very limited non-cash assistance from the Government.
“That was probably never to be, but unlike the Government, living out the last few months of its existence hardly having a clue what to do next, JLR workers and customers can at least be reassured that they have decent management in charge.”
Automotive expert David Bailey of Coventry University Business School said Tata’s success in raising commercial funds indicated that credit conditions are improving, at least for large companies.
“Tata could not access finance before and now they are able to, but problems still exist for smaller firms,” he said.
“It does not reflect very well on the automotive assistance programme from the Government. They have made money available but it was under such onerous terms than nobody could actually use it. We are back again to the issue that not one penny has been taken by anyone in the automotive industry and the one company that was actually talking to them ended up going to the markets instead. The funding highlights the ongoing confidence in JLR as a quality brand and the faith in the recovery of the automotive sector.”