A new, and it is to be hoped final, twist to the long-running drama of Jaguar Land Rover emerged yesterday with a claim that the bailed-out banks are having their arms twisted to do what they should have been doing all along and pump some much-needed liquidity into the carmaker.
A usually reliable source told the Birmingham Post that Lloyds, RBS, and an unnamed third bank, are under orders to form a consortium to supply JLR with the £500 million it needs in order to revive its dwindling cash flow.
That money is needed – in the short term at least – even more than the £340 million research and development loan from the European Investment Bank announced on Tuesday.
After all, what is the point of part-financing a carmaker’s product development plans if the company is at risk of going under for want of day to day working capital?
Although this newspaper has been critical of the Government’s failure to respond speedily to JLR’s appeal for short-term aid (aid which, let it be remembered, would be at commercial rates), it now begins to look as though business secretary Lord Mandelson, deafened by shrill and ill-informed voices urging him to refuse “bail-outs” for a “rich, Indian-owned manufacturer”, may have been playing a canny, if long, game.
By waiting for the EIB to demonstrate its own faith in JLR’s prospects he can now commit the Government to underwriting the second, bigger, tranche of aid.
Let us hope so. Meanwhile, the German government yesterday moved even further towards putting a floor under its own automotive industry by increasing the money available to consumers who trade in old cars for new, less polluting, models from €1.5 billion to €5 billion. In the UK we are going to have to wait for the April Budget to learn whether or not a similar market-boosting scrappage scheme is be introduced here.