Car manufacturers including Jaguar Land Rover are waiting anxiously for a decision from the European Investment Bank today over vital funding that could keep companies’ heads above water.
A decision is expected later today from the EIB in Luxembourg, which is expected to approve the loan – the first part of a £2.3 billion package announced by Lord Mandelson in January.
About £270 million is expected to be earmarked for JLR, linked to research and development in green technology. If the EIB agree, the government will still need to put up money of their own as a loan guarantee.
Analysts say the money will be a boost for JLR, but the firm will still need some kind of support to keep cashflow going.
In a recent interview with Birmingham Post editor Marc Reeves, the boss of JLR’s owner Tata, Ratan Tata, said the firm needed £500 million in support from the UK government to avoid the “devastating” effects of the global recession.
And Conservative West Midlands MEP Malcolm Harbour said the EIB decision was just the start of the work necessary to support JLR.
He said: “This is investment for the future, insurance for the future, because they need to support so they can continue their research without having to cut back on spending because of the cashflow problems.
“They have told the government normal bank lending conditions aren;t available and asked them for help.
“The government did promise that there would be additional funding on the top of the EIB funding, but that hasn’t materialised yet.”
