The man at the helm of Jaguar Land Rover says Indian conglomerate Tata’s move to buy the loss-making West Midland group was a “terrific decision.”
Group chairman Ratan Tata was upbeat about JLR’s prospects at a showroom launch in Mumbai, less than a week after losses of £281 million in the 10 months to March 2009 were revealed.
Mr Tata told reporters: “It was a terrific decision that we took to bid for these two brands and own them.
“We are going through a downturn today that has unfortunately somewhat condemned Jaguar and Land Rover in perception; that perception is very wrong.”
Tata bought JLR from Ford last June for 2.5 billion dollars but has had to cut 2,000 jobs and slash production levels due to the economic downturn.
Meanwhile, thousands of salaried employees at JLR have been asked to agree to delayed wage payments to “smooth out cash-flow” at the group.
As the 4x4 manufacturer today prepared to fight back against the recession with the production launch of its crucial 2010 model range, £200 one-off payments were on offer to staff who agree to salary swaps.
Last week senior Tata executive Ravi Kant – rumoured to be taking a more hands on role at JLR – warned that the company could face more job losses, fuelling further speculation in some quarters that the Halewood plant could be vulnerable because of its more limited product range.
In a bid to ease pressure on the company’s finances, bosses at the group have written to employees asking them to accept a delayed payment date for salaries from this month with around 6,000 of the group’s 14,500 strong workforce across the West Midlands and Halewood being asked to switch.
The request is understood to have been sent by email to salaried staff earlier this week and around 25 per cent have already responded positively. Hourly paid production workers, who are traditionally paid weekly, are not affected.
Rather than the usual JLR pay day of the 15th of the month, the company wants to push payments to the end of the month to ease cash flow.
It is understood that JLR recently negotiated extended payment terms with its suppliers, moving them from 45-day to 60-day terms.
But the 15-day extension now means that supplier payments will clash with salaries.
A statement from JLR said: “It is not an unusual business practice for employee salary payments to be made at the end of each month, but Jaguar Land Rover has a legacy system whereby these payments are currently made mid-month.
“In its ongoing plans to streamline business operations and aid cash flow the company is seeking to adopt this industry norm.
“In recognition of the possible inconvenience to employees whose accounts are currently arranged around mid-month payments, the company is offering a one-time payment of £200 to those employees who agree to the change.”