With the need for funds getting more dire, it is the deep pockets of the Tatas that seems to have come to the rescue of Tata-owned Jaguar Land Rover, as the the British government has been hesitating even though the company has asked for funds (See: UK government weighs bailout package for Jaguar Land Rover)
According to a report in the london-based business daily, Financial Times, Tatas have agreed to inject ''tens of millions'' of pounds into the British car company to prevent an immediate cash flow crisis, while the UK government continues to consider the case for a taxpayer-funded bail-out for the iconic brands Jaguar and Land Rover, which Tata Motors acquired earlier in the year (See: Tata Motors confirms Jaguar, Land Rover deal with Ford for $2.3 billion).
The cash injection from Tata has bought the UK government breathing space to respond to demands for multi-billion-pound loan guarantees from the car sector. Chancellor Alistair Darling is understood to be concerned that any state support does not set too generous a precedent for other sectors.
Lord Mandelson, business secretary, is considering whether Jaguar Land Rover still needs government backing to get through the recession or whether Tata can be called on for further cash support.
''We are looking at the sector as a whole," he said last week. "I have had discussions with the owners and management of Jaguar Land Rover in particular, because they argue that they are under particular strain.''
Lord Mandelson is understood to be sympathetic to the argument that Jaguar Land Rover could be an exception to his ''no open cheque-book'' rule for distressed companies, not least because of its heavy research and development investment in the UK.
The Tata Group is understood to be adamant that its support for its UK car subsidiary does not negate its argument that the government should provide bridging loans and credit guarantees to the company and the British car sector as a whole.
The company had last month sought a £1-billion loan, after steep declines in production and sales forced it to lay off around 850 IT and engineering staff because of "severe" global car market conditions.
Jaguar Land Rover currently employs 15,000 people and has been operating on a four-day week since August. It is also seen as a vital contributor to the West Midlands regional economy.
Is Midlands going the Detroit way?
Last week another car maker in the Midlands, Aston Martin, which was lso owned by Ford Motors' Premier Automobiles Group, also announced possible job cuts of up to 600 inviting calls for strike action by the industrial workers' union Unite.
Component manufacturers in and around Midlands are also under threat and nearly 70 car component firms in the West Midlands held a meeting at a suppliers forum in Birmingham to decide on the course of action.
Both car makers and component manufacturers are clear on their moves to scale down production and have called upon the government to support their moves to avoid redundancies.
There was also a unanimous call to the government to make credit available so they could retain staff during low production periods.
At least one major parts maker, Wagon, based in Birmingham, was wound up last week, costing around 500 jobs.
The UK motor industry pointed out that France, Germany and Sweden are also providing emergency help for their companies. General Motors Europe, which employs 5,500 people at Vauxhall plants in Luton and Cheshire, has joined Jaguar in seeking government help
The British automobile industry, with an annual turnover of about 50 billion pounds, provides direct employment to some 190,000 people and supports 850,000 jobs in the industry as a whole, including components and retail segments.