Ratan Tata criticises the UK government's failure to assist JLR

25 March 2009

Breaking his silence for the first time against the policy of a foreign government, Tata Group chairman Ratan Tata, who is also the chairman of Jaguar Land Rover warned of ''devastating consequences'' and voiced his disappointment on the UK government's inability to guarantee loans to JLR

Speaking to Sky News and Birmingham Post after launching the Tata Nano, Tata said that the UK government should understand that JLR was seeking a loan from the government for working capital as UK banks have stopped lending, and not a bailout.

"If the attitude is to see who blinks first, then the damage is going to be quite devastating," Tata said and added, "What we have asked for is not a bailout. What we have asked for is help from the government to facilitate commercial loans, because the banking system has come to a halt."

With the company spending £400 million a year on research and development or around a third of the UK's total annual investment in automotive R&D, in one of the most modern auto research facilities in the UK, Tata said that without government guarantees, the research and development programmes will and will have a knock-on effect in the future.

He warned, ''If funds are not available, a company will not be able to run. So lay-offs will take place, redundancies will take place or, in some cases, as has already happened in the UK, not with us, plants have been closed.''

Responding to criticism in the UK for seeking funds from the UK government instead of dipping into his own group coffers to tide through the crisis, Tata said ''Since acquisition we've either loaned or converted to equity Jaguar Land Rover's $1 billion over and above the acquisition and if the British government's view is that we liquidate the rest of Tata to resurrect JLR, I think that's unrealistic.'' (See: Tatas to inject funds into Jaguar Land Rover)