Christine Buckley, Industrial Editor
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The leader of Britain’s biggest union yesterday called for government intervention to prevent private equity taking over Jaguar and Land Rover.
Tony Woodley, joint general secretary of Unite, said if private equity were the only choice for the two famous British brands then ministers must try to stop the sale. “If the choice is only asset-stripping private equity which independent studies for the union have shown drive down pay and conditions then there should be direct government intervention.”
Unite is arguing that the car industry should be treated as strategically important because of the job it supports directly and in the supply chain and the local economy. It estimates that for every direct job in a car manufacturing plant there are two dependent in components makers and other suppliers.
Ford yesterday confirmed that it had appointed financial advisers – Goldman Sachs, Morgan Stanley and HSBC – to look at the future of the two marques. A spokesman said: “We are working with advisers to determine the best future for Jaguar and Land Rover.”
The move comes only months after Ford sold Aston Martin in a widespread restructuring to try to restore it to profitability. Last year the US giant lost $12.7 billion. Its Premier Automotive Group, which includes Jaguar, Land Rover and Sweden’s Volvo, is profitable but that is believed to be on the back of Land Rover and Volvo with Jaguar remaining stubbornly loss-making.
Ford is expected to want between £3 billion and £4 billion for the two brands. They are likely to be sold together because of the integration that Ford has implemented. The two divisions share components, design and production and research facilities. The Prime Minister’s spokesman said that the Government had been in touch with Ford. He said: “We still believe that both Land Rover and Jaguar are highly successful companies and will have a highly successful future.”
Alistair Darling, Trade and Industry Secretary, yesterday spoke to Lewis Booth, head of Ford Europe, to emphasise the importance of the two brands remaining in Britain.
A spokeswoman for the Department of Trade and Industry said: “We believe Jaguar and Land Rover are very important to the country. It is also important to keep people informed as to what is going on over the coming weeks.” But she ruled out intervention, saying that a sale would be a matter for the company.
Unite is also pressing for a meeting with Mr Booth.
Garel Rhys, automotive expert at Cardiff University Business School, said there were doubts about private equity in the motor industry because of the long lead times involved in developing new products. But he said private equity companies were the ones most likely to be involved because most of the large car companies are either in difficulty, have overcapacity or are already represented in the same segment of the market as Jaguar and Land Rover. But he added: “If Ford, with all the resources it has had, has not been able to make a success of the two brands, people looking at them must wonder what they can do.”
Unions fear that private equity would impose harsh cost cuts and job reductions on the businesses.
Top marques
Jaguar was founded by Sir William Lyons in 1922 and he gave the business its name in 1935. It merged in 1966 with British Motor Corporation and was later floated separately in 1984. Ford bought Jaguar in 1990
Land Rover was a division of Rover and launched its first four-wheel-drive vehicle in 1948. The Range Rover was released in 1970 and the Discovery in 1989. BMW bought the company in 1994 and sold it to Ford six years later
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Tony Woodley said if private equity were the only choice for the two British brands then ministers must try to stop the sale
Toyota would kill to have the Jaguar panache!! I must say that I have enjoyed my Jaguar here in America. I traded in my Lexus (horrible car with problems..really!) and bought a Jag. It has been a wonderful reliable car. I sincerely hope that somehow, the British people and British industry find a way to keep this marque and grow the company. Britain, it is one of your icons. Besides, I want to buy another one someday.
H Jones, Atlanta, USA/Georgia
Let the government buy them, after all look at the great job that the government did with the MGB and Triumph motor cars and the BSA and Triumph motorcycles.
And the workers can celebrate their jobs, just as those that worked at the above companies do every day
Dave, Orangevale, California, USA
LandRover has been keeping Jag afloat for the past few years now and Ford have joined both companies so tight that they have to be sold as one .That is why we are all going to be out of work shortley .
JASON, SOLIHULL, UNITED KINGDOM
Noooo! If the business is not viable, why on earth should our taxes pay to keep the employees in pretend-work? It would be cheaper to close the place and just pay them all a pension! If it is viable, sell it to someone who can run it. Civil servants can't run anything, as we all know all too well.
Isn't it odd to see the union men still stuck in the 1970's?
Roger Pearse, Ipswich, Suffolk
Well I'd comment but ah Barry beat me to it.
Well done chap !!!!
Adam, Prior lk,
I love the way the Unions always turn to the government to bail them out when it has mostly been their fault that help was needed.
For 30 years Longbridge got a free ride from the government.
For at least ten years BL existed on government money although it must be admitted that the standard of management was quite appalling.
Jaguar and LandRover are the last glimmer of a once great British Industry killed by staggering stupidity and greed.
Minnie, LA, , USA
The unions are bleating yet again, they should have give
thought to the damage they have done to the car industry
through the fifties, sixties,seventies, and into the eighties
they systematically decimated the industry. Thats why
we are now looking at the last of the line, the only
cars manufactured in the country will be Japanese.
Well done the unions.
Barry Holmes, Christchurch, New Zealand
As a Land Rover pensioner I am concerned that a company that is of strategic value to the UK is to pass into the hands of people who will only want the company to asset strip it despite being it highly successful in producing both military and civilian vehicles.
If companies such as Land Rover are considered to be expendable by government what hope is there for any leading brand manufacturers remaining in the UK or indeed remaining in existance.
Like ship building, tank manufacture even Royal Ordnance, strategic industries are passed to foriegn control by mediocre politicians who have no experience of industry and very little common sense.
Mr R Johnson, Hartley Wintney, U.K.
Yet again the unions have done a superb job of hiding ligitmate concerns amongst a tirade of stupidity and nonsense relating to private equity. Many PE deals have substantially increased the number of people working in the organisations concerned. The only way to secure the long term viability of any company is to ensure it is profitable... Jaguar is not and major surgery may be required. If the unions continue to oppose change, in the long run there will be no Jaguar. Mr Woodley, please try and be rational.
Graeme, London, UK
The media are all jumping up and down regarding the 19,000 workers at Landrover and Jaguar but what about the 40,000 + workers in the support industries that make everything from nuts and bolts to leather seats that go into these cars.The network of labour that supports this industry is a much bigger picture than the actual workers at the plants.
Sectors that involve everything from transport,warehousing,
small , medium and large component manufacturers to local newsagents will all be affected. It would be unthinkable what would happen to the local imediate areas surrounding the plants and many surrounding areas of the West Midlands.
It has been mentioned that the land at Solihull is valuable for new housing.A high percentage of people who live in this nice area work at these plants and add to the local economy.If they had no jobs to go to, who would be buying all this new property?
I dearly hope in the future, I dont see a RangeRover with "Made in China" stamped on the underside!
Pete, Cannock, UK
back to the days of BLMC? The unions must be joking, or have memory loss - failing to remember what their shop stewards did to the English motor industry - eventually helped by the abdication of the leaders who were supposed to be the managers. A reputation for poor quality in build and unreliability of components has dogged Jaguar for generations. Having, like others - have been bitten and clawed here by past Jaguars, I would not want another and remain with German cars - in general long lived, and designed for maintenance (not much required) as well as for production - an old English failure dating back to some warplanes of WW2 if not earlier. Far better now, but can Jaguar live down its past? In earlier days there was complacency and lack of interest in modification for overseas and "colonial" markets.
Donald MacDONALD, Brisbane , Australia
What better statement of unonism could you imagine? No mention of the customers, terrified of competition and, still, of the belief that Whitehall bureaucrats can run a car factory better than businessmen. Pitiful.
mark , dubai, uae
Sounds like the Rover reprise; where unions and the Government supported the sale to the Phoenix Consortium and opposed the acqusition of MG by Alchemy.
MG Fan, London,