Land Rover boss Phil Popham says that the firm "is not even considering" an alternative to UK government guarantees on crucial loans, despite speculation over the last 24 hours that the deal is on the brink of collapse.
Jaguar Land Rover's owner Tata wants the UK government to guarantee a £340m loan from the European Investment Bank, as well as trying to secure a slice of the £2.3bn that's been made available to help British-based car manufacturers. But there has been intense speculation that Tata is unhappy with conditions being placed on the deal, including the government having a seat on the board.
Speaking at the Barcelona motor show, where Land Rover is showing the new Range Rover, Range Rover Sport and Land Rover Discovery, Land Rover managing director Popham told Autocar, "From our point of view, nothing has changed. There’s been speculation over the last two or three weeks about what is happening with the deal, but we continue to talk with the government and continue to work with them so they can conduct due diligence to promote the loan guarantees or access to the European investment bank and potentially extra funding."
When asked what would happen if Jaguar Land Rover were unable to secure the loan guarantee, Popham said, "We’re not even thinking about that. We’re assuming at the moment that we will get the guarantee because that’s all we’ve been working towards." He refused to confirm or deny that the government is asking for a seat on JLR's board, however.
"We’ve been consistent in our message that we’re not looking for a bail-out but a commercial loan at commercial rates, to allow us to continue investing in exciting new technology," added Popham. "Without access to funds, we cannot invest at the same rate as we have been for the past two to three years. The government is looking to guarantee the loans using public money, so it is only right that they are given time to conduct appropriate due diligence.
“We’ve taken some pretty drastic action when we recognised what was happening in the market. It became apparent last autumn what was happening and we realised we couldn’t afford to have inventory lying around, so we made massive cuts at all of our three plants - so much so that by the time these three products [the new Range Rover, Range Rover Sport and Discovery] go on sale, we will be below ideal levels of stock. That gives us the opportunity to have a great launch, though, and ensure that values of cars remain high.”