Jaguar Land Rover and Tata Steel UK bailout talks end
Talks between Jaguar Land Rover (JLR), Tata Steel and the UK government over a proposed bailout to mitigate the impact of the pandemic have fallen through, the Financial Times reports.
The talks, which aimed at securing government support under the UK's Project Birch plan to bail out strategically important companies, are said to have ended because JLR didn't meet the requirements to qualify for taxpayer support.
However, the report also suggests JLR management was unwilling to meet requirements to decarbonise its fleet further in order to obtain financial support. The requirements would've meant a significantly accelerated electrification plan and the need to phase out diesel engines (both brands' core propulsion method in terms of sales) far sooner.
Tata Steel, a subsidiary of JLR parent company the Tata Group, said in a statement that it "remains in ongoing and constructive talks with the UK government on areas of potential support". However, the Project Birch funding scheme is said to unfeasible for the firm, due to the conditions companies have to meet to qualify for it. JLR has yet to respond to the report.
JLR recently reported a "significant impact" from the pandemic and associated lockdowns in its quarterly results. Sales volumes fell by more than 42% year on year from March to the end of June, and a £413 million loss was reported.
As a result, the company has increased its cost reduction target by another £1 billion to £2.5bn for this full financial year. However, JLR also notes "particularly encouraging" sales recoveries in China and North America, while 98% of its global plants have resumed production.