September 07, 2008

TATA Motors bid for Jaguar and Land Rover backed by unions

It is reported that TATA Motors’ bid for Jaguar and Land Rover received a potentially important endorsement from union shop stewards at the two brands, which Ford Motor is selling. Union backing, while not essential, is seen as important for the politically sensitive deal.

Mr Tony Woodley general secretary of Unite said that the union stewards had made clear their preference to remain part of Ford. However, if a sale went ahead, the workforce’s best interests would be served by finding a partner with an established presence and background in manufacturing. The union said that “Based on serving the best interests of the union members at Jaguar Land Rover, the stewards agreed that TATA best fits these criteria.”

The statement followed presentations to union representatives in London by short listed bidders TATA, Mahindra & Mahindra and buy out group One Equity Partners, whose bid is being led by Mr Jac Nasser, former CEO of Ford. At the meetings, union representatives questioned the bidders about their plans for the two brands, including the possible moving of jobs offshore or other functions now based in the UK.

Some Jaguar Land Rover employees have voiced concerns that an Indian buyer might outsource key engineering or other functions to India or change the two brands’ supply arrangements in the UK. According to a person familiar with TATA’s presentation, the carmaker committed to the 2 brands as a long term investment and endorsed the two brands’ management.

Ford had previously pressed bidders to make undertakings on jobs and plants at the two brands. While, Jaguar fell into financial losses in part because some consumers disliked it’s extensive sharing of production and parts with Ford’s own brand vehicles.