Jaguar in bailout talks

Ministers have held discussions with Jaguar Land Rover over the possibility of state assistance for the car maker, Britain's Business Secretary Peter Mandelson has said.

But he stressed that the West Midlands-based firm’s Indian owners Tata had “the first responsibility” to ensure its survival and warned that the British government did not have “an open cheque-book” to bail out ailing private companies.

Mandelson said it was too early to judge whether state help would be needed at Jaguar Land Rover, which employs around 15,000 in the UK, or other parts of the British automotive sector.

The company announced last month that it was laying off around 850 IT and engineering staff in the West Midlands by the end of the year in response to “severe” global car market conditions which are affecting the whole of the sector.

Mandelson told Sky News: “I’m talking to the car manufacturers. We are analysing very carefully what is going on in the sector and we will make good judgments in good time if it is appropriate for the government to take any action or if it is possible for us to do so.

“We are looking at the sector as a whole. I have had discussions with the owners and management of Jaguar Land Rover in particular, because they argue that they are under particular strain."

Mandelson warned that not every private company which gets into difficulty can expect Government help.

While he warned that there will not be “a great long list of industrial bail-outs”, he appeared to indicate that car makers might have a case for help.

“The car sector – car manufacturing – is a centre of real excellence and competitive strength in our country,” he said.

“It is not just the car makers themselves and all those employed directly in the production of cars, it is the huge supply chain of many small and medium-sized enterprises that supply components and other elements to that very important manufacturing process."