UK Wants To Bail Out Jaguar. Financial Times Hates It. With A Vengeance

by Bertel Schmitt

Published: December 19th, 2008

uk wants to bail out jaguar financial times hates it with a vengeance

The Financial Times (sub) is pissed. Pissed at Peter Mandelson, Britain’s business secretary, and his planned bail-out of Jaguar Land Rover. Forgetting the old school of not mixing reporting with opinion, the FT pulls out the flame thrower and blasts away: “It is hard to imagine a less deserving candidate. The luxury carmaker fails the public interest test on two key grounds. First, its products are of questionable social utility. For the government to allocate scarce funds to prop up the production of the 4.2 Litre V8 Petrol Supercharged Jaguar is a nonsense. It has a top speed of more than 150mph, emits 299g of carbon dioxide per kilometre and costs about three times the average annual wage. True, the UK car industry employs 190,000 people directly and supports several hundred thousand more once components and retailing are taken into account. But if Mr Mandelson wants the government to underwrite this £50b industry, he should harness such public funds as are available to develop the green cars of the future, not pander to vested interests.”

Hmmm. Let us remind you: This is not a rabid blog. This is the venerable Financial Times. We kid you not. Would the pink Financial Times be so ferocious if Land Rover and Jaguar still be a company that’s firmly in British hands? We guess not. The FT seems to have issues with the current owners of Land Rover and Jaguar, who happen to sit in one of Britain’s old and long departed crown colonies. After refilling the flame thrower, the FT launches an incendiary attack in the easterly direction:

“The second reason Mr Mandelson should refuse to bail out JLR is that Tata Motors, the Indian company that paid $2.3 b for it, is capable of doing so itself, if it wishes. Tata Motors, let it not be forgotten, is a subsidiary of Tata Group, one of the wealthiest companies on the subcontinent, with revenues of $62.5b and profits of $5.4b last year. The argument that thousands of jobs are at stake is weak: sectors employing many more, such as retail, receive no special treatment. If job protection starts to drive government policy, then the UK would bar Tata Consulting Services, a sister company, from offering the type of business process outsourcing services that have sucked back-office jobs to India in their hundreds of thousands during the past decade. But that would be nutty. Manufacturers are now leaner precisely because they now manage their inventory, process warranty claims and order spare parts through TCS’s offshore centres. The simple truth is that Tata Motors overpaid for a trophy asset with poor prospects. It must sort it out itself.”

Take that, Tata. If you don’t have the money, go back to elephants.

Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

More by Bertel Schmitt

Comments

Join the conversation

2 of 22 comments

Landcrusher on Dec 19, 2008

anthroguy, What makes you think that Tata won't still do exactly that?

Like Reply
TaxedAndConfused on Dec 20, 2008

Looks like its still not decided. Not too surprising as uk.gov has no cash to spare. http://business.timesonline.co.uk/tol/business/economics/article5372774.ece

Like Reply

Recent Comments

SCE to AUX All that lift makes for an easy rollover of your $70k truck.
SCE to AUX My son cross-shopped the RAV4 and Model Y, then bought the Y. To their surprise, they hated the RAV4.
SCE to AUX I'm already driving the cheap EV (19 Ioniq EV).$30k MSRP in late 2018, $23k after subsidy at lease (no tax hassle)$549/year insurance$40 in electricity to drive 1000 miles/month66k miles, no range lossAffordable 16" tiresVirtually no maintenance expensesHyundai (for example) has dramatically cut prices on their EVs, so you can get a 361-mile Ioniq 6 in the high 30s right now.But ask me if I'd go to the Subaru brand if one was affordable, and the answer is no.
David Murilee Martin, These Toyota Vans were absolute garbage. As the labor even basic service cost 400% as much as servicing a VW Vanagon or American minivan. A skilled Toyota tech would take about 2.5 hours just to change the air cleaner. Also they also broke often, as they overheated and warped the engine and boiled the automatic transmission...
Marcr My wife and I mostly work from home (or use public transit), the kid is grown, and we no longer do road trips of more than 150 miles or so. Our one car mostly gets used for local errands and the occasional airport pickup. The first non-Tesla, non-Mini, non-Fiat, non-Kia/Hyundai, non-GM (I do have my biases) small fun-to-drive hatchback EV with 200+ mile range, instrument display behind the wheel where it belongs and actual knobs for oft-used functions for under $35K will get our money. What we really want is a proper 21st century equivalent of the original Honda Civic. The Volvo EX30 is close and may end up being the compromise choice.