UK government seeks to take control of Jaguar Land Rover
The UK government is this evening accused of trying to take over Jaguar Land Rover by the "back door". The authorities are demanding control of the day-to-day running of the business in exchange for securing an £800 million rescue package even though the business is currently owned by Tata of India. However, the government's demand for the right to choose the chairman, take a seat on the board and hold a veto over investment and employment issues looks like killing the deal stone dead.
Ironically, the government is not even prepared to put up any of the rescue package funding and is only acting as a go-between for the banks and the business. The authorities have also promised to guarantee loans from the European Investment Bank as the situation at Jaguar Land Rover appears to be worsening by the day. Many people will point towards the significant union control of the UK car manufacturing industry and the fact that the government is now trying to curry favour with the unions.
This is a very dangerous precedent for UK government to set as it could effectively scupper a number of potential rescue packages in the future.
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