Is the government being railroaded into supporting Jaguar?
The UK government is this evening under intense pressure from both the owners of Jaguar Land Rover as well as unions throughout UK to forward a £500 million loan to the company. There are suggestions that behind-the-scenes pressure is starting to build and the government looks set to give in with a further injection of taxpayer's money into the ailing UK economy. Quite what the terms and conditions of any agreement may be remains to be seen but there certainly seems to be a softening of the way behind the scenes.
As we have commented on a number of occasions the injection of £500 million of taxpayer's money into a loss-making operation such as Jaguar Land Rover would not normally make commercial sense although there are other considerations. Not only are there literally thousands of jobs at risk if the car manufacturer was to go under but there are also many more thousands of jobs connected to the company with regards to supplies, etc.
The government appears this evening to be weighing up the cost of letting a business the size of Jaguar Land Rover go under against the added pressure on government budgets to support those who may lose their jobs. This careful balancing act will determine if any assistance is forthcoming and the terms of such help.
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