Jaguar / Land Rover & Tata

I’m writing this post in the context of hearing on the news that Lord Mandelson has placed a call, this morning, to  Bombay House, the Tata HQ in India.

I was speaking with a senior government figure, who’s involved in this matter, two evenings ago at a Whitehall pub in which he began enquiring as to what the Tatas would do if the UK Government refused to lend them the £1bn bailout they’ve requested for Jaguar / Land Rover.

To say that the Tatas have no other options would be misleading, as it wasn’t so long ago that the media reported that they had deep pockets and more importantly the intent on making the new venture a success. Let’s also not forget that within the Tata Group, there are a couple of companies which can only be described as ‘cash cows’, such as TCS, the IT firm from which they can divert resources to the benefit of Jaguar / Land Rover.

However, what I found interesting was his take on the cultural differences between the parent and child. He suggested that the Tata’s weren’t used to a culture where their plans would be stress tested and scrutinised as, in their opinion, their track record, trust, and their brand should prove to be enough of a guarantee for the UK taxpayer.

I disagree with the suggestion that the Tatas are naive and culturally backward. The Tata’s have been in the UK for more than a century and employ almost 50,000 people here in some of the most intensive and unloved sectors of the economy. As a result of their experiences here, they would understand the nervousness of the Government and therefore not take it as an affront to their heritage if certain questions were asked. After all, they understand that government money, ultimately is raised through taxation – our money.

With that comes responsibility. The Tata’s understand that, all too well.