The ongoing global recession is forcingMotors Ltd. Chairman Ratan Tata to seek financial aid from the U.K. government in order to keep the auto maker’s Jaguar Land Rover division afloat.
In an interview with the U.K.’s Sky News, Ratansays if JLR is unable to secure the £500 million ($736 million) it is seeking from the government, “the damage is going to be devastating.”
JLR, which was acquired by India’s Tata last year for $2.3 billion, already has laid off 450 workers this year.
Additionally, workers at six U.K. JLR sites earlier this month agreed to a reduced workweek and pay freeze in order to save their jobs.
Despite the sacrifice by workers, Ratan Tata says without government assistance, “the company will not be able to run, and layoffs will take place; redundancies will take place.”
However, the urgency in Ratan Tata’s plea apparently has not resonated with U.K. government officials. Business Secretary Lord Mandelson is quoted as saying that as a private company, JLR should seek loans from British banks and the European Investment Bank.
JLR says a range of support measures are needed from the government for the automotive industry in the U.K., from which auto makers, suppliers and dealers can benefit.
“This would clearly include Jaguar Land Rover,” JLR says in a statement. “These actions are required because the banking system, in not functioning normally for industry and consumer demand, is extraordinarily weak as a result of the global banking crisis.
“The actions could include short-term loans and loan guarantees, investment support in environmental technologies and access to financing.”