Earlier in May, UK finance minister Rishi Sunak announced “Project Birch,” which was aimed at rescuing strategically important companies or businesses that have been severely impacted by the coronavirus pandemic. However, bailout talks between the UK government and Jaguar Land Rover (JLR) fell through, as the automaker did not qualify for taxpayer support, the Financial Times reported.
JLR was also unwilling to accept decarbonisation requirements that would force it to accelerate its electrification plans. This reduction of fleet emissions will also require the automaker to phase out its range of diesel cars sooner than expected, which currently still make up the bulk of the fleet, the report added.
JLR, along with Tata Steel, the second largest steel producer in Europe (both owned by Tata Group; JLR was bought over from Ford in 2008), will have to rely on private financing to overcome the impact of coronavirus on business. In an email statement, Tata Steel said it “remains in ongoing and constructive talks with the UK Government on areas of potential support.”
Meanwhile, JLR managed to increase its savings target for this year to £2.5 billion (nearly RM14 billon) after booking a pre-tax loss of £413 million (RM2.28 billion) in Q2 2020. It has since entered into agreements with lenders in China for a secured term loan facility of 5 billion yuan (RM3 billion), its first debt financing in China.