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Last Updated: Tuesday, 4 January, 2005, 11:51 GMT
Jaguar negotiates 534m Ford aid
Jaguar S Type
Sales of Jaguar in the US have been lower than expected
Ford is to inject 534m ($1.02bn) into its Jaguar unit, after the UK car maker was forced to revise down the value of its investments by that amount.

Jaguar - ending Coventry production and shedding 1,150 jobs - has dropped an aim to produce 200,000 cars a year, and will stay at the current 125,000 level.

A Jaguar spokesman said: "A programme of recapitalisation has been agreed with Ford Motor for the charge amount."

Negotiations are now taking place on how to carry out the recapitalisation.

Jaguar said it took the 534m charge to cover a writedown on the company's investments, after it lost 601.1m in 2003 - double the previous year's deficit.

'Tremendous faith'

Jaguar is now abandoning its assumption of a strong growth in sales.

In the US, where buyers have been wary and the firm has been hit by the weakening dollar, sales have been falling.

The previously-undisclosed 2003 loss figure, lodged with regulators late last month, left Jaguar with a "negative net worth" of 322m the Jaguar spokesman said, confirming a Financial Times report.

"The numbers reflect the serious nature of the business - we have never hid from that," the spokesman told BBC News.

"The business was recapitalised in 2003, and a new programme of recapitalisation has been agreed with Ford Motor."

He added: "It shows Ford has tremendous faith in the future product strategy of Jaguar, and great faith in the Jaguar brand."

He told the BBC the recapitalisation would not impact on US-based Ford's earnings.

Redundancy plans

The negotiations are taking place just a year after Jaguar received a recapitalisation of 260m from Ford.

In November Jaguar said it was unlikely to break even before 2007, despite ending car production in Coventry.

The group said in September it was ending final assembly at its Browns Lane plant in the city, where it makes its XJ and XK models.

If offered voluntary redundancy to 400 of the plant's 1,900 workers, while 425 would transfer to its Castle Bromwich plant in Birmingham, where it builds the car bodies.

Jaguar will also lose 750 mostly white-collar staff, as office work is merged with Land Rover.



SEE ALSO:
Jaguar workers vote not to strike
13 Dec 04 |  Coventry/Warwickshire
Unions in plea to Jaguar bosses
03 Dec 04 |  Business
MPs debate Jaguar job loss plan
26 Oct 04 |  Coventry/Warwickshire
Jaguar workers accept pay offer
14 Oct 04 |  Merseyside
Jaguar workers backed by Prescott
27 Sep 04 |  Coventry/Warwickshire
Jaguar ends car making in Coventry
17 Sep 04 |  Business


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