Page last updated at 16:59 GMT, Wednesday, 26 March 2008

Tata takeover drives welcome relief

By Nils Blythe
Business correspondent, BBC News, Castle Bromwich

Jaguar and Land Rover Signs

Being taken over is a stressful experience for employees.

Rumours about the identity and intention of the buyers swirl around.

And for employees of Jaguar and Land Rover the uncertainty has continued for many months.

So the announcement of the details of Tata's takeover of two of the best-known names in the British motor industry has been greeted with relief at Jaguar's Castle Bromwich factory on the outskirts of Birmingham

"It's been very tense", according to Mickey Livingston who has worked for Jaguar for 30 years.

"Today the tension has been lifted."

And that feeling is echoed by others who work here.

We've now got some beautiful motor cars and we think that the future looks rosy
Terry Fitzgerald
Jaguar employee

Trade union leaders say that they have been given written guarantees on the future for jobs and factories.

They are also reassured that 300m is being paid into the companies' pension schemes

Terry Fitzgerald - another Jaguar worker with 30 years' service - described the mood as "very confident".

"We've now got some beautiful motor cars and we think that the future looks rosy for us."

Intense competition

But Tata faces huge challenges.

Jaguar has made losses ever since Ford bought it in 1989.

Company sources say those losses are being trimmed with the launch of new models.

But everyone at Castle Bromwich accepts that Jaguar faces intense competition from much bigger carmakers such as Mercedes, BMW, Audi and Lexus.

Tata must "decide what Jaguar is for and what is its strategic direction in the future", according to industry analyst Jay Nagley.

It will need heavy investment in future to hold its own against the German companies which increasingly dominate the luxury car market, he says.

And a further cost will come from the European Union's proposed controls on carbon emissions.

Because the rules are framed in terms of average emissions for each car manufacturer, they will be particularly tough for Jaguar and Land Rover whose vehicles all have large engines.

The company has no smaller cars in its range to lower the average unlike - for example - Volkswagen.

Re-engineering the Jaguar and Land Rover models for a new era of much lower carbon emissions may prove the biggest challenge of all.

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