TATA WINS UNION BACKING IN JAGUAR, LAND ROVER SALE
By Dipankar De Sarkar, London, November 22, 2007 (IANS)

In a major victory for India Inc., Britain's largest manufacturing union that represents Ford has backed a bid by India's Tata Motors to buy out the luxury car brands Jaguar and Land Rover. Although no figures were mentioned, Merrill Lynch, the financial advisors, earlier this year estimated that joint sales of Jaguar and Land Rover would fetch Ford between $1.3 and $1.5 billion.

The important union decision, conditional on owners Ford Motors Co. going ahead with the sale, comes as a significant boost to Tata's successful strategy of global expansion and follows its landmark acquisition of the Anglo-Dutch steelmaker Corus in January.

Tony Woodley, joint general secretary of the manufacturing workers' union Unite, said Wednesday evening the union's shop stewards had made clear their preference to stay as part of Ford but that if a sale was decided, they felt "the best interests of the workforce would be served by finding a partner with an established presence and background in manufacturing."

"Based on serving the best interests of the union members at Jaguar Land Rover, the stewards agreed that Tata best fit these criteria," Woodley said in a statement. He said the stewards had made their decision based on the reports from the presentations made by all the shortlisted bidders from the union representatives who attended.

Woodley's statement came a day after the three main bidders for the iconic British brands made their presentations to representatives of the powerful union at Land Rover's factory in Solihull, a manufacturing town about 170 km northwest of London. About 60 senior shop stewards representing workers at Jaguar and Land Rover are reported to have voted for Tata's bid over those of a second Indian company, Mahindra & Mahindra, and One Equity, a J.P. Morgan-owned buyout group led by former Ford chief executive Jac Nasser.

In his presentation, Tata Motors Managing Director Ravi Kant is said to have assured workers that they had no plans to outsource certain British jobs to India and that brand executives were free to stay on if they wanted to. The Tata presentation was said to be "very impressive." Union backing for the Tata bid is key to sealing the deal amid the beginnings of creeping protectionist sentiment in Britain, with even pro-globalisation Prime Minister Gordon Brown recently calling for "British jobs for British workers."

With up to 40,000 jobs said to be at stake, union officials have been involved in the sale from the very start and they, in turn, have kept the government involved and informed. There are some 16,000 workers directly employed in manufacturing the two cars - Land Rover employs 8,300 workers mainly at Solihull in the West Midlands and Gaydon, Warwickshire. Jaguar employs 7,300 people, concentrated at Castle Bromwich, near Birmingham; Whitley, in Coventry, and Halewood on Merseyside, where it shares production with Land Rover.

But Unite spokesman Andrew Dodgeshon told IANS that another 20,000 jobs are held in ancillary units. The union, which sees both Jaguar and Land Rover as manufacturing units of "strategic importance" to the British economy because of the number of jobs and specialist skills involved, has had two key demands from the very start.

It wanted no outsourcing of British jobs and it was keen to see Ford, the world's third largest automaker, take an equity stake in those units that supply components - including engines - to Jaguar and Land Rover. In fact, it was pushing for a 10-year contract for Ford's supply units.

With the winning bid set to be announced sometime in December, Ford did not comment on the union choice Wednesday, but a spokesman stressed what he called "our responsibility to our employees."

Ford acquired Jaguar for $2.5 billion in 1989 and Land Rover for $2.75 billion in 2000 but wants to sell them off by early 2008 as it wants to concentrate on its North American operations, which contributed heavily to a record $12.6 billion loss in 2006.