It is a known fact now that the global auto manufacturing industry is struggling. Once identified as a pride of an industrial nation, the automobile industry is now facing financial liquidity problem. The bailout package put forward by President Bush of US gave a breather for the Detroit based auto manufacturers. However, there are more market players who are still struggling to find liquid cash to run its business. Needless to forget Toyota is making history by filing its first ever loss in its balance sheet. The situation with the “first industrialised nation” is not a shining star. UK’s car manufacturing industry too is struggling due to the liquidity crisis.
It has became a history now that Indian conglomerate Tata group purchased the Jaguar Land Rower from Ford during first quarter 2008. The current situation with JLR is very bleek. The JLR union has mentioned that the company need funds from the government within days and not weeks. It can be speculated that the compan might file bankruptcy provided it get financial aid either from the owners or from the government. However, the business secretary, UK has mentioned the owners that the government is not having “an open cheque book” policy. This might mean that the government is not very keen to spend the tax payers’ money in a business whose future is still unpredicted. This behaviour is in stark contrast to what US government has done to safeguard its automobile industry. Neither UK government has asked the industry players to submit an action plan similar to Bush’s government nor did they give any confident boost.
Do the Brown’s government want to save its automobile industry? Do they think JLR’s problem is now TATA’s headache and not UK’s? Is JLR now branded as an Indian company just because some nine months ago the company was purchased by an Indian family? Is the government expect bailout from a poor nation (as stated by them) to save its pride? If Tata fails to provide liquidity then what is the situation of the thousands of employees working with JLR? Is automobile industry a core business for UK now?
Needless to say that the government is also keenly looking at the TATA group and its move in the current scenario and is asking them to act before anything done from their side. However, if TATA group has successfully managed the current situation through providing a bailout and work closely with the government in solving the issue it has the potential to act as a major boost for the group's business. Tata group is currently a well recognised Indian conglomerate business in EU. Has the group successfully solved the issue this might bring in more business from EU region. TCS, the software arm of the group can utilise the situation to seal contracts in the region. It is already clear that the group is trying to build its hold in EU with its two major acquisition one through Tata Steel (Corus bidding) and other through Tata Motors (JLR). Hence, in a long term the company can aim to seal more acquisitions in EU region with minimizing the resistance from unions.
Nevertheless, only the politics and the future can answer the questions with respect to the bailout and automobile industry. Let us wait and watch the melodrama of bailing out automobile industry now in UK.
It has became a history now that Indian conglomerate Tata group purchased the Jaguar Land Rower from Ford during first quarter 2008. The current situation with JLR is very bleek. The JLR union has mentioned that the company need funds from the government within days and not weeks. It can be speculated that the compan might file bankruptcy provided it get financial aid either from the owners or from the government. However, the business secretary, UK has mentioned the owners that the government is not having “an open cheque book” policy. This might mean that the government is not very keen to spend the tax payers’ money in a business whose future is still unpredicted. This behaviour is in stark contrast to what US government has done to safeguard its automobile industry. Neither UK government has asked the industry players to submit an action plan similar to Bush’s government nor did they give any confident boost.
Do the Brown’s government want to save its automobile industry? Do they think JLR’s problem is now TATA’s headache and not UK’s? Is JLR now branded as an Indian company just because some nine months ago the company was purchased by an Indian family? Is the government expect bailout from a poor nation (as stated by them) to save its pride? If Tata fails to provide liquidity then what is the situation of the thousands of employees working with JLR? Is automobile industry a core business for UK now?
Needless to say that the government is also keenly looking at the TATA group and its move in the current scenario and is asking them to act before anything done from their side. However, if TATA group has successfully managed the current situation through providing a bailout and work closely with the government in solving the issue it has the potential to act as a major boost for the group's business. Tata group is currently a well recognised Indian conglomerate business in EU. Has the group successfully solved the issue this might bring in more business from EU region. TCS, the software arm of the group can utilise the situation to seal contracts in the region. It is already clear that the group is trying to build its hold in EU with its two major acquisition one through Tata Steel (Corus bidding) and other through Tata Motors (JLR). Hence, in a long term the company can aim to seal more acquisitions in EU region with minimizing the resistance from unions.
Nevertheless, only the politics and the future can answer the questions with respect to the bailout and automobile industry. Let us wait and watch the melodrama of bailing out automobile industry now in UK.
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