On its ninth life, the old cat still purrs along

It would be a real pity to see Jaguar croak it just as it starts to produce some really impressive cars, writes Mark Nichol

It would be a real pity to see Jaguar croak it just as it starts to produce some really impressive cars, writes Mark Nichol

IF THE pre-Christmas hyperbole regarding Jaguar’s imminent apocalypse was entirely true, the big cat’s ninth life should surely be spent by now; Lord Mandelson still shows no signs of opening the chequebook marked “HM Treasury bailout fund”.

In fact, Jaguar posted a €393 million operating profit for the first six months of 2008 – making it more of a fat cat than one on its last legs. And last year’s XF saloon is widely regarded as one of the best in the business (and about to get better).

But, despite that, Jaguar closed its production line for almost a month over Christmas due to tumbling demand. It’s also about to see 500 employees walk away at the end of this month on voluntary redundancy – and there could be more to come.

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But no, it absolutely did not ask for a bailout. Rather, it backed the Society of Motor Manufacturers and Traders’ request for liquidity loans from the state – cash that would ordinarily come from the banks.

“It’s not like the situation in the US,” says Don Hume, Jaguar Land Rover’s (JLR) director of corporate and governmental affairs.

“We’re only impacted because the banks aren’t doing what they’re supposed to be doing. Businesses can’t get credit for the day-to-day things, nor can the suppliers, nor can dealers, nor can customers.”

So, Jaguar must dip into profits that would ordinarily be used for research and development to provide its operating cash flow. And that causes a big problem: “We need to be investing in research and engineering, so that next year we’re competitive,” says Hume.

“Our competitors are now benefiting from government aid. Germany, Sweden, France China and Australia all now get support. The UK Government hasn’t approached anyone with similar funding,” he added.

This “absolutely desperate” financial situation not only affects JLR’s 15,000-strong workforce, but the 60,000 employees directly supported by the manufacture of Jaguars and Land Rovers too. The economic impact of a JLR collapse would be massive; over €5 billion in export revenue is generated by the firm every year.

This, says Hume, is why Jaguar is singled out as a beleaguered “basket case” when it is simply one of many backing the proposals – because it’s so important, so famous.

And it’s ironic that the most recent round of new technology coming from Gaydon was unveiled this weekend in Detroit.

It’s some impressive technology, too. From March, the venerable XF will get brand new V6 diesel and V8 petrol engines. The latter is almost an irrelevance here in Ireland, no matter how excellent.

Thankfully, the former is something of a marvel as well. With power outputs of 238bhp or 271bhp, the new twin-turbo diesel is quicker, cleaner and more efficient than the 2.7-litre unit it replaces.

Jaguar has also hinted that soft and full hybrids are in the works, as well as all-electric vehicles and a brand new XJ replacement next year – though they could all stall dramatically now.

JLR’s latest owner, Tata Motors of India, is either unwilling or unable to stump up the cash, but surely knows it has a carmaker in the ascendancy on its hands.

How sad it would be, then, if after decades of frankly average products and mismanagement, the old cat was allowed to croak at its peak.