Selling your classic car? It's FREE to list your car on Honest John Classics | No thanks

Ford to make £500m Jaguar investment

13 July 1995

THE INDEPENDENT
Russell Hotten

US car group Ford is tomorrow expected to unveil plans for a £500m investment to build a new Jaguar car in the UK after being promised an aid package worth about £80m from the British government. Ford directors meet later today in Detroit, where they are due to officially approve the investment, which will create around 1,000 jobs and secure the future of the luxury carmaker in Britain.

The US car giant threatened to produce the new small car - a rival to the BMW 5-series and Mercedes S-class - in America unless it received government money. A powerful lobby at Ford still favours making the car in America, which will be its biggest market, but the company has in effect got what it asked for and few people doubt it will be produced in Britain.

The Department of Trade and Industry is preparing to announce details of the grant tomorrow morning, timed to coincide with a visit by the department's new Secretary of State, Ian Lang, to Birmingham, where Jaguar has a plant. The aid package has been cleared by the European Commission.

While the news is a big investment in the British motor industry, the decision to give aid is likely to be controversial. General Motors, tipped to begin production of a new small car at its Vauxhall plant at Luton in two or three years, would almost certainly demand a grant as a condition.

Charles Golding, managing director of Vauxhall and a member of the GM board in America, said to the Independent recently: "If Ford got a grant, why shouldn't we? All we ask is a level playing field."

And Japanese motor manufacturers, which did not get grants when they set up UK manufacturing sites, may also raise their eyebrows. "How they could get this through the competition regulators is a mystery to me," said a director of one Japanese company.

However, the DTI will argue that the grants have helped to secure the long-term future of Jaguar in the UK, and will be dependent on Jaguar meeting its promise of creating hundreds of jobs. Jaguar says the project will create 1,000 jobs, though it is estimated that the spin-off work for component suppliers should create another 5,000 jobs.

The grant is by no means the largest regional aid package, though it is unusual for a company already established in the UK to win such a large sum of RSA aid. Last year Samsung received £58m towards building an electronics plant. And in 1975 Ford UK was given £75m.

Ford's investment in Britain comes at a time when Jaguar sales are soaring, and the luxury carmaker is expected to return to profit this year. The new small car, codenamed X200, will go into full production in 1999 at a rate of about 100,000 vehicles a year. Jaguar currently produces 50,000 cars annually. The car will probably be made at Jaguar's body plant in Birmingham, rather than the assembly factory in Coventry. Much of the design and development of the new car will be done in the UK.

More news from the archive

Tue, 07 Mar 1995
THE INDEPENDENT RUSSELL HOTTEN Rover Group returns to the sports car market today with the revival of its famous MG marque, in a...
Wed, 08 Mar 1995
THE INDEPENDENT RUSSELL HOTTEN Land Rover achieved record sales of all three models in the first two months of 1995, in contrast...
Wed, 15 Mar 1995
This day in history – from the daily news archives. THE INDEPENDENT A year along the road, BMW has radical plans, writes Russell...
Sun, 11 Jun 1995
THE INDEPENDENT JOHN FORDHAM IF I OPENED my front door right now and found a suitcase containing £30,000 in used twenties smiling...
Fri, 23 Jun 1995
DAILY EXPRESS NEW CARS PILE UP IN ROVER STRIKE More than 2,500 new Rovers are baking in the sun at a long-term car parkcreated by...
Fri, 14 Jul 1995
THE INDEPENDENT RUSSELL HOTTEN Jaguar, which will today confirm a £500m plan to produce a new model, is to build the production plant...
Tue, 01 Aug 1995
THE INDEPENDENT IN BRIEF : Boerio gets Jaguar job Jaguar has appointed Bibiana Boerio, 41, as finance director to replace John...
Wed, 02 Aug 1995
THE INDEPENDENT Russell Hotten BMW, the German motor group, hinted at the further expansion of Rover Group yesterday, saying the...
Mon, 21 Aug 1995
THE INDEPENDENT THE MONDAY INTERVIEW: BIBIANA BOERIO Russell Hotton It is a good time to be on the board of Jaguar and new finance...
Sat, 09 Sep 1995
THE INDEPENDENT Car industry: BMW's newly-appointed hard man expected to make waves during restructuring RUSSELL HOTTEN Stung by...
 

Compare classic car insurance quotes and buy online. A friendly service offering access to a range of policies and benefits.

Get a quote