Wednesday, June 13, 2007

Our chance to learn to love the buy-out bogeyman

FINANCIAL TIMES

Ford Motor’s plans for the sale of Jaguar and Land Rover are barely off the drawing board and problems are building up on the production line. Talks about the future of the two marques are at a very early stage, yet the buy-out bogeyman is already haunting the debate. If “asset-stripping” private equity firms are among the buyers, union leaders say, the government must step in to “protect” the companies.

Corporate change in the UK automotive sector always leads to union agitation – and government embarrassment. Before the 2005 election, ministers offered a £110m bridging loan to try to sweeten a Chinese rescue deal for MG Rover, and then, when the company collapsed, lent it £6.5m anyway. In 2004, Tony Blair and Gordon Brown stepped into a dispute between Ford and the unions over plans to stop production at Jaguar’s Coventry plant, to little avail: car production at the historic factory ended last year.

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