Ford considers producing new Jaguar in US
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Your support makes all the difference.Ford will make a new range of Jaguar cars in America unless the Government can provide a multi-million-pound aid package, the company said yesterday.
Executives are negotiating for an £80m to £100m contribution towards a £500m investment in its UK plant that could more than triple Jaguar's output to 100,000 cars a year by the end of the decade.
Jaguar would recruit about 1,000 extra staff to produce a new range of sports saloons in Coventry and Birmingham to rival marques such as the BMW 5-series and the Mercedes C-class.
However, Ford is considering building the cars at its Wixon plant in Detroit where the luxury Lincoln model is produced. The Jaguar, one of the most historic names in British motoring, has never been produced outside the UK, but with the US market buyinghalf the 31,000 cars Jaguar built in 1994, there is growing pressure to cut distribution costs. BMW and Mercedes are already developing their first passenger cars at US plants.
It is understood Ford would prefer to build the cars in Britain, but the final decision would be made on a strictly commercial basis. Alex Trotman, Ford's chairman, has been quoted as telling US newspapers that building Jaguars in the US would be "just fine''.
A Jaguar spokesman said Mr Trotman had made plain that Ford would want a "considerable aid contribution" as a condition to starting production in Britain.
Discussions had begun with the Department of Trade and Industry about getting regional selective assistance for the project, code-named X200. It was hoped a decision could be reached within three months, he said Last March Jaguar received a £9.4m grant to deter Ford from moving assembly of XJS sports cars from Britain to Portugal.
The DTI declined to discuss details, but emphasised that aid was always phased in over a number of years and was tied to job creation. The DTI's regional aid budget this year is £101m, compared with £89m last time.
Jaguar has not made a profit since Ford bought it for £1.6bn in 1989. But the UK company, estimated to have cost Ford £3bn in investment and accrued losses so far, is expected to have reached break-even in the final quarter of 1994 when figures are released next month. Jaguar's production this year is forecast to reach 39,000.
Jaguar says the new small car will be as luxurious as existing bigger models, but will cost less than the current ranges, which are priced at between £29,000 and £70,000. Production is expected to begin in 1998.
Outlook, page 17
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