Tata, the Indian owner of Jaguar Land Rover, warned of possible further job cuts and plant closures in Britain after its UK operations produced losses of more than £280 million (US$461.9 million) in the last 10 months of the financial year.
“There have already been 2,000 job losses. We may be looking at more job losses, more plant shutdowns,” Tata Motors vice chairman Ravi Kant said.
Any such moves would depend on how the car market developed, he said.
The Mumbai-based motor manufacturer said it had run up consolidated net losses for the year to March of 25.05 billion rupees (US$511.4 million).
A year ago it made net profits of 21.68 billion rupees.
Jaguar and Land Rover had seen profits throughout 2007 and the first half of last year, but Tata said it had been hit by a “global meltdown” after July that had led to demand and vehicle financing drying up.
Sales of Jaguar Land Rover vehicles fell worldwide by 32 percent to 167,000. Tata has shed 1,750 jobs in Britain, leaving it with about 15,000 workers, while introducing a shorter working week and a pay freeze.
The latest dismal news puts more pressure on the company to raise desperately needed money and on the government to agree some kind of cash injection.
But it also underlines the deepening trough at the wider Tata group, which on Thursday said it would probably have to make 2,000 more redundancies in its British steel operations after a 60 percent fall in Tata Steel profits.
The slump in new car purchases has led to cutbacks throughout the global automotive industry which, along with the construction sector, is an important customer for steelmakers.
Two of the three US car manufacturers have already been pushed into receivership, while in the UK British Prime Minister Gordon Brown has been forced to introduce a “old cars for cash” scrappage scheme to try to revive interest in new cars.
Tata is estimated to need about £1 billion in new money by September to keep Jaguar Land Rover afloat without government help and has been looking at a range of options. Lord Mandelson, the UK business secretary, proposed a public cash injection but made it clear strings would be attached, including giving him the right to nominate a chairman.
Tata has switched its efforts to raising its own cash from the capital markets but has hinted that further cost cuts will have be imposed on the business.
Jaguar Land Rover was purchased by Tata 18 months ago for £1.7 billion; although Land Rover sales have been particularly badly hit, Jaguar has done better thanks to the launch of a new model.
The Indian company is also trying to beat the credit crunch by launching the £1,300 Nano, claimed to be the world’s cheapest car.
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