Mandelson in talks to bail-out Jaguar Land Rover

The government is in talks with Jaguar Land Rover over a possible bail-out for the struggling carmaker.

Business secretary Lord Mandelson announced he was in intensive talks with the Indian-owned firm, but insisted primary responsibility lay with parent company Tata.

Mandelson said he was talking to numerous carmakers about the state of the industry, and thought it was too early to judge whether state help would be needed at Jaguar Land Rover, which has argued it is under particular strain.

But he insisted there was no “open chequebook” to give money away from the taxpayer’s pocket.

The firm employs about 15,000 workers in the UK, and recently announced it was laying off over 800 IT and engineering staff in the West Midlands by the end of the year in response to severe global car market conditions.

The government is believed to be shaping new criteria for state intervention – including a carmaker’s general viability, the strategic importance of its sector, its technological and research standing and the impact its failure would have on jobs.

Jaguar Land Rover chief executive David Smith said the state of the car industry was a national emergency requiring urgent action.

Tata has not commented on the talks, after announcing it will be sponsoring Ferrari’s grand prix team.