Britain beats off German and US competition in bid to produce `baby' Jaguar

Agreement has been reached to keep the production of all Jaguar cars in Britain. Barrie Clement, Labour Editor, finds unions expressing confidence that the new "mini-Jag" will be made on Merseyside.

The Ford plant at Halewood has been chosen to manufacture the new "baby" Jaguar as part of an understanding reached by union leaders, it emerged yesterday. The Merseyside complex has beaten off bids from rival Ford sites in Germany and the USA to make the new model, union officials have been told.

Final decisions will have to be made by the US-based Ford Motor Company, which bought Jaguar in 1989, but motor industry unions are confident that Halewood will be chosen. It is understood that the boards of both Jaguar and Ford in Britain are behind the Halewood option and it is thought that the ultimate owners in America will rubber-stamp the decision. The American directors met yesterday at their headquarters in Dearborn, near Detroit, but it was unclear whether the Jaguar project was on the agenda.

As part of the agreement struck by unions, management has issued guarantees about the future of existing Jaguar plants in Coventry and Castle Bromwich to meet the concerns of workers there. The Transport and General Workers' Union has been told that existing models will continue to be built in the Midlands towns and that the plants will also manufacture future Jaguar marques. It was accepted, however, that Halewood was the only plant owned by Ford in the UK with sufficient spare capacity to take the new model, which is intended to compete with the BMW 3 series.

Unions concluded a deal with Ford earlier this year which included a promise that a "multi-purpose" vehicle would be built at Halewood and it is understood that that the new mini Jaguar, codenamed X400, will be manufactured on Merseyside instead.

Some industry sources believe the "Ford Halewood" name - with all its past associations with union militancy - might be ditched as part of an attempt to make the project more consumer-friendly.

Tony Woodley, chief negotiator for the motor industry at the transport union, said that the prospect of the "quintessentially British" car being built overseas may have been averted.

"We believe there is a genuine business logic that the new baby Jaguar should be built in the this country. We find it inexplicable and I'm sure the Jaguar-buying public would find it inexplicable if this vehicle was to be built outside the country," Mr Woodley said.

He warned, however, that the final decision would depend on the support the Government could offer. Officials at the Department of Trade and Industry insisted last night there had been no "formal" approach for financial aid under Regional Selective Assistance, but it is known the Government is well disposed towards the project.

Mr Woodley said: "The quality and efficiency of the Halewood plant, coupled with its capacity, leads me to believe that Britain and Halewood should win the day on business logic. It would be in nobody's interests for Jaguar to move outside the UK."

An official statement from Ford said that a study team from Jaguar was still evaluating the potential production sites in Britain, Europe and America. While the evaluation included a review of Halewood, it was too early to speculate on the final outcome of the review.

The statement conceded that management had been in discussions with unions over the implications if Halewood was the choice. "The company has reached a good measure of agreement, but naturally details are still a matter between the company and the unions."

Ford has already backed heavy investment for its Jaguar subsidiary to build a second saloon, codenamed X200, at Castle Bromwich.