Halewood secures baby Jaguar with pounds 50m DTI grant

The British motor industry received a huge boost yesterday as a pounds 50m government grant secured production of the new baby Jaguar for the Ford Halewood plant on Merseyside while Toyota prepared to announce a multi-million pound expansion of its Deesside engine factory. But the good news was tempered by a warning of a further shake-out from the Ford chairman Alex Trotman, who said the world's car-makers suffered 40 per cent excess capacity, most of it in Europe.

Michael Harrison in London and Gavin Green

in Detroit report.

Production of the new small executive class Jaguar, codenamed the X400, will begin in 2001 and rise to 100,000 cars a year, 60 per cent of which will be sold in Europe. The pounds 400m investment will safeguard 3,000 of the 4,500 jobs on the Halewood site. The new model will compete head on with the BMW 3-series, the Audi A4 and the Mercedes C-class and, at current prices, will sell at just under pounds 20,000.

Halewood was one of three sites studied to build X400. The other two were Ford factories in Germany and America. Announcing the go-ahead for the X400 at the Detroit Motor Show, Nick Scheele, Jaguar's chairman, revealed that the investment would probably have gone to the German factory in Cologne - the cheapest option - without the subsidy from the Department of Trade and Industry, Mr Scheele and certain Ford top executives, including the chairman Alex Trotman and the president of its automotive operations Jac Nasser and also favoured building the new Jaguar in England for traditional and emotional reasons.

Only a year ago the Halewood plant was under threat of complete closure following the decision not to build the new Escort on Merseyside. Confirmation that the plant had won the new Jaguar investment was greeted with jubilation. Tony Woodley, national secretary of the T&G trade union and chief Ford negotiator, described the decision as great news for the British motor industry and Merseyside. "It means that one of the most famous brand names in British manufacturing will continue to be built in its home country in large measure because of the work trade unions have put in to resolving this issue."

Chris Clifford, regional director of the North-west CBI, said the announcement was good news for Merseyside and the whole. "Any major investment like this always has a good impact on the local economy, not only in terms of wealth creation and increased spending power but also for suppliers."

Eddie O'Hara, the Labour MP whose Knowsley South constituency includes the 35-year-old body and assembly plant, said: "Workers and management at Halewood have made a tremendous effort to put the past behind them and make the plant cost effective and a plant, that in quality terms, could rival any other," he said.

Ian McCartney, the trade and industry minister, said Jaguar's decision "shows that the UK remains the most competitive location for automotive manufacture in Europe". Negotiations over the aid package are expected to be finalised within three weeks and then submitted to the European Commission for approval.

The go-ahead for the X400 follows the decision last year to build a new medium-sized Jaguar, the X200 at the company's main Coventry site to compete with the BMW 5-series. Mr Scheele said: "Jaguar will turn itself from a small car company into a major player on the international stage. By the time X400 comes on-stream we will be a four-model line company with total production of between 200-250,000 cars a year."

Mr Nasser added: "When Ford bought Jaguar in 1989 most people thought we paid too much and that we didn't look close enough at the soiled merchandise. Maybe we did pay too much at the time but I think history will view our purchase of Jaguar as a very wise move."

But Alex Trotman, commenting on world car industry's excess of manufacturing plants, said: "There is particular over-capacity in Europe which is why profit margins are getting smaller and smaller.'' Ford, he said, had trimmed $3bn from its costs in 1997 and would make further reductions this year though not on the same level.

Toyota's expansion in Deesside is expected to involve investment of pounds 170m and will increase engine production from 200,000 to 350,000 a year, enabling it to supply the new Starlet assembly plant being built in northern France. The announcement is expected on Friday to coincide with a visit to Japan by Prime Minister Tony Blair.

PROMOTED VIDEO
Extras
indybest
Travel
Flocking round: Beyoncé, Madame Tussauds' latest waxwork, looking fierce in the park
travelIn a digital age when we have more access than ever to the stars, why are waxworks still pulling in crowds?
Arts and Entertainment
tv
Arts and Entertainment
Judi Dench appeared at the Hay Festival to perform excerpts from Shakespearean plays
tvJudi Dench and Hugh Bonneville join Benedict Cumberbatch in BBC Shakespeare adaptations
Sport
Is this how Mario Balotelli will cruise into Liverpool?
football
News
Ronahi Serhat, a PKK fighter, in the Qandil Mountains in Iraqi Kurdistan
i100
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Arts and Entertainment
Poet’s corner: Philip Larkin at the venetian window of his home in 1958
booksOr caring, playful man who lived for others? A new book has the answer
Arts and Entertainment
Exhibition at the Centre Pompidou in Metz - 23 May 2012
art
News
Matthew McConaughey and his son Levi at the game between the Boston Red Sox and the Houston Astros at Fenway Park on August 17, 2014 in Boston, Massachusetts.
advertisingOscar-winner’s Lincoln deal is latest in a lucrative ad production line
Life and Style
Pick of the bunch: Sudi Pigott puts together roasted tomatoes with peppers, aubergines and Labneh cheese for a tomato-inspired vegetarian main dish
food + drink
Arts and Entertainment
Alfred Molina, left, and John Lithgow in a scene from 'Love Is Strange'
film
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Junior Quant Analyst - C++, Boost, Data Mining

£25000 - £35000 per annum: Harrington Starr: Junior Quant Analyst - C++, Boost...

Service Desk Analyst- (Desktop Support, Help desk)

£25000 - £35000 per annum: Harrington Starr: Service Desk Analyst- (Desktop Su...

Junior Quant Analyst (Machine Learning, SQL, Brokerage)

£30000 - £50000 per annum: Harrington Starr: Junior Quant Analyst (Machine Lea...

UNIX Application Support Analyst- Support, UNIX, London

£45000 - £55000 per annum: Harrington Starr: UNIX Application Support Analyst-...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape