Union guarantees from Tata Motors? Let me talk to my manager, OK?

by James Bryant, November 28th, 2007, 6:41 am

As the year winds down it seems Tata Motors has taken the inside track on Ford’s widely publicized sale of its problem children, Jaguar and Land Rover.

Representatives of Unite, England’s largest manufacturing labor union, are reported to have approved Tata Motors’ bid to acquire the two storied British brands after Tata and two other main bidders (reported to be Jacques Nasser’s JPMorgan Chase-affiliated One Equity Partners and fellow Indian motor company Mahindra & Mahindra and its partner, Apollo Management)  rolled out their respective schemes to union representatives last week. The union wants two things: security for the 40,000 some-odd UK jobs at stake, and Ford to take an equity stake in certain suppliers that outfit Jaguar and Land Rover plants in the UK — which amounts to job guarantees for workers at those plants.

The deal attempts to meld two seemingly at-odds agendas: globalization and protectionism. Tata gets to expand its geographic reach with two well-known brands (against the better judgment of another Bizmology blogger) while UK workers get to keep a few, increasingly rare, Western manufacturing jobs. Problem is, these were the same opposed but complementary forces that brought the two British brands under Ford’s control in the first place — and we all know how well that went.

 The good news for Tata is, it seems, that the company will get a great deal on the two brands. Ford paid $2.5 billion for Jag back in 1989; it paid $2.57 billion for Land Rover two years later. Merrill Lynch has estimated Jaguar and Land Rover to fetch a Red Tag Sale price of $1.3 to $1.5 billion. Does that include the TruCoat?