Bill Gleeson: Freelander 2 saves the day for Land Rover

Sep 12 2007 by Bill Gleeson, Liverpool Daily Post

THE news that sales of Land Rover cars have reached their highest level in the marque’s 60- year history is very welcome, and must come as a relief to the company’s staff.

Workers who make the Freelander 2 at Halewood can feel especially pleased because their model has made a huge contribution to this strong performance.

The figures will be all the more welcome as they contradict recent reports that consumers are turning against gas-guzzling 4x4s for environmental reasons. Land Rover sales are not just booming in new markets like Russia and China, but also in mature markets such as the United States and Europe. Environmentalists clearly still have some work to do yet if they want to persuade the car-buying public to turn their backs on big- engined vehicles.

Land Rover issued the sales figures at this week’s Frankfurt motor show, where car makers traditionally go to highlight their wares and brag about their successes. In contrast, they don’t refer to poor sales. So the sense of relief at Halewood needs to be tempered by the fact that Ford, which owns both Land Rover and Jaguar, also made at Halewood, chose to issue just Land Rover figures. There was no mention of Jaguar sales. Those figures, we are told, are due out shortly, but Ford isn’t saying what they are until after the show has finished. That might be a hint that they are something to be worried about.

BRITAIN has enjoyed 15 years of unbroken economic growth. It’s the first time such a sustained period of growth has been achieved since records began at the start of the industrial revolution two centuries ago.

Gordon Brown has to be credited with his share of praise for bringing about such prosperous conditions while he was Chancellor of the Exchequer, though the run started while the Conservatives were still in power.

But could all this growth and easy living be about to change?

Banks are worried about the high levels of bad debt occurring in the US mortgage market and stockmarkets around the world have become very volatile. Major lending-backed investment projects are being re-appraised. It doesn’t matter what it is, if it requires large dollops of borrowed money it will be under review by the bankers. That includes residential skyscrapers in Liverpool city centre or new football grounds for our big clubs.

Banks are going back to basics when it comes to assessing lending criteria – and not before time. Some of the loans now being defaulted on should never have been made in the first place. What we have seen in the US sub-prime market has been nothing short of reckless.

What the world’s central bankers don’t know yet is how deep this crisis is going to run. Only time will tell.

One thing that we can be sure about is that banking confidence is crucial. It is also fragile. If the plug is pulled on too many projects, the impact on the rest of the economy could be enormous.

Anybody who was there for the last downturn of 15 years ago will recall the speed with which things came to a grinding halt.

I was working in the City at the time for one of the country’s largest firms of accountants. All of us were very busy supporting an array of takeovers, mergers, refinancings and all sorts of other projects until September 1990. Then suddenly, almost overnight, it all came to a stop.

It was a clear lesson in the psychological fragility of the money markets. Boundless enthusiasm and optimism can turn to anxious inertia in no time at all. Let’s hope it doesn’t come to that now.