Government backing is seen as vital for JLR’s future. Neil Hodgson reports on a dramatic day for Merseyside’s car industry

HALEWOOD has a promising future as a car manufacturer, despite the axing of the Baby Jag yesterday, costing 300 jobs.

That was the message of local MP Eddie O’Hara and Merseyside business groups last night as support emerged from all quarters to ensure a smooth transition from the end of X-Type production to a promising new marque. But Government backing in ensuring vital funding to enable parent company Tata to trade through the current market downturn is universally seen as the key to the Knowsley plant’s continued existence.

Last year, the Daily Post campaigned for Government backing for the region’s ailing car industry.

But Jaguar chief executive David Smith yesterday confirmed the early cessation of production of the Baby Jag at the end of the year, in the latest bid to combat plummeting car sales in the face of the worst recession in decades.

Even though the axing of the marque will result in 300 further voluntary redundancies at the plant, which has already seen more than 200 agency and temporary staff leave, many saw it as a fait accompli.

One worker leaving the plant yesterday said: “It was expected. The Baby Jag has had a good run. We were starting to make fewer of them in the last year.”

That still leaves the popular Freelander 4X4 model still being produced at Halewood, with the possibility of a seven-seater version in the future.

But the big hope for the Knowsley plant rests on the concept LRX car, a “Baby Land Rover”, which will achieve an environmentally-friendly 60 miles per gallon.

Government funding of £27m has already been offered to fund the technology for LRX and a substantial chunk of the 340m euros loan from the European Investment Bank (EIB) is also earmarked for Halewood’s production of the LRX.

But the stumbling block has been the Government’s apparent reticence to underwrite the European loan, with claims of unreasonable demands on Tata over board appointments and a veto on redundancies.

There is now a clamour from all sides for the Government to settle the funding issue and ensure that Halewood can move forward with new confidence.

Dave Osborne, chief automotive industry negotiator for Unite the Union, said: “We have commitments for Halewood to be a two-product plant, and an imminent announcement on LRX would quickly bring an end to the uncertainty that has been surrounding the plant of late.

“What will help that process is the EIB money, as part of the Auto Assistance Programme, which should be released without undue delay.”

Labour MP Eddie O’Hara, whose Knowsley South constituency includes Halewood, added: “Everyone knew the X-Type was reaching the end of its production life and it was just a question of when, not if, it was being phased out.

“But the question is, when will the LRX be phased in behind it?”