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Jaguar tells Ford it needs more cash

Jaguar is in talks with owner Ford for an injection of funds. The luxury car company is understood to be negotiating with Ford for cash following a £534m charge to cover the write-down on its investments.

Talks are taking place just a year after Jaguar received £260m from Ford to cover losses at its UK luxury cars arm. Ford said just before Christmas that Jaguar made losses of £601m in 2003 - almost double the loss of the previous year. The group's cars have apparently proved less popular in the United States than expected, causing losses to escalate.

Jaguar has abandoned its long-term aim of producing 200,000 cars a year in favour of turning out the current level of between 120,000 and 130,000. The changes are expected to take place by September.

No figures have been published for last year, but the group confirmed in November that it was unlikely to break even before 2007 despite ending car production in Coventry.

It is unclear what form the cash injection will take, but one option would be for Ford to convert some of the £490m that Jaguar owes to other Ford companies into equity.

The £534m charge is believed to cover a write-down of Jaguar's investments and is independent of the cost of job losses.



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