JLR plans 1,500 new jobs in Merseyside expansion

Halewood car plant to double in size as 100m project counters recession fears
By Graham Ruddick Property & Industry Correspondent

Directors expect UK double-dip recession

By Richard Tyler

THE majority of boardrooms now believe the uK will fall back into recession this year and remain cautious about their hiring and investment plans, surveys suggest. More than 50pc of finance directors now expect a recession double the percentage a year ago driven by growing concerns over a break-up of the euro and the resulting severe effect on the uK economy, said accountancy firm Deloitte. Confidence among the owners of smaller companies has also collapsed, according to the monthly Lloyds Bank business barometer. The banks survey suggested individual companies prospects had eroded in December, with those based in the Midlands and Wales particularly nervous. Lloyds

on-year. It is understood the company is on course to post record profits for the 2012 financial year JAGuAr Land rover is planning and could even make 1.5bn. JLr to double the size of its Merseyside employees were called into work factory and create 1,500 new jobs in over Christmas for a special shift to a major boost to the Coalitions help keep up with demand. drive to rebalance the economy. An expansion of Halewood, which An expansion of the plant one employs 3,000 people, will take the of the biggest car manufacturing uK another step towards producing facilities in the uK comes amid a record number of cars. growing worries over a slowdown in The country produced 1.9m cars uK industry and the prospects of a a year in its manufacturing heyday double-dip recession in the wider in the early 1970s. However, it could economy. break that annual record within five JLrs Land rover plant in Hale- to 10 years following 4bn of investwood is at full capacity producing ment in the past 12 months from the new range rover Evoque and car makers such as Toyota, BMW growing the factory will allow the and JLr. company to keep up with surging JLr has enjoyed a remarkable turnaround since seeking loan guarantees from the Labour government in 2009. Demand for its premium cars in emerging markets UK car production increases led to JLr posting record profits of 1.1bn in the year to March 31 2011. 8.5pc despite weak economy under chief executive ralf Speth telegraph.co.uk/finance and Indian parent Tata, JLr is investing more than 1bn a year in demand for its products. Sources research and development. It wants familiar with the situation say the to launch 40 new vehicles in the company is exploring plans to dou- next five years, including a Jaguar ble the size of the plant by develop- sports car and a new Land rover ing on surrounding land. This will Defender. represent an investment of around The company is in talks with 100m, although the proposals are Chinese car maker Chery about a thought to be at a relatively early joint venture that would allow JLr stage. to open manufacturing facilities in The premium car maker has China for the domestic market. The already confirmed it is building a car maker is also exploring how it 355m engine plant in can work more closely with British Wolverhampton and is redevelop- schools to boost the number of ing its factory in Solihull. It has engineering graduates. hired thousands of new employees A spokesman for JLr said: JLr over the past 12 months to launch has not made any announcements new models. about Halewood and we do not The release of the Evoque, nick- comment on speculation about posnamed the Baby range rover, has sible future plans. sparked another stage of expansion Despite the global economic for JLr. Its sales are up 30pc year- uncertainty, a new survey from

75pc
Chance of the UK economy falling back into recession, according to companies surveyed by Lloyds Bank

The Telegraph

estimated that companies now believe there is a 75pc chance of a recession. Ian Stewart, Deloitte chief economist, said: Those pinning their hopes for growth on a sharp increase in corporate spending in the uK this year may be disappointed. On balance, CFOs [chief financial officers] expect corporate hiring, investment and discretionary spending to contract in 2012. The finance directors said their top priorities for 2012 were reducing costs and increasing cash flow, suggesting that calls by employers body the CBI for companies to invest more in 2012 may not be heeded. Deloitte said more than half of the finance chiefs surveyed thought there was a high or very high level of uncertainty facing their businesses, up from 26pc last summer. One director summed up the mood: Everyone is waiting for something very bad to happen, he Ramping up: Jaguar Land Rover employees were called in for an extra shift over Christmas to keep up with demand said. Mr Stewart said the majority of General Electric says 71pc of and internal improvements in prod- onstrate uK hi-tech manufacturing directors were now working on hi-tech manufacturers in Britain ucts and services. is still a growth story and can play a the assumption that Britain will fall are forecasting their business will The growth predictions have been pivotal role in turning round the back into recession. They grow in 2012. made despite only 15pc of manu- uKs economy. It is encouraging to expected weak trading conditions Out of more than 350 businesses facturers being positive about the see that a good proportion of these to last for more than a year. questioned, a quarter said their uK economy. Also, 26pc said bank firms are expecting significant Bank credit and corporate bond business will grow by more than finance remained either impossi- growth in the next 12 months. markets had also become more 10pc. ble to obtain, or obtainable only on However, we need to ensure difficult, with finance directors The manufacturers said this is unacceptable terms. conditions are right to help them reporting the sharpest decline in due to demand from emerging Mark Elborne, chief executive of grow and take advantage of the credit availability since the third markets, the helpful exchange rate GE uK, said: These figures dem- opportunities on offer. quarter of 2008, he said.

BSkyB downplays Murdochs hacking email admission

By Katherine Rushton

THE BSkyB board does not regard as material James Murdochs admission that he was warned in 2008 of the extent of the phone hacking, sources at the company have claimed. The revelation is likely to anger BSkyB shareholders who oppose Mr Murdoch as chairman but had been pacified by the boards pledge to review his position as new

evidence about his response to hacking at the News of the World comes to light. The broadcasters independent directors have unanimously backed Mr Murdoch throughout the scandal, on the basis that there have not been any findings against him in any of the various inquiries it has spawned. However, they have repeatedly reassured shareholders that the board will review the situation

INDRANIL MUKHERJEE/AFP/GEtty IMAGEs

whenever material new evidence surfaces. Mr Murdoch, who is chairman of News International and deputy chief operating officer of News Corporation in addition to his role at BSkyB, admitted to a Select Committee inquiry in December that he had been warned hacking was as bad as we feared in an email in 2008. Mr Murdoch claims he replied to the email without reading it closely, and that he had

not been reminded of its existence until a few days prior to the admission. Every major shareholder and shareholder group contacted by The Daily Telegraph since that hearing assumed that the board would view Mr Murdochs admission in December as a material change, and would review his position as a result. However, sources close to the directors said this was not the case.

BSkyB declined to comment. Meanwhile, Chris Bryant, the Labour MP who wrote to BSkyB shareholders ahead of its annual general meeting (AGM) in November to urge them to oppose Mr Murdoch, has branded the broadcasters independent directors slipshod for not rooting out the email earlier. Either this has been hidden from us while the board of BSkyB knew about it, or else the board has been kept in the

dark, which either way doesnt reflect well on corporate governance, said Mr Bryant. He added that the email would have been likely to help boost the shareholder vote against Mr Murdoch at BSkyBs AGM, and he raised the prospect of an extraordinary general meeting (EGM) in light of the new evidence. The board should be taking action, otherwise shareholders will be seeking an EGM, he said.

Hayward may give yacht to charity

By Harry Wallop

Greek official in tax evasion row

By Harry Wilson

IT briefly became the most notorious boat in the world, representing the worst excesses of irresponsible capitalism. But now Bob, the yacht owned by former BP chief executive Tony Hayward, could be sailing off to a better home. Mr Hayward, along with his fellow owners, is considering donating the racing boat to charity. He shares the Farr 52 yacht with Sam Laidlaw, the chief executive of Centrica, the parent company of British Gas, and rob Gray, who works at Deutsche Bank. Despite sporting sunglasses and a baseball cap, Mr Hayward was spotted on Bob at the height of the Gulf of Mexico oil spill in the summer of 2010, competing in a

Bob, Tony Haywards Farr 52

race around the Isle of Wight. It was shortly after Mr Hayward sparked controversy by saying he wanted to get my life back. residents of the Gulf were outraged, pointing out that the waters of the Solent were crystal clear compared to their stretch of coast. It is understood that the owners believe Bobs racing days are over and Toe in the Water, which helps injured servicemen sail, would make better use of the boat. The yacht is relatively cheap with the average second-hand Farr 52 costing 180,000. A new owner would also have to pay for upkeep. Mr Hayward, who left BP shortly after the Isle of Wight incident, is now running Genel Energy, an oil explorer.

the authorities claims he obstructed efforts to fine petrol station owners THE Greek official responsible for for smuggling fuel, a charge Mr cracking down on tax evasion in the Kapeleris denies. indebted country has been accused Lost tax revenues related to the of failing to collect fines imposed on case are estimated at more than smugglers of fuel and heating oil. 15m (12.5m). Yiannis Kapeleris, the Greek Tax evasion and avoidance in finance ministrys general secretary Greece is regarded as endemic and for tax and customs affairs, is facing the crackdown comes as the councharges for alleged breach of his try attempts to convince its internaduties, a crime that can carry a life tional creditors and its fellow eurosentence in prison. zone members that it can find a way The charges have been brought to repay its debts. by prosecutor Grigoris Peponis just Greek public sector debt amounts days after he briefly resigned from to 350bn and talks between the his position following a public fight government and creditors have as with Greeces coalition govern- yet failed to reach a deal on how the ment. borrowing, which amounts to more Mr Kapeleris is facing calls to than the countrys entire annual step down amid claims of his economic output, will be repaid. alleged failure to pursue fuel smugreports in the Greek press yesglers. A two-month investigation by terday suggested that Germany is

looking at proposals to accept a 75pc haircut in the value of Greek government bonds as part of a debt swap deal. A new deal would go well beyond the terms of an October 130bn bail-out package agreed by European leaders, which called for a 50pc writedown on the nominal value of more than 200bn of privately-owned Greek debt. Cases like that brought against Mr Kapeleris are likely to undermine already weak investor confidence in the ability of Greece to meet its financial obligations. External loans are critical to Greeces ability to remain solvent and the country needs to secure its next loan instalment to meet the upcoming repayment of an 11.4bn bond that is due to mature in late March.