Tatas shelves plan to shut JLR Midlands plant

India's Tata Group owned Jaguar Land Rover has scrapped plans to close one of its UK plants.

According to the Daily Telegraph, the luxury carmaker, which employs 16,000 people, agreed a deal with unions on Thursday that will see its Castle Bromwich and Solihull plants in the Midlands remain open in return for all new staff being hired on more flexible contracts.

The decision follows a turnaround in the company's fortunes over the past year and will lead to JLR hiring 2,000 employees. Keeping the two plants open is a clear statement of the commitment of Tatas to manufacturing in the UK.

The company is one of the biggest contributors to research and development in the UK and contributes around 6 billion pound of exports. JLR also has a plant in Merseyside. Tatas announced last September it planned to close one of JLR's Midlands plants by 2014 following a downturn in the car industry.

Tatas bought Jaguar Land Rover from Ford for $2.3 billion in June 2008.