Jaguar Land Rover (JLR) estimated its recent announcement of a GBP355m (US$554m) spend on a new engine plant in England's West Midlands will generate up to 3,000 jobs in the supply chain.

The Tata-owned automaker had previously confirmed 750 direct new jobs as a result of the investment in Wolverhampton but news of the trickle-down openings will come as a welcome relief to the UK, reeling from BAE Systems' recent announcement of 3,000 job losses in the wake of deep cuts to the British defence budget.

"Ralf Speth [JLR CEO] is pushing for that to happen because the more a critical mass we have in the region, the more it makes sense," a JLR spokesman told just-auto in Edinburgh at the UK media launch of the Land Rover Evoque.

"The GBP355m is all JLR money - the [UK] government put in GBP10m to support the application. Obviously people ask us where else it might have been - the obvious answer is India because of our owners but we chose the Midlands because [of] proximity to all of our production facilities such as Castle Bromwich and Halewood."

The UK government hailed JLR's move, coming as it does at a sensitive time for highly-skilled British manufacturing jobs that took a severe blow with BAE Systems' announcement of its 3,000-worker cull. There are also looming job cuts at trainmaker Bombardier in Derby after an order for British trains went to Siemens which will build them in Germany. 

Business secretary Vince Cable - a long-term champion of the UK automotive industry - welcomed the news, echoing earlier sentiments the work could have gone abroad citing "tough international competition."

Wolverhampton is one of the British government's enterprise zones - a situation that JLR acknowledges is "a factor, but a factor among many, it was purely a business decision".

Nonetheless, JLR praised the UK administration's stance concerning the automotive sector, which has enjoyed somewhat of a buoyant period despite the prevailing European economic gloom.

"The government is very keen to promote manufacturing in the UK, technology and engineering upskilling, which is important for us," the JLR spokesman said.