The chairman of Jaguar Land Rover owner Tata Motors told Sky News in an interview on Tuesday that the company could cut jobs in the UK if the government did not guarantee multimillion pounds of loans to the company.
"If funds are not available a company will not be able to run so layoffs will take place, redundancies will take place," Ratan Tata said.
Sky says that Tata had been in a stand-off with the UK government over the funding.
"If the attitude is 'Let's see who blinks first' the damage is going to be quite devastating," Tata said.
Jaguar Land Rover axed 450 jobs in January due to falling demand.
Tata bought Jaguar and Land Rover from Ford in June last year for about $2.3 billion.
The company has four sites in the West Midlands region and one at Halewood, northwest England.