Struggling carmaker Jaguar Land Rover's chief executive David Smith stepped down on Monday, the company said, after a breakdown in negotiations on workers' pay and conditions.

The automaker gave no explanation why Smith, 49, was resigning after 26 years with the firm -- but it came after unions and company chiefs failed to reach agreement in talks last week.

Jaguar Land Rover wants to make changes to pay and pensions for new employees but has come up against union resistance.

The company, however, insisted the negotiations were not linked to Smith's resignation.

"We are disappointed the discussions ended without agreement, but his departure is not linked to the talks," said a spokesman.

The firm also pointed out Smith had been in charge in June 2008, when the group was acquired by India's Tata Motors for 2.3 billion dollars (1.6 billion euros, 1.4 billion pounds).

"The company would like to thank David for his efforts in the role and for his service to Jaguar and Land Rover over many years," said the firm.

The group said its director Ravi Kant would temporarily take over Smith's duties until a permanent replacement is found.

British automaker Land Rover, recently taken over by Indian industrial giant Tata, told its employees Friday it will scale back production in light of an economic slowdown and the credit crunch.

A spokesman for Land Rover -- a specialist in four-wheel-drive vehicles -- declined to spell out the scale of the cutbacks in detail, besides stating that only a "small percentage" of its annual output would be affected.

It was a matter of adjusting supply and demand, and averting a costly backlog of unsold vehicles, he said, in light of "very difficult" market conditions in Britain and the United States.

From September until the end of the year, the Discovery and Land Rover Sport models will be assembled four days a week, rather than five, while night-shift production of top-end Range Rovers will be halted in October.

Formerly a part of US auto group Ford Motor Company, Land Rover was acquired in June by Tata along with the upmarket Jaguar car brand, in a deal that has so far seen no layoffs.

Land Rover employs around 5,000 people at its Solihull plant in the English Midlands.

The squeeze in the credit markets could become a factor in Ford Motor Co.'s attempts to sell its Jaguar and Land Rover brands, CEO Alan Mulally said Wednesday.

"It absolutely is an issue," Mulally said. "Raising money is a key part of anyone's plan to buy anything right now."

So far the credit squeeze hasn't slowed down the Jaguar-Land Rover sales activity, Mulally said. And he expects the credit problem will settle down.

Ford is talking to a handful of bidders about selling the pair of British luxury brands. They are believed to include several private equity groups, plus a pair of Indian automakers.

Ford executive Lewis Booth ruled out announcing a sale at the Frankfurt auto show or at the end of September, as has been rumored. Instead, Ford aims to finalize a deal by late this year or early next year, said Booth, executive vice president overseeing Ford of Europe and the Premier Automotive Group.

PAG includes Jaguar, Land Rover and Volvo, which Ford also is reviewing for a possible sale. The company sold the Aston Martin brand earlier this year.

The reason for shedding the PAG brands, Booth said, is Ford's limited resources. "One is cash; the other is management time," he said.

While that reasoning can be applied to Volvo, too, the decision is more difficult when considering the Swedish brand, Booth said. "It's more integrated into our business," he said.

A Gilroy man bought a Land Rover because of its quiet handling. But the serenity he counted on didn't last very long. Lew Colon described it as a loud noise that gradually got worse. He invited us along for a ride and a listen. The noise happens when he accelerates his Land Rover LR3.



Lew Colon, Gilroy: "The best way I can describe it is I'm driving a four wheel drive truck with snow tires."



It's a noise he sais is being caused by uneven tire wear. To see for ourselves 7 On Your Side used a small stick to measure the tread on various parts of Colon's tire, and compared it with another tire.



Dozens of similar complaints about uneven tire wear on the vehicle populate a forum on Edmonds.com. Colon first noticed the situation after driving just 5,000 miles on his new 2005 model. The company declined to help him immediately, but eventually agreed to buy him three new tires. Colon would have to pay for one.



But 6,000 miles later, he noticed the same pattern on his new tire.



Lew Colon: "In the tread design you can truly see it was wearing -- every other one was wearing."



Colon again complained to Land Rover, but 25,000 miles have passed. The company so far hasn't offered to replace the second set. Land Rover did however issue a technical service bulletin acknowledging concerns about uneven tire wear. The company's suggested fix -- readjust the alignment to new settings. But Land Rover has so far not issued a recall -- saying "it hasn't been confirmed that there is a larger concern."



Attorney Mark Anderson recently filed a class action suit on behalf of Colon and all other 2004 and 2005 LR3 owners in California covered by the technical service bulletin.



Mark Anderson: "These vehicles are covered by the Land Rover factory warranty and when the problem is a defect in the vehicle, they're obligated to take care of the problem and pay for the repairs."

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Elegance, discreet sportiness and understatement have always been the distinguishing features of English cars. Thirty years ago, the tuning specialist, Arden from Krefeld, couldn

COMPREHENSIVE IMPROVEMENTS TO ICONIC DEFENDER FOR 2007

According to the latest J.D. Power Initial Quality Study, the British SUV brand is at the bottom of the heap, with 204 problems per 100 vehicles. That's far worse than the industry average of 124 problems per 100 vehicles.



The poor showing is a repeat performance for the luxury SUV brand, which has been one of the bottom three of the Power IQS pack for three of the past four years.



How many vs. how serious



Land Rover executives say that it's not necessarily how many problems are found but how bad those problems are. It also matters how quickly the problems are corrected on the assembly line. Land Rover has fixed the problems detailed in the survey, said Al Kammerer, director of product development for Land Rover and Jaguar.



J.D. Power executives counter that niggling early quality problems often are bellwethers for longer-term lack of durability and reliability.



"There is a very good correlation between initial quality and vehicle dependability," said Neal Oddes, J.D. Power director of product research and analysis.



J.D. Power's vehicle dependability survey will be released Wednesday, Aug.9.



In Land Rover's case, its dead-last IQS finish can be attributed largely to software gremlins that triggered a persistent check-engine light.



"Consumers just knew they had a problem with a check-engine light," Oddes said. "They didn't know what the underlying problem was, and that leads to a certain apprehension."



Land Rover replaced its BMW-sourced engines for the Range Rover with ones from Jaguar for the 2006 model year. It also launched the Range Rover Sport with the same Jaguar engines. Both required creating new engine management software applications.



But Land Rover engineers did not account for all the different electronic connections that a Land Rover must mate to, compared with Jaguar. That triggered fault codes in the software that then lit the check-engine light, Kammerer said.



Those errors were especially prominent in the Range Rover, which used the new Jaguar engine but retained the original BMW electrical architecture.

"Seventy to 80 percent of all quality problems have their root in poor engineering," Kammerer said. "We have gone back and fixed those goofs and have the data to prove it."



All models involved



All IQS data is sales weighted, Oddes said. But all three Land Rover models - the Range Rover, Range Rover Sport and LR3 - contributed to the brand's poor performance.



In addition to the check-engine light, consumers dinged Land Rovers for brake noise, as well as the Range Rover Sport's hard-to-close liftgate.



Kammerer said the brake problems derived from the "witchcraft" of the brake pad formulating process gone wrong. The liftgate problems came from the body shop's stamping tolerances being out of whack. Both problems have been corrected, Kammerer said.



The real evidence of Land Rover quality comes from warranty cost outlays, Kammerer said. While he would not disclose warranty-cost-per-vehicle - that being a highly guarded secret at most automakers - Kammerer said costs are down by "well beyond 20 percent" since last year.