Published: Thu, January 10, 2019
Worldwide | By Isabel Fisher

JLR and Ford prepare for mass job cuts

JLR and Ford prepare for mass job cuts

Britain's biggest auto maker, Jaguar Land Rover, is cutting 4,500 jobs worldwide, with most of the cuts affecting workers in the UK. "We have great belief in the potential of JLR's distinctive premium products and brands as well as in JLR's design and engineering capabilities", Tata Motors Chairman, N. Chandrasekaran said in late December.

In October previous year, the vehicle giant unveiled a £2.5 billion turnaround plan that included cost cutting after Brexit uncertainty and slowing demand in China left it nursing a hefty second-quarter loss.

The cuts, representing roughly 10 percent the company's workforce, are part of a 2.5 billion-pound ($3.2 billion) push announced a year ago to reduce costs and boost cash flow through 2020.

A spokesman for the union Unite said: "Unite is not aware of any further job losses to those already announced and planned for early in the new year at Jaguar Land Rover, Unite also expects ongoing transparency regarding the hard current climate the automotive sector is operating in the United Kingdom and its impact with the company". Industry insiders have dubbed the situation it is facing as a "perfect storm" with declining diesel sales, a cautious Chinese market and global political uncertainty leaving the company highly exposed.

Most growth is expected through its SUVs, which tallies with the broader market trends, while the biggest question mark is over Jaguar's saloon range which has struggled against German rivals.

But it's also spent millions of pounds trying to prepare for Brexit, which could have a disastrous effect on its European sales.

JLR is also one of the most heavily-exposed vehicle makers to ongoing consumer confusion about the wisdom of buying a diesel auto in the aftermath of the VW emissions scandal.

Critics say it was relatively slow to embrace electric cars - a move that is now looking critical, with some cities considering banning diesel, and even petrol, cars in the years ahead.

The firm cut 1,000 temporary contract workers at its plant in Solihull in 2017.

At Halewood in Merseyside, 180 agency staff were cut.

Meanwhile, Jaguar has been increasing headcount elsewhere in the world.

"Government ministers need to wake up and start doing more to support UK's vehicle workers".

JLR's sweeping job cuts follow a double-whammy of problems, with Brexit uncertainty adding an extra garnish. Its new Slovakian factory has a capacity of 150,000.

It has hired 4,000 workers in China since 2014.

Governor of the Bank of England Mark Carney said the probability of a no-deal Brexit is "uncomfortably high".

But the company has been saying for more than a year that Brexit uncertainty would eventually take its toll on the perception of the United Kingdom as a stable and competitive base for global manufacturing.

If, as expected, the United Kingdom bears the brunt, or the entirety, of JLR's global cost-cutting, JLR may well say it tried to warn us.

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