Jaguar Land Rover to slash United Kingdom jobs after China, diesel drop

PA Wire  PA Images

PA Wire PA Images

Jaguar Land Rover Chief Executive Ralf Speth said he had serious concerns about the impact of a hard Brexit but it was not possible to predict what steps might be required if that happens.

The company builds a higher proportion of its cars in Britain than any other major or medium-sized carmaker and has also spent millions of pounds preparing for Brexit, in case there are tariffs or customs checks.

In its biggest market, China, the auto industry recorded its first slump in sales in more than two decades.

Jaguar Land Rover employs about 44,000 people in Britain and in the past few years hired thousands of workers at new plants in China and Slovakia.

JLR is to cut up to 5,000 administrative, marketing and management roles as it attempts to find £2.5 billion in savings to turn its fortunes around.

This means nearly one in eight United Kingdom workers will lose their jobs at the luxury carmaker, which employs 44,000 workers across the country, including around 1,800 people at its engine plant at the i54 in Wolverhampton.

The job cuts are a part of the GBP 2.5 billion cost reduction and cashflow improvement efforts that the company is now undertaking, for over 18 months period.

The firm reported a £90m pre-tax loss in the three months to 30 September, compared with a £385m profit in the same period in 2017. The layoffs, representing roughly 10% the company's workforce, come on top of the 1,500 people who left in 2018, the company said Thursday in a statement.

The Dearborn, Michigan-based company didn't reveal how many jobs would be cut and said reductions would be achieved as far as possible through voluntary departures negotiated with unions and employee representatives.

"The economic slowdown in China along with ongoing trade tensions is continuing to influence consumer confidence", said JLR Chief Commercial Officer Felix Brautigam. "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.

"This is not about making the business today more efficient but completely redesigning it", Ford's European president Steve Armstrong told the FT.

A Ford spokesman said the vehicle maker now assumes that any Brexit deal would keep tariff-free trade between Britain and Europe.

General Motors said in November it would lay off 14,000 factory and white-collar workers in North America and put five plants up for possible closure as it restructures to cut costs and focus more on autonomous and electric technology. In September, Jaguar Land Rover boss Speth warned that the wrong Brexit deal could cost tens of thousands of auto jobs and risks production at the firm.

The British automaker lost £90 million ($160 million) during the third quarter of 2018 thanks primarily to a big sales dip in China, Brexit-related woes, and reduced demand for diesel-powered vehicles and traditional sedan models.

The motor industry is being hit by a twin jobs blow after two of the UK's biggest carmakers announced shake-ups.

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