Jaguar Land Rover to cut up to 5,000 jobs
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worried_jim
Posts: 11,631 Forumite
in Motoring
A sad day. Chinese downturn, Customers turning away from from Diesel and fears over Brexit.
https://www.bbc.com/news/business-46810473
Jaguar Land Rover (JLR) will today announce it is cutting up to 5,000 jobs from its 40,000 strong UK workforce.
Management, marketing and administrative roles are expected to be hardest hit, but some production staff may also be affected.
The layoffs are part of a £2.5bn cost-cutting plan amid what industry insiders have called a "perfect storm".
They mean a downturn in Chinese sales, a slump in diesel sales and concerns about UK competitiveness post-Brexit.
JLR is particularly exposed to the first two of these factors.
China is the company's biggest and hitherto most profitable market. But sales in China have fallen nearly 50% in recent months as cautious Chinese consumers have been holding back on big ticket purchases amid global trade tensions.
The relationship between JLR and its Chinese sales network have also been strained as dealers demand better terms and promotional incentives.
JLR is also one of the most heavily-exposed car makers to ongoing consumer confusion about the wisdom of buying a diesel car in the aftermath of the VW emissions scandal.
Ninety per cent of its vehicles are diesel-powered, although it has been investing in new electric and hybrid vehicles.
Today's job losses come on top of cuts made last year.
In Solihull, 1,000 agency workers were laid off in 2017.
At Halewood in Merseyside, 180 agency staff were cut.
In Castle Bromwich, 1,000 employees were put on a three day week for the last three months of 2018.
Meanwhile, Jaguar has been increasing headcount elsewhere in the world.
In China it has hired 4,000 workers since 2014.
Most recently it announced it would move all production of the Land Rover Discovery to a new plant in Slovakia with plans to hire up to 3,000 workers.
Unions are keen to examine whether JLR's international plants will continue to see additional investment at the expense of the UK.
They are also concerned that the company is not permanently reducing its UK production capacity in the face of what could prove to be short-term headwinds.
The company has sounded some of the most urgent warnings among UK manufacturers about the damage that Brexit uncertainty was doing to investment in the UK.
In July last year, the company said it needed more certainty around Brexit in order to continue investing in its UK operations and warned that a "no-deal" Brexit would cost the company more than £1.2bn in profit each year.
Most commentators have concluded that the chance of a no-deal Brexit have increased with the governor of the Bank of England recently describing the probability as "uncomfortably high".
Of all JLR's problems, the biggest flashing red light is a collapse in sales in its biggest market - China.
But the company has been saying for more than a year that Brexit uncertainty would eventually take its toll on the perception of the UK as a stable and competitive base for global manufacturing.
If, as expected, the UK bears the brunt, or the entirety, of JLR's global cost-cutting, JLR may well say it tried to warn us.
https://www.bbc.com/news/business-46810473
Jaguar Land Rover (JLR) will today announce it is cutting up to 5,000 jobs from its 40,000 strong UK workforce.
Management, marketing and administrative roles are expected to be hardest hit, but some production staff may also be affected.
The layoffs are part of a £2.5bn cost-cutting plan amid what industry insiders have called a "perfect storm".
They mean a downturn in Chinese sales, a slump in diesel sales and concerns about UK competitiveness post-Brexit.
JLR is particularly exposed to the first two of these factors.
China is the company's biggest and hitherto most profitable market. But sales in China have fallen nearly 50% in recent months as cautious Chinese consumers have been holding back on big ticket purchases amid global trade tensions.
The relationship between JLR and its Chinese sales network have also been strained as dealers demand better terms and promotional incentives.
JLR is also one of the most heavily-exposed car makers to ongoing consumer confusion about the wisdom of buying a diesel car in the aftermath of the VW emissions scandal.
Ninety per cent of its vehicles are diesel-powered, although it has been investing in new electric and hybrid vehicles.
Today's job losses come on top of cuts made last year.
In Solihull, 1,000 agency workers were laid off in 2017.
At Halewood in Merseyside, 180 agency staff were cut.
In Castle Bromwich, 1,000 employees were put on a three day week for the last three months of 2018.
Meanwhile, Jaguar has been increasing headcount elsewhere in the world.
In China it has hired 4,000 workers since 2014.
Most recently it announced it would move all production of the Land Rover Discovery to a new plant in Slovakia with plans to hire up to 3,000 workers.
Unions are keen to examine whether JLR's international plants will continue to see additional investment at the expense of the UK.
They are also concerned that the company is not permanently reducing its UK production capacity in the face of what could prove to be short-term headwinds.
The company has sounded some of the most urgent warnings among UK manufacturers about the damage that Brexit uncertainty was doing to investment in the UK.
In July last year, the company said it needed more certainty around Brexit in order to continue investing in its UK operations and warned that a "no-deal" Brexit would cost the company more than £1.2bn in profit each year.
Most commentators have concluded that the chance of a no-deal Brexit have increased with the governor of the Bank of England recently describing the probability as "uncomfortably high".
Of all JLR's problems, the biggest flashing red light is a collapse in sales in its biggest market - China.
But the company has been saying for more than a year that Brexit uncertainty would eventually take its toll on the perception of the UK as a stable and competitive base for global manufacturing.
If, as expected, the UK 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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Comments
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The most worrying thing about this is that it's mostly management/marketing/admin staff, especially if that includes design and development staff.
Production staff would be easily explained by the move of D5 production to SK. The e-Pace and i-Pace are contract-built by Magna Steyr in Austria. Chinese-market cars are almost all built in China, so they're a separate issue entirely.
"90% of its vehicles are diesel-powered" might be correct in the UK and other European markets, but it's not right on the global market - the vast majority of their US sales are petrol, and they sold more cars than ever before in the US last year - 122,000, 7% up on 2017, and about 20% of their total global volume. So why aren't those petrol cars selling in European markets? They're available.0 -
Brexit supporting friends of mine poo poo'd the idea that Brexit would result in jobs moving to eastern europe. I suggested that the chance car manufacturers might have to pay a levy of around 20% would simply make them invest in areas that they wouldn't have to pay this and also have lower wage bills at the same time. Slovakia is a pretty country too - and beer is just over a euro a pint there.0
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Mercdriver wrote: »Brexit supporting friends of mine poo poo'd the idea that Brexit would result in jobs moving to eastern europe. I suggested that the chance car manufacturers might have to pay a levy of around 20% would simply make them invest in areas that they wouldn't have to pay this and also have lower wage bills at the same time. Slovakia is a pretty country too - and beer is just over a euro a pint there.
Ah yes, because Brexit.
This has little to do with Brexit. It would have happened anyway.
A [STRIKE]chinese[/STRIKE] indian company taking over JLR has absolutely no need to keep production in the UK.0 -
Something I always wondered about when companies cut so many staff, why hire them in the first place? If you can fire 5,000 people and still continue what you were doing, your probably over-hired/spent in the first place.0
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I work in the automotive industry, we largely deal with Jaguar Land Rover, it's hit us hard too. I'm sure that it has hit other companies that are also have Jaguar Land Rover as a client. It's a mixture of things, Brexit and the Trump tariffs really aren't helping our case either. This job loss affects more than just them. I feel sorry for all the people losing their jobs.0
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Something I always wondered about when companies cut so many staff, why hire them in the first place? If you can fire 5,000 people and still continue what you were doing, your probably over-hired/spent in the first place.
Because of mostly short term thinking and incorrect market prediction.
JLR invested heavily on diesel and could not swiftly move into petrols.
On other hand, Toyota/Lexus stopped diesel and have good offerings on petrol/hybrid.
Not to mention, the awful realiability of JLR cars compared to Japanese/Korean rivals.Happiness is buying an item and then not checking its price after a month to discover it was reduced further.0 -
Blimey, I missed that. When did that happen?A chinese company taking over JLR has absolutely no need to keep production in the UK.
JLR have a full range of petrols, in production and EU emissions approved.Because of mostly short term thinking and incorrect market prediction.
JLR invested heavily on diesel and could not swiftly move into petrols.0 -
Ah yes, because Brexit.
This has little to do with Brexit. It would have happened anyway
That's what I heard too. From within JLR.
Brexit is a convenient scapegoat and the announcement is timed to cause as much embarrassment to the government as possible. JLR are extremely p!ssed off with the government for effectively killing their diesel sales before they have had time to get viable alternatives in the showrooms.0 -
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How do you square that with 20% of their sales being in the US - an almost exclusively petrol market? 2018 saw record sales for them there.Gloomendoom wrote: »JLR are extremely p!ssed off with the government for effectively killing their diesel sales before they have had time to get viable alternatives in the showrooms.
And it's not a Euro-approval issue, either, because their ranges and sales in some European markets, notably Scandinavia, are primarily petrol.0
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