Business Secretary statement on Jaguar Land Rover job cuts

Business Secretary statement on Jaguar Land Rover job cuts

Jaguar Land Rover is to cut 4,500 jobs - majority in the Midlands - as it looks to save £2.5 billion.

Most of the cuts are expected to be in the United Kingdom, with the savings and "cashflow improvements" coming over the next 18 months.

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

But as part of its new "business plan", some 4,500 jobs will be cut, mainly in management, marketing and administrative roles but some productions staff may also be hit, the BBC reported. The company has said that move will cost 1,200 jobs.

In the third quarter of 2018, the UK's largest auto maker posted a £90 million loss - a big swing in fortunes from the year before, when it made a £385m profit. "To weather this volatile external scenario, we have launched a comprehensive turnaround plan to significantly improve our free cash flows and profitability".

Later this year, the company would start producing the next generation electric drive units (EDU) at its engine manufacturing centre in Wolverhampton.

Brexit has made the future of the UK's vehicle manufacturing industry uncertain, with Toyota and Vauxhall among those to warn of negative impacts in the event of a hard Brexit.

The new job losses are in addition to the 1,500 workers who left the company a year ago.

Brexit played an indirect role in the decision, Jaguar Land Rover Chief Executive Officer Ralf Speth said on a conference call, citing the United Kingdom automotive market's 6.8 per cent drop in 2018, the worst since the financial crisis. Sales fell 6% to 22.7m units past year, the China Passenger Car Association said.

"Britain's vehicle workers have been caught in the crosshairs of the government's botched handling of Brexit, mounting economic uncertainty and ministers' demonisation of diesel, which along with the threat of a no deal Brexit, is damaging consumer confidence", Unite national officer Des Quinn said.

"Our results were undermined by slowing demand in China, along with continued uncertainty in Europe over diesel, Brexit and the WLTP changeover".

"The announcement on job losses will be substantial, affecting managerial, research, sales, design", said the source, who spoke on condition of anonymity. 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.

China is the company's biggest and most profitable market. In the final quarter of 2018, 1,000 employees at Castle Bromwich were put on a three-day working week.

In China it has hired 4,000 workers since 2014.

In June, the company said it would move production of the Land Rover Discovery sport utility vehicle to Slovakia from Birmingham, England, to make room for future electric cars.

Last November the new Range Rover Evoque was unveiled, which will be built at Halewood and was hailed as safeguarding jobs there.

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