Task force set up for Jaguar Land Rover workers as job cuts confirmed
A Midlands-wide Jaguar Land Rover task force has been set up to help workers affected by job losses at the struggling firm.
JLR confirmed it was cutting 4,500 jobs from its 40,000 strong UK workforce as part of a £2.5 billion cost-cutting plan, which bosses have attributed to a downturn in the Chinese market, a drop in diesel sales and concerns over Brexit.
It comes as new figures revealed the company saw sales drop 4.6 per cent last year to 592,708 vehicles worldwide, with a fall of 6.4 per cent in December.
The firm is a key customer to car part companies in Shropshire including Polytec, Magna’s Cosma Castings and Stadco, employing hundreds of jobs across the county.
But despite the bleak outlook JLR moved to commit to long-term investment in the region, announcing that its next generation of drive units for electric vehicles will be built at Wolverhampton’s i54 site.
The plant – which the Star understands is still likely to see jobs go – makes diesel and petrol engines for most JLR models.
It comes after the firm, which also has sites in Solihull, Castle Bromwich and Coventry, cut 1,500 jobs last year.
A voluntary redundancy programme is planned for its latest round of departures.
The task force to support staff will meet on Monday.
It will be headed by Business Secretary Greg Clark and involve JLR bosses, council leaders, West Midlands Mayor Andy Street and MPs.
Wolverhampton Council leader Roger Lawrence said: “JLR workers come from across the entire region. The plan we are putting in place must reflect that.
“This is too big an issue to just focus on individual areas.
"We don’t yet know the full impact that the announcement will have on the Wolverhampton plant, but the job cuts can’t all be to do with streamlining management and there is concern that shop floor staff will also be affected.”
Mr Street said he was confident JLR would “remain a critical part of our region’s future success.”
Wolverhampton South East Labour MP Pat McFadden said the redundancy plans were “very troubling”, while JLR chief executive Ralf Speth said the firm was “taking decisive action to help deliver long-term growth”.
Mr Clark said: “Jaguar Land Rover is a much valued British company with a talented and dedicated workforce.
"The Government has, and will continue, to work closely with the business to ensure that it can succeed long into the future as it invests and transitions to autonomous, connected and electric vehicles."
Firm’s sales fell worldwide in 2018
Last year has been a real disappointment for Jaguar Land Rover.
The Land Rover arm of the company has dragged it down. The year 2017 had been a record year for JLR and the introduction of the Jaguar E-Pace and I-Pace led to Jaguar’s best ever annual sales results in 2018.
Jaguar was up 1.2 per cent for the year, selling180,833 cars worldwide. And sales last month were 7.2 per cent up.
But Land Rover sales slipped 6.9 per cent on the year, with 411,875 sold globally. And they dropped 11.4 per cent in December.
That combination led to Jaguar Land Rover’s saw total sales in 2018 to fall by 4.6 per cent to 592,708 vehicles. In December the decline accelerated to 6.4 per cent with 52,160 cars sold worldwide.
The 4,500 fresh job losses that come from that downturn are an inevitable worry not just for JLR workers but also for firms in the West Midlands, Staffordshire and Shropshire that supply the car giant. Black Country Chamber of Commerce chief executive Corin Crane said: “Given the difficult landscape that the automotive industry faces, we were braced for this sort of news. Particularly concerning to the Chamber is the effect that these job losses will have on the wider supply chain.
“We know the diesel’s market share across Western Europe has fallen substantially in the last three years and that the behavioural shifts towards full electric vehicles in South East Asia will mean a move away from diesel there, too.”
Mr Crane said that it was crucial that the Government acted to mitigate against serious repercussions for Tier 2 and 3 suppliers in the West Midlands.
“The West Midlands has seen first first-hand with MG Rover and Carillion, how susceptible integrated supply chains are to severe disruption to larger businesses. What the Government should be doing is discussing funding opportunities for supply chain diversification with Tier 2 and 3 suppliers, as well as ensuring that mechanisms are in place for workers if job losses increase in our region,” he added.
Wolverhampton South East MP Pat McFadden said: “This is terrible news for the workers affected and for the UK automotive industry. After many years of success and growth Jaguar Land Rover is now suffering the perfect storm of slowing sales in China, public concern about diesel and Brexit.
“Jaguar Land Rover is absolutely integral to the manufacturing strength of the West Midlands so it is very troubling to see the company having to take these measures.”
Labour deputy leader and West Bromwich East MP Tom Watson said the news was “distressing”.
Ford also looking to shake-up its operations
While Jaguar Land Rover revealed its latest global cuts, Ford also revealed it wants to shake-up European operations.
The immediate impact on its UK operations, which include two engine factories in the UK at Dagenham and Bridgend, is expected to be limited.
The changes are aimed at improving profits and reducing costs at Ford of Europe, which has 54,000 employees, including 13,000 in the UK.
While not revealing details of the scale of job losses in the UK, Ford, which has a string of major dealerships across the West Midlands, Staffordshire and Shropshire, said it was starting consultations with unions to implement a “comprehensive transformation strategy”.
Ford will be talking to the unions about measures to reduce costs, including focusing on more profitable models and exiting less profitable markets. It will concentrate more in future on electric and hybrid technology and expand its commercial vehicle business. New all-electric vehicles will be offered for all Ford models, and the company said it would be speeding up plans to cut structural costs.
The announcement came just hours before JLR detailed job losses in its UK operation. “We are taking decisive action to transform the Ford business in Europe,” said Steven Armstrong, Ford’s group vice president and president, Europe, Middle East and Africa. “We will invest in the vehicles, services, segments and markets that best support a long-term sustainably profitable business, creating value for all our stakeholders and delivering emotive vehicles to our customers.”
Ford said it was starting formal consultation with its works council and trade unions, adding that it was committed to working with its key stakeholders over the new strategy.
Unite union national officer Des Quinn said: “Ford’s workforce in the UK is world-class in making and developing engines and gearboxes that are shipped all over the globe. Unite is positively engaging with Ford over its plans as we seek to safeguard jobs and look after the interests of all the company’s employees in the UK.
“We expect the immediate impact on Ford’s UK operations to be limited.”
The company says there will be a “reduction of surplus labour” across all its business functions. Ford also has a joint venture with the gearbox manufacturer Getrag on Merseyside. The announcement is likely to renew concerns about the Bridgend plant’s long-term future in particular, which is already due to lose a major contract to build engines for JLR in 2020.