Jaguar Land Rover confirms 4,500 job cuts but electric drive units to be built in Wolverhampton

Car giant Jaguar Land Rover is to cut 4,500 jobs under plans to reduce costs by £2.5 billion, the company has announced.

The job losses will affect the company's global workforce but are expected to mainly affect the UK, where 44,000 people are employed - including 1,800 in Wolverhampton, 10,000 in Solihull and 3,200 in Castle Bromwich.

JLR also revealed that electric drive units will be produced at the i54 engine factory in Wolverhampton as it increases its investment in electrification.

The electric units will be powered by batteries assembled at a new battery assembly centre at Hams Hall in Birmingham.

Ralf Speth, chief executive of Jaguar Land Rover, said: "We are taking decisive action to help deliver long-term growth, in the face of multiple geopolitical and regulatory disruptions as well as technology challenges facing the automotive industry."

The job cuts, which will begin with a voluntary redundancy program, are expected to mainly affect roles including administration, marketing and management.

They come in addition to the 1,500 workers who left the company last year.

The company employs around 10,000 people in Solihull - its biggest factory - and around 3,200 at its Jaguar factory in Castle Bromwich, where a three-day week was introduced in the autumn.

Turnaround plan

The announcement came as it was revealed that total JLR sales fell by 4.6 per cent in 2018.

In October last year, the car 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 firm, owned by Indian conglomerate Tata, booked a £90 million pre-tax loss in the three months to September 30, which compared with a £385 million profit in the same period in 2017.

In China, demand was adversely impacted by consumer uncertainty following import duty changes and escalating trade tensions with the US.

In the UK, "continuing uncertainty related to Brexit" was blamed.

Hundreds of Wolverhampton JLR workers were sent home on full pay in the run-up to Christmas, as production was slowed down in the wake of falling sales, while around 200 jobs were axed in Solihull.

Reaction

Black Country Chamber of Commerce chief executive, Corin Crane, said that the Government must act to stop the cuts affecting supply chains across the region.

He said: “Given the difficult landscape that the automotive industry faces, we were braced for this sort of news.

"Particularly concerning to the Black Country Chamber is the effect that these job losses will have on the wider supply chain.

“What is crucial now is that the Government acts to mitigate against serious repercussions for tier two and three suppliers in the Black Country and across 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."

West Midlands Mayor Andy Street said the cuts were a reminder of the importance of securing a Brexit deal that benefits UK trade.

He said: “Today’s news will be particularly difficult for the Jaguar Land Rover workers and their families affected by this announcement. The decline in sales and job losses are disappointing given the vital importance of Jaguar Land Rover to the West Midlands economy.

“Nevertheless, I am confident Jaguar Land Rover will be a critical part of our region’s future success. I know the Tata Group and Jaguar Land Rover are committed to manufacturing in the West Midlands and to developing a new generation of electric and hybrid vehicles.

"The billions of pounds invested in recent years, the current £500m investment in Solihull, and the new announcements today of the battery assembly centre at Hams Hall and the investment in electric drive unit production at Wolverhampton are clear evidence of that commitment.

"Though the business challenges faced by Jaguar Land Rover are global issues, such as declining sales in China and declining sales of diesel vehicles, this announcement also acts as a reminder that it is vital importance to the West Midlands of securing a Brexit deal which allows frictionless trade between the UK and the EU.”

Labour deputy leader and West Bromwich East MP Tom Watson added: "The news coming out of Jaguar Land Rover is deeply distressing for thousands of workers and their families in our region.

"I will do everything I can to do support those in my constituency who are affected.

"There are clearly several factors involved but the Government's lamentable failure to give businesses the strong and stable support it deserves must rank high."

Cuts at Ford

Meanwhile, Ford signalled "significant" cuts among its 50,000-strong European workforce under plans to make it more competitive and make its business more sustainable.

The company started consultations with unions, with details of job cuts not expected until later in the year, although staff based at Warley in Brentwood will move to Dunton in Essex.

Steven Armstrong, Ford's European group vice president, said the company was taking "decisive action" to transform its European business.

He said: "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."

New all-electric vehicles will be offered for all Ford models, while there will be a more "targeted" line-up of models in the future.

Mr Armstrong said Ford was making "tough" decisions by undertaking a "complete review" of its European operations.

He said the announcement was not directly linked to Brexit, but he added that Ford will have to undertake a further review if the UK leaves the EU without a deal in March.

Mr Armstrong declined to say how many jobs will be cut, but he said the impact will be "significant".

Unite 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."

Mr Quinn said Unite will scrutinise the business case for JLR’s job cuts, and the union expects any UK redundancies to be voluntary.

“Jaguar Land Rover workers have had to endure a great deal of uncertainty over recent months as they continue to work hard to ensure the carmaker remains a global leader.

“With record levels of new investment and models set to come on stream in its UK factories we look for Jaguar Land Rover to continue to be a global success and the jewel in Britain’s manufacturing crown.

“Britain’s car 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.

“Government ministers need to wake up and start doing more to support UK’s car workers and their colleagues in the supply chain if Jaguar Land Rover’s recent success is to continue.”