Press Report : 300 Halewood jobs to go with end of X-Type model run

Liverpool Daily Post, 15th July, 2009

Jaguar X-Type: The inevitable

Jaguar X-Type: The inevitable

Halewood will cease production of the X-Type Jag at the end of this year with the loss of 300 jobs. Luxury car maker Jaguar Land Rover also revealed plans to shut down production of the X-Type and Freelander models for at least three weeks between September and the end of the year due to tumbling car sales.

Workers were given the bombshell news today. The X-Type, or “baby Jag”, was seen as the plant’s saviour when it faced closure in 1997 after then owner Ford announced the end of production of the high volume Ford Escort.

Jaguar Chief Executive David Smith said today’s shock measures were necessary to protect the company’s interests. Mr Smith said: “Our industry has been especially badly hit by the recession and the premium sector more than others. Jaguar Land Rover retail sales fell by 28% in the past 10 months. We have taken unprecedented action to cut costs, including reduced production volumes, significant cuts to investment plans and some 2,200 job losses . Ceasing production of the X-Type early, with further redundancies and downtime, is necessary to protect our other investment plans.”

Our industry has been especially badly hit by the recession and the premium sector more than others. Jaguar Land Rover retail sales fell by 28% in the past 10 months… Ceasing production of the X-Type early, with further redundancies and downtime, is necessary to protect our other investment plans.” David Smith, Chief Executive, Jaguar Land Rover

Earlier this week fears were raised Halewood could face total closure by Indian owner Tata in the face of falling car sales due to the recession and funding problems. The speculation was dismissed by Halewood’s constituency Labour MP Eddie O’Hara who said the site was being used as a “bargaining chip” in a face-off between Tata and the Government which has so far refused to underwrite a 340 million Euro loan to the company pledged by the European Investment Bank.

However, Mr Smith warned today more bad news could not be ruled out for Halewood. In a clear reference to the Government’s delay in rubber stamping the European loan he said: “Further action will be determined by the state of the market and the speed with which the already approved 340 million euro European Investment Bank loan can be drawn.”

The X-Type was aimed at middle market consumers in a bid to grasp sales from rivals BMW and Audi but the model has not proved to be the success the company hoped. Halewood has seen several production line shutdowns over the past year to match capacity with demand.

The plant’s 2,000-strong workforce must now pin its hopes on the 4X4 Freelander model and the proposed LRX “green” vehicle which has won a £27m Government development grant.

[Source: Liverpool Daily Post]

[Any AROnline readers wishing to read more about the above story can find the relevant BBC News item here.]

Clive Goldthorp

About the Author:

Clive claims that his interest in the BMC>MG story dates back to his childhood in the 1960s when the family’s garage premises were leased to a tenant with an Austin agency. However, back in the 1920s and 1930s, his grandmother was one of the country’s first female Garage Proprietors so cars probably run in his genes! Admits to affairs with Alfa Romeos, but has more recently owned an 06/06 MG TF 135 and then a 15/64 MG3 Style… Clive, who was AROnline’s News Editor for nearly four years, stood down from that role in order to devote more time to various Motor Racing projects but still contributes articles on as regular basis as his other commitments permit.

25 Comments on "Press Report : 300 Halewood jobs to go with end of X-Type model run"

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  1. John Gossip says:

    Now that Tata owns the rights to the Rover brand name, they could slightly modify the X-TYPE and sell it as a new “Rover 70” (or something similar) via their Land Rover dealerships…

  2. Paul Isaacs says:

    The X-TYPE didn’t sell well enough as a Jag, a brand that still carries some kudos. It apparently doesn’t make much profit for them either. It struggled against the last 3 Series and A4. It’s hard to see how carrying on trying to sell it over the next few years as a Rover helps.

  3. Mike Barrett says:

    I really can’t see how ending the production of the X-TYPE protects the investment made by Tata, quite the reverse, other than reminding people what a true Jaguar should look like against the non-Jaguar styled XF and XJ in which I have no interest – give me a good low mileage S-type any day.

    The continued production of the X-TYPE would actually help the finances because, as with printing more copies of a master, the more you make the more profitable that product is, especially if the tooling is written off – one could go on for years.

    This brings me to another subject. How the post 2000 management at MG Rover could not make a return on £10 beggars belief – if they had written off all the tooling in 2000, the company would have been the most profitable company in the industry. Making copies of something that has no book value is the most profitable thing that could have been done.

    The problem of new models could have been dealt with either by joint operations, CKD kits and/or new investment money raised in the market. A company that profitable should not have had any problem raising the investment funds. It’s all about how you present the books.

  4. Mike C says:

    The X-TYPE was clearly a dead duck – the model missed its target market and, with the parent Mondeo already replaced, was looking increasingly old-fashioned.

    The unfortunate thing is that the LRX won’t be available to directly replace it on the production lines as Halewood is the obvious place to produce it.

  5. Paul Isaacs says:

    I’m not in the car industry so I could be missing something here, but… X-TYPES do not sell well, needing discounts and, as a result profits (despite the tooling being paid for) are low as overheads such as materials and staff remain.

    Looking at the “half full” glass, the XF and XJ have finally moved Jaguar on from 1960s pastiche styling (possibly to 2000s Lexus pastiche but that sells better). They are also trying to move Jaguar back up market to be the type of car people like me aspire to but may be able to afford and that is fine as long as there are lots of folks willing to spend £35,000 and up on a car.

    Round here there still are folks like that and they don’t want to see me in my £15,000 09 reg “olde worlde” X-TYPE with the same badge as their £45,000 XJ. It’s based on the old Mondeo – a fine car in its time (July 2009 in my case) – but, if you wanted to platform share now, you would use the current Mondeo not its nine year old daddy. The X-TYPE would become a fossil like the Saab 95 if it carried on.

  6. Paul Isaacs says:

    Mike C beat me to it. I, of course, meant “..people like me may not be able to afford…” Cheers Gordon and Alistair.

  7. Gary H says:

    …and yet BMW produce ugly horrible cars and, whatever comes out, they never fail to sell.

  8. Ross Armstrong says:

    To be honest, when the new XJ was launched, it was a smack in the face as it’s such a radical design. However, many have to remember that Callum has had to drag Jaguar design kicking and screaming into the 21st century and contribute to changing the perception of the company – Jaguars are no longer the unreliable oily hacks they used to be (no matter how much we love ’em). New guys don’t buy old cars..

    However, with regard to the X-TYPE, I think they might be missing a trick by not releasing a follow up. A full modular common platform developed at JLR could be used in a new X-TYPE/Freelander (soft roader)/LRX/Tata Executive model. This platform sharing could easily help to reduce costs, help to lower their CO2 average and, given the modern styling that both companies have been pushing through lately, could be quite attractive to those buyers in the target market for the Audi A4 and BMW 3-Series.

    Of course, an Alfa/Jaguar collaboration could also make sense – Jaguar-developed platform, Alfa-based green tech…

  9. Paul says:

    It’s understandable that JLR would want to get rid of the X-TYPE now – as a product it is almost prehistoric. I cannot think of many cars launched in 2001 that are still in production today.

    Jaguar’s range is looking pretty slick now with the new XJ, the XF and XK sharing a set of modular components and looking nothing like Jaguars of old. The X-TYPE sticks out like a sore thumb within the range and, outside of the UK, probably has negligible sales.

    However, I reckon that Jaguar are wrong to abandon this sector of the market just because they got it wrong with the X-TYPE. Compact Executive cars form the cornerstones of the Audi, BMW and Mercedes ranges. It surely couldn’t be that hard to employ the XF/XK/XJ component set to produce a decent rear wheel drive X-TYPE successor.

  10. Old Fashioned Gentleman says:

    I don’t know about slightly modifying the car – it would be better to replace it with a proper rwd model not a tarted-up Mondeo. The X-TYPE was looking pretty out of place by the time the XF came out but I don’t think withdrawing it with no replacement is the answer. The X-TYPE market is the perfect place for the Rover brand – JLR should use that instead.

  11. Richard says:

    To decide whether they play in this market, Jaguar have to look at the 3-Series (yes I know that’s painful as it’s SUCH an ugly car) and ask: “Can we make something that’ll be much better?” More than that, much better than the 3-Series will be in 5 years time…. Sticky wicket, chaps.

  12. Graham Ariss says:

    I think it is a mistake to leave this area of the market untouched. I expect that, in the very near future, Jaguar and Land Rover will need to consolidate their dealer networks. This opportunity should be used, in the short term, to launch a reskinned X-TYPE with the new Jaguar fast back look, but badged as a Rover.

    However, in the medium term, JLR could use Fiat Group platforms to produce products aimed at the BINI, Audi A3 and A4 segments of the market under the Rover brand.

  13. Hilton Davis says:

    A shame that X-TYPE production will end. JLR should replace it with an equivalent “next generation” car of similar size. The X-TYPE is the ideal model to tempt the public into Jaguar ownership at a lower price and it’s British! Not everyone can afford an XF or XJ but, at least, they would still be able to buy a genuine small Jag…

  14. Jonathan Carling Jonathan Carling says:

    @Hilton Davis
    I agree with you Hilton. This is surely the right time to launch a new small Jag, benefiting from the XF/XJ halo and appealing to a younger market in these economically difficult times.

    Don’t think there’s any mileage in doing a new Rover – the brand is dead and won’t easily be revived, as shown by the real struggle to re-launch MG in the UK. Sadly, no one is interested.

  15. Alex Scott says:

    You would think it wouldn’t take much to update the 4 corner panels and the tail and nose. I’m not suggesting it should look like the XF or the new XJ but some slightly shaper lines on the panels – I would have thought that a lower spec Rover variant (Rover Sprint or Vitesse) with AWD would sell quite well.

    Surely the engineers and even Stadco and the team at the design centres could MAKE this work? I can’t believe that JLR aren’t interested in keeping a mid-sized car available. Looking forward 5 to 10 years, cars WILL be smaller.

  16. Paul Birden says:

    Got any more good ideas?

  17. David says:

    I agree, killing off the X-TYPE rather than replacing it is a mistake. After all, every other premium marque has downsized in the last ten years or so (look at Audi, BMW and Mercedes for instance) and Jaguar needed an accessible entry model to the line-up.

    It’s a shame Jaguar won’t consider using the XF’s rear-wheel drive platform as the basis for an X-TYPE replacement. Continue to offer it in four-door saloon and five-door estate form to generate the volume sales, and potentially consider more niche market offerings such as a two-door Convertible, and the X-TYPE might be an even more worthy entry level Jaguar.

    However, JLR need to recognise the errors with the current model – no ‘halo’ X-Type R and no ‘halo’ performance diesel such as the 2.7 TDVi. I’m sure sales of the X-TYPE have continued to be better than any other Jaguar – further proof that this is a market sector which Jaguar should not abandon.

    Trouble is, with the new XJ’s rear end looking like a cross between some budget Kia model and the 1996 Ford Scorpio, I wonder whether Jaguar’s quest to ‘reinvent itself’ in order to appeal to a younger buyer is too ambitious, too soon.

  18. Mike C says:

    I imagine the cost of JLR independently replacing the X-TYPE would be too much (even with a cut down XF platform) unless they could generate the type of sales BMW achieve with the 3-Series. Presumably JLR would have based the current one on the S-Type if it was easy to do…

  19. David says:

    Fair point, although consider how Rover developed the R3 generation 200 Series with modest investment based on a shortened and modifed version of the R8 platform and with a new body. This might suggest the cost factor might be lower than we think, particularly if you carry over existing running gear from the current X-TYPE and XF.

    Meeting 3 Series sales and production figures would be completely unrealistic in the short and medium term (and probably not desirable if Jaguar wanted to maintain a sense of ‘exclusivity’ over the ubiquitous Bavarian bruiser).

    In the end, the loss of the X-TYPE signals the further sales gain of its competitors, although reheating the current model as a ‘new’ Rover would not likely yield any additional sales over and above the current Jaguar model.

    Using the Rover name for a model in this sector would need something all-new, high quality and stylish (in terms of both reinforcing the marque’s heritage and being forward thinking) which could also be competitively priced. This would be a tall order compared to replacing the X-TYPE with a new model.

  20. Maurice Minor says:

    @Old Fashioned Gentleman
    Welcome back, Old Fashioned Gentleman. Good to have you back! Check out YouTube for an X-TYPE with 500cu inch Chevy power – amazing! This is what JLR should have made: an M3-chasing Jaguar!

  21. Simon Woodward says:

    When Jag were developing the V8 in the early 90s they put it in a number of cars such as the XJS (a red one which was often on the M42) for test purposes. I did hear, at the time, that they also put one in a BMW 3-Series (E36) because, at one stage, the S-Type as it became was intended to be similar in size to a 3-Series not a 5-Series. The prototype engine had so much torque it kept eating the BMW’s diff and gearbox!!!

    Getrag from Germany developed a box just so they could run the E36 test mule. This didn’t help because in the end the power from the engine kept bending the front sub frame etc. so they gave up and stuck to using the XJS.

    It’s a shame the X-TYPE wasn’t developed at the time with a view of sticking the V8 into a top line model!!! I think the problem with the X-TYPE was that it didn’t excite the buying public enough as it should have even though it was well made, had 4 wheel drive and was compact. I think it looks great as an estate(Car of The Month) but it did need a pumped up boy racer model to attract the young drivers such as the M3. Volvo had the same image problem until the Volvo 850T went racing (think Margo & Gerry in The Good Life). It’s mad to pull out of this market but, at the end. of the day the X type is 9 yrs old.

    By the way, I’ve been told to “wait until you see the new XJ in the metal” – it has a lot of road presence rather like the old 420G had in the 60s. If the new XJ drives like the new XF R that Clarkson drove last night, then I hope that the Credit Crunch hurries up and finishes because I, for one, would like to see more Jags on our motorways rather than the current Blitzkrieg of BMWs etc..

  22. Andrew McCheyne says:

    The X-TYPE was supposed to appeal to the young – there should have had been a racy coupe and a convertible but Ford only made an estate and a four door. No surprise it didn’t sell. The conservative styling didn’t help.

  23. Alex Scott says:

    Interesting themes here, the Rover badge, development costs and so on.

    My personal opinion on all this is that JLR’s success will turn on how badly the employees want the company to succeed. Obviously there have been some significant gains made in quality. However, given that we are in tight economic times, you would think the designers and Jaguar test drivers and even Stadco would be working really hard over time to come up with some new ideas to cover all bases, and putting some more of their own time into it.

    I agree the process of a tweaking a body (updating it) with all the the design and cnc machines available today shouldn’t be so hard and updating the body should be easy. You would think that Stadco would be equally keen to assist to tweek some panels.

  24. Merlin Milner says:

    I am sure that the X-TYPE is being dropped for other reasons – mainly because it uses many old Ford parts which JLR have to buy from Ford.

    It would not surprise me if Jag came out with a new model which shared a platform with a Tata saloon in a few years time. Perhaps that new model will be made in India??

  25. John says:

    Apart from the crummy facelift (on, the similarities with the 75!), I still like the X-Type. Such a shame that it wasn’t a success. 
    I’m looking forward to seeing what the replacement looks like and hope that it will continue to be built in the UK.

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