Press Report : JLR denies that Castle Bromwich plant will be axed

John Cranage, Birmingham Post, 24th September, 2009

Speculation that Jaguar Land Rover’s Castle Bromwich assembly plant in Birmingham faces the axe under a fresh wave of cost cuts was played down by the company last night. The Indian-owned luxury carmaker is believed to be drawing up drastic plans to cut losses in the wake of a meltdown in sales caused by the recession and the 18-month-long credit crunch.

It is thought these will be outlined to members of the Joint Negotiating Committees covering all six JLR sites – Castle Bromwich and Solihull’s Lode Lane, Halewood on Merseyside and the Gaydon and Whitely engineering centres – by chief executive David Smith at a meeting on Thursday.

The theory that JLR’s owner, Tata Motors, believes that maintaining three car assembly plants is no longer feasible in the prevailing economic climate has been gaining ground within the automotive industry for some time.

Halewood will be left with just the Land Rover Freelander once production of the Jaguar X Type ends later this year and that was thought to have made it the most vulnerable to closure, even though it is earmarked the build the new low carbon “baby” Range Rover codenamed LRX. However, offsetting that, is the fact that Halewood, the former home of the high volume Ford Escort, is highly rated for its flexibility, efficiency and quality.

One industry insider told the Birmingham Post yesterday it was likely the West Midlands was now the focus of JLR’s cost cutting programme. “I suspect there will be only one plant left in the West Midlands and that is likely to be Lode Lane because it is where the whole Land Rover story started and would be very difficult to shut. The implication is that the most vulnerable plant is Castle Bromwich,” the source, who asked not to be named, said.

I suspect there will be only one plant left in the West Midlands and that is likely to be Lode Lane because it is where the whole Land Rover story started and would be very difficult to shut. The implication is that the most vulnerable plant is Castle Bromwich,” An unnamed Automotive Industry insider

A spokesman for JLR said last night said talk of closing the plant, which was built in the late 1930s to build Spitfire fighters, was “wide of the mark”. He went on describe today’s meeting of the Joint Negotiating Committees as “routine” and said there would be no announcement of a plant closure or job losses.

JLR’s model investment programme is also expected to progress as planned and compulsory redundancies seem to have been ruled out. Tata recently brought in KPMG and Roland Berger Strategy Consultants to advise JLR on how to cut costs, boost cash flows and return to profit.

The twin companies, the only mainstream carmakers left in the West Midlands, slumped to a multi-million pound loss in 2008 from a profit of £660.5 million the year before, a deterioration of nearly £1 billion. Tata Motors blamed falling sales at its prestigious marques for its own £41 million last year.

The group, which eventually raised fresh capital on the international credit markets after failing to win a commercial loan, or even a loan guarantee, from the UK Government, faces paying down debts of £4.35 billion, most of it incurred when it bought Jaguar and Land Rover from Ford last year.

The recession has already cost some 2,000 jobs at JLR as well as cuts in output but normal working has recently been restored at both Castle Bromwich, which is now building the new XJ, Jaguar’s flagship model, and at Lode Lane where updated 2010 versions of the Range Rover and Discovery are coming on stream.

[Source: Birmingham Post]

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.

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