Press Report : Jaguar Land Rover factory may survive as sales rise

The Sunday Times, 18th April, 2010

Jaguar Land Rover (JLR) is weighing a dramatic about-face on plans to close one of its three UK production plants.

Sources close to the Midlands carmaker say that a recent revival in sales coupled with the arrival of a new management team has led to a review of the closure plan. A final decision may rest on talks with the British Government about financial assistance for new models.

JLR, which employs about 14,000 people in the UK, said in September that it planned to close one of its factories. Its plant at Halewoood on Merseyside was safe, with the axe to fall on one of the Midlands sites, Castle Bromwich or Solihull. An announcement on which was to close was expected this summer.

Since then Tata, the Indian group that owns JLR, has brought in new management from Germany, hiring CarlPeter Forster, a former boss of General Motors in Europe, and Ralf Speth, previously a BMW executive. The JLR sources said Forster and Speth were now considering a business plan that would see both marques launch models and increase production. The plan could require keeping all three plants open.

JLR is likely to seek Government assistance tied to the launch of new models. The request could prove tricky. Two years ago Tata asked the Government for a £1 billion loan guarantee to tide it over a slump in sales caused by the credit crisis. Talks dragged on for months until Tata finally announced it had been able to secure the necessary finance from other sources. The plant closure plan was announced not long after the talks with the Government broke down and JLR embarked on a cost-cutting drive.

The sources say Tata and senior JLR management have been irritated by the Government assistance provided to General Motors. Lord Mandelson, the Business Secretary, recently agreed to provide a £300m loan guarantee to help safeguard jobs at the UK plants of Vauxhall, GM’s UK subsidiary.

Sales at JLR have enjoyed a remarkable renaissance since the start of the year. Land Rover has been the standout performer — it sold 67% more vehicles in the UK last month than in March 2009, while global sales last month rose by 43%. Jaguar, which has traditionally relied on America for the bulk of its export sales, is developing new markets in China and other Asian countries.

[Source: The Sunday Times]

[Editor’s Note: AROnline readers may also wish to read the following two articles from the Birmingham Post last month: New Jaguar Land Rover boss may rethink plant closure, Alun Thorne, 29th March, 2010 and Unite pledges to fight to save Jaguar Land Rover car plants, Alun Thorne, 31st March, 2010.]

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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  1. Bill says:

    A missed opportunity not to shut Solihull… The quality of the cars made there is appalling. Moving production to a Jaguar plant would dramatically improve quality and thus sales. Tough to hear, but some one has to say it: to save Land Rover in years to come, shut Solihull now.

  2. David says:

    Is the quality of Jaguar’s models significantly better than that of Land Rover’s? Is it ultimately related to the assembly plant or those employed in it? Is Castle Bromwich big enough to enable four Land Rover models to be built there? Is the only benefit of selling off the Solihull assembly plant the fact that the site also comes with a huge amount of surrounding countryside that can be flogged off to the highest bidder for yet more houses to blight our countryside?

    The quality of Land Rover’s products has improved dramatically over the last five years thanks to the current line-up and huge investment by Ford (although I admit that, before then, it was something to be less than satisfied with). Sorry, but prior to the launch of the current XF, Jaguar’s quality was average at best, not class leading.

  3. Bill says:

    @David
    Sorry, but have you seen Land Rover owner reviews? No other car has as much bad press as a Land Rover – just Google “Land Rover problems.” The problem is that I still want one, but please build them not to fail.

  4. David says:

    Neither of these comments address the underlying cause behind these quality issues. Simply closing down an assembly plant (if it is not the fault of assembly equipment or other related facilities etc.), won’t necessarily ensure that quality issues will improve just because vehicle assembly is moved to other assembly plants.

    The more important issue to determine, at a focused level, is where the quality problems ultimately lie i.e. poor quality of components manufacturered inhouse or by external suppliers, the assembly process of the vehicles in question or equipment used, the skills of employees, the list goes on… Only then can decisions be based on whether transferring production to other locations will ultimately resolve these problems.

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