Press Report : JLR’s closure plan raises fears for thousands of jobs

Jon Griffin, Birmingham Post, 24th September, 2009

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Thousands more car jobs looked doomed today with the announcement that Jaguar Land Rover is to close either its Castle Bromwich or Solihull factory. Unions were left shell-shocked as JLR confirmed that one of its two flagship factories would shut by the middle of the next decade. Meanwhile, a new Range Rover will be built at Halewood, on Merseyside, creating 800 jobs.

The bombshell news came just months after unions agreed a one-year pay freeze and a four-day week for thousands of workers across JLR in return for no compulsory job losses for two years.

However, JLR said today: “As the company reduces engineering complexity for its new product range, West Midlands manufacturing will transfer from two plants to one by the middle of the next decade, improving efficiency and cost. Further cost reductions include pension restructuring, lower employment costs for new staff and a focus on IT and business simplification. The entire package of measures does not envisage any compulsory redundancies.”

Suggestions that one JLR plant could close had earlier been dismissed as “wide of the mark” by the company, just 12 hours before the news was confirmed.

Suggestions that one JLR plant could close had earlier been dismissed as “wide of the mark” by the company, just 12 hours before the news was confirmed.

Jaguar Land Rover Chief Executive Officer David Smith said: “This is a plan that recognises the impact the economic collapse has had on our business. The car industry has been through an unprecedented recession. New car sales, including those of JLR, are down globally by 25 to 30 per cent. This has resulted in manufacturing capacity utilisation of less that 60 per cent of JLR, which combined with the credit crunch, has exposed fundamental weaknesses in the structure of the business.”

Mr Smith said JLR’s situation was not sustainable despite a string of production cuts and voluntary redundancies. Night shifts were re-introduced at Solihull in the summer amid renewed optimism of demand for upgraded models from Lode Lane but JLR has so far not committed itself to the likely locations for replacement models for the Range Rover and Range Rover Sport which are key to the future of the Solihull plant.

Unions have not yet won assurances from Tata over a vital product overhaul to safeguard thousands of jobs at Lode Lane for years to come. In July it was announced that Tata had sent in consultants to JLR in a new bid to stem cash losses and drive the group back to break-even point, appointing KPMG and Roland Berger Strategy Consultants.

As MP for Erdington, my message to Tata is clear. Jaguar must not close. It is the jewel in the crown. It is vital it stays open. As a Birmingham MP, my message is that Land Rover must not close either.” Sion Simon MP

The announcement of the move came after Tata revealed pre-tax losses for Jaguar and Land Rover combined of nearly £350 million in 2008 compared with a pre-tax profit for the two marques of £660.5 million in 2007. The consultancy move follows around 2,000 voluntary redundancies across JLR over the past year and a series of production cuts at both Solihull and Castle Bromwich.

Sion Simon MP (Erdington, Lab) whose constituency includes the Castle Bromwich site, said: “As MP for Erdington, my message to Tata is clear. Jaguar must not close. It is the jewel in the crown. It is vital it stays open. As a Birmingham MP, my message is that Land Rover must not close either.

“The good thing about this announcement is that it is the beginning of a long process, and we have got time to make the case to keep plants in both places. It is also good that they are promising there will be no job losses. But it is vital for Erdington that the Castle Bromwich site remains.”

[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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  1. Richard says:

    I think that both factories would be able to stay open if there was a dramatic increase in sales from current levels. For example, Jaguar need a lower-consumption XF now, not in three years time. Retiring wounded from the X-TYPE segment is unfortunate timing too, with everyone looking for more economical cars.

  2. Russ Jones says:

    It would be nice to see both factories stay open but I would be prepared for another MG Rover – the Government will certainly do as little as possible to help unless JLR re-brands as a bank and everyone on the production line wears a suit. Yes, the product portfolio might feature more economical models but Jaguar and Land Rover are renowned for prestige vehicles. Never mind, though, Mr Brown you can travel to Westminster in a Tata Nano – I’m sure you will look the part…

  3. Alain says:

    The one thing JLR has to do very, very urgently is to build a new Rover 75 – not small, not too big. Now only the upper class can buy a Jaguar or Land Rover. Middle class customers have to go shopping at Audi, BMW and Mercedes.

    I think JLR has to wake up and recognise that they need a car like Audi A4, BMW 3 Series or Mercedes C Class and they have the right name for it: Rover. I fear that otherwise JLR will end up like MG Rover. Nice MG SV, but no new Rover 45 or 75 and 6,000 people on the street.

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