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.]
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