JAGUAR AXES 1,000 JOBS AS UK VEHICLE MARKET SLUMP CONTINUES TO DEEPEN
By Simon Beavis, Keith Harper, and Celia Weston
Jaguar, the luxury car maker, yesterday announced plans to axe 1,000 jobs, almost a tenth of the workforce, as new figures confirming the continuing collapse of the UK car market showed sales tumbling by nearly 21 per cent in January.
The Jaguar job cuts come on top of seperate plans announced yesterday to put 8,000 production workers on part pay for two weeks in every three. The cutbacks are among the most draconian undertaken by any car manufacturer to combat high interest rates and growing recession and brought calls from both sides of the industry for an immediate cut in borrowing costs. Mr Bill Morris, deputy general secretary of the Transport and General Workers Union, said the Jaguar lay-offs reflected the “appalling state” of the economy.
“Without a rapid change of direction –which must start with a cut in interest rates—we are looking towards a catastrophe in Britain’s vital manufacturing base,” he said.
Jaguar, now part of Ford, saw its sales drop by 10 per cent last year. But sales last month fell 47 per cent reflecting the deep gloom afflicting the luxury car market under the dual impact of recession and the Gulf crisis. The Jaguar job cuts and lay-offs will fall across its three plants in Coventry and Birmingham, where it employs a total of 11,800 staff.
The company said it was hoping to cut 400 jobs through an early retirement programme while it was looking for a further 600 redundancies through a voluntary severance scheme. The severence scheme is to be put to unions today. Production staff at the companies Browns Lane and Radford plants in Castle Bromwich and Castle Bromwich site in Birmingham will from next week also go on to a “one week on, two weeks off” production system which will last at least until the end of March. Staff laid off will qualify for only 120 hours of full pay in any one quarter.
The crisis at Jaguar comes after an expensive pay round for Britain’s car manufacturers with inflation plus settlements agreed at most companies. The Rover deal for 31,000 hourly paid workers runs for two years giving 11 per cent this year and a further 7.5 per cent in November. The company said that the deal, which includes improved sickness and holiday benefits, will give them two years stability.
The Jaguar two year deal was particulary generous given the decline in the quality car market. Workers voted by a narrow majority for a 12.5 per cent package for 1990 and this year for either 7 per cent or the rate of inflation, whichever is the greater. The Jaguar deal, had benefits for the company. In return for high pay levels, the company secured improved flexible working designed to do away with remaining restrictive practices on the shopfloor. The company maintains that this alone produced savings of 4 per cent on the wages bill.