John Willman, Business Editor, FT.com, 14th January, 2009
Jaguar Land Rover is cutting 450 white-collar jobs in its UK operation, as the economic downturn continues to hit sales at the Indian-owned manufacturer. The company, which only resumed production this week after a three-week Christmas break, will cut 300 management positions and a further 150 salaried agency personnel.
As a further cost reduction measure, managers will not receive bonuses in 2009 and any management pay increases has been deferred to October 1 at the earliest. The company, owned by Tata Motors of India, axed 850 agency workers last year and is currently seeking just over 500 volunteers for redundancy from the hourly-paid production staff.
The programme, which closes at the end of the month, was launched in September – initially with a target of 198 volunteers, which was raised in November. David Smith, Chief Executive of Jaguar Land Rover, said the severe reduction in demand meant costs had to be reduced across all grades and functions in the company.
“We don’t expect sales conditions to return to normal levels for some time. If we are to continue to fund and invest in the products and technology that we will need to be successful when customer demand picks up again after the recession, then we have to improve our efficiency and costs, to improve our ability to respond to the marketplace.
“It is critical that Jaguar Land Rover becomes a more efficient and dynamic organisation to face up to the challenges that we will meet in the years ahead.” The company employs 15,000 people making Jaguars and Land Rovers at Halewood on Merseyside, and in the west Midlands making Jaguars at Castle Bromwich and Land Rovers at Solihull.
Jaguar sales rose 8 per cent last year – buoyed by the introduction of the new XF sports sedan – but Land Rover’s sales of four-by-fours slid 30 per cent as car buyers shunned larger vehicles. Like Britain’s other carmakers, the company is seeking emergency funding from the government. Tata, which brought the company from Ford in March for $2.3bn, has poured tens of millions of pounds into the company as sales have slumped.
Paul Everitt, Chief Executive of the Society of Motor Manufacturers and Traders, said the announcement demonstrated the need for urgent action to deal with the damage caused by the downturn and retain valuable industrial capability.
”Government must ease access to credit and finance, incentives for companies to retain skilled employees and maintain investment in new technology, provide incentives to encourage the take-up of new vehicles and maintain public procurement of new vehicles. These measures will ensure the UK automotive industry is best placed to exploit the economic upturn when it comes.”
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