Published: Fri, January 11, 2019
Worldwide | By Myra Stephens

Jaguar Land Rover to cut 4500 jobs in Brexit slump

Jaguar Land Rover to cut 4500 jobs in Brexit slump

Jaguar Land Rover said it will cut around 4,500 jobs, mainly in its home United Kingdom market, as it tries to tackle a slowdown in China and a slump in demand for its diesel-powered vehicles.

But it's also spent millions of pounds trying to prepare for Brexit, which could have a disastrous effect on its European sales.

Business Secretary Greg Clark said the company was offering voluntary redundancy packages to its United Kingdom workforce, adding: "This is a commercial decision for the company but nevertheless it will clearly be a worrying time for Jaguar Land Rover employees and their families".

Unite, the country's largest manufacturing union, said it would be pressing the auto maker to safeguard its members' jobs.

The Tata Motors-owned company has unveiled plans to cut costs and improve cash flows by 2.5 billion pounds including "reducing employment costs and employment levels".

Brexit has been a particular drag on the UK.

The company also announced new investment in electric technology at its Wolverhampton engine manufacturing centre and the launch of a new battery assembly centre at Hams Hall, North Warwickshire.

JLR said demand in China, once one of its strongest countries, fell by 21.6 per cent in 2018, the biggest drop of any of its markets.

"We are taking decisive action to help deliver long-term growth, in the face of multiple geopolitical and regulatory disruptions as well as technology challenges facing the automotive industry", JLR chief executive officer Ralf Speth said in the statement. The company already cut 1,000 jobs a year ago, but new plans to improve cash flow by £2.5 billion ($3.2 billion) include "substantial" cuts to employment that will run into the thousands, a source told Reuters, affecting managerial, research, sales and design staff, but not line workers.

The vehicle industry has suffered a triple blow as three of the UK's biggest manufacturers announced job and production cuts.

Jaguar Land Rover announced it is cutting thousands of jobs.

The cost-cutting plan was first unveiled in October past year and put down to losses created by Brexit uncertainty and slowing demand in China.

A Ford spokesman said the vehicle maker now assumes that any Brexit deal would keep tariff-free trade between Britain and Europe.

JLR has warned of further losses in the event of the United Kingdom leaving the European Union with a poor trade deal or no deal.

China is the company's biggest and hitherto most profitable market.

In Jaguar Land Rover's case there are some additional factors beyond the slowdown in the Chinese economy and cautious consumer spending. Production-line workers won't be affected, they said.

JLR, which became Britain's biggest carmaker in 2016, had been on course to build around 1 million vehicles by the turn of the decade, reported on Thursday a 4.6 percent drop in full-year sales to just under 600,000 vehicles.

It has hired 4,000 workers in China since 2014.

In the United Kingdom the company runs three car-making factories: Solihull, Castle Bromwich and Halewood.

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