Jaguar Land Rover confirms 4500 job losses as part of 'transformation plan'

Jaguar Land Rover (JLR) has confirmed it will cut 4500 jobs from its UK workforce as part of a major cost-cutting programme aimed at building long-term, profitable growth.

The cuts account for around 10 percent of the Tata-owned company’s 43,000-strong staff across the country, which includes plants in Castle Bromwich, Solihull and Halewood. The job losses are in addition to 1500 workers cut last year.

Though the numbers of jobs cut at specific locations have yet to be announced, CEO Dr Ralf Speth of JLR has told the media on a conference call that "all locations" within the UK will see some form cuts, focused on "the management and leadership areas of our facilities" Workers will initially be reduced through a voluntary redundancy programme, or via the offer of early retirement packages.

JLR CEO Ralf Speth said: "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. The ‘Charge and Accelerate’ programme combines efficiency measures with targeted investment, safeguarding our future and ensuring that we maximise the opportunities created by growing demand for autonomous, connected, electric and shared technologies.”

The announcement today by the UK’s largest car manufacturer follows falling demand for its saloon cars and diesel engines, along with a sharp fall in sales in China of 21.6 percent in 2018. As a result, it posted a loss of £90 million (Rs 809 crore) in the third-quarter of 2018.

The firm has also released its full year's sales figures for 2018, confirming an overall drop across both brands of 4.6 percent compared with 2017. Out of a total of 592,708 vehicles, nearly 181,000 Jaguars were sold (a modest 1.2% growth on 2017) and just under 412,000 Land Rovers (a 6.9% drop on 2017).

As well as the Chinese slump, JLR – and to some extent, the broader car market – has been affected by a number of other factors including Brexit, US trade tariffs, negativity around diesel and new WLTP regulations.

The job cuts form part of what JLR calls a “turnaround and transformation programme” which is set to improve cashflow and costs to save £2.5bn (Rs 22,472 crore) over 18 months.

JLR cut 1000 jobs at its Solihull plant – which it also shut down for two weeks in October last year due to reduced demand. In December, its Castle Bromwich site, which produces models including the XE and XF, operated on a three-day week.

No factory closures and electric investment
Despite the job losses, JLR has made no mention of any plans for immediate factory closures. Speth said he "refuses to comment" on such matters, saying "we have to wait for politics - what will happen after 29th March?" in another reference to the potential effect of a hard Brexit on production efficiency.

It did, however, confirm further UK investment in electrification with electric drive units to be made at its Wolverhampton powertrain plant from 2020. It said the move will help safeguard jobs at the plant as buyers move away from internal combustion engines.

There will also be a new battery assembly centre at Hams Hall, described as one of the largest of its kind in the UK, using new production techniques and technologies to produce battery packs and modules for future Jaguar and Land Rover models.

The focus on the production of electrified powertrains reinforces the firm’s announcement in 2017 that every JLR vehicle launched from 2020 will have an electrified variant. It already offers plug-in hybrid Range Rover and Range Rover Sport models, as well as the well-received electric Jaguar I-Pace. 

New models on the cards
There was also no mention of any plans to scrap any of JLR's 13 model lines in the announcement. Autocar sources also suggest that the firm is continuing to evaluate entering new segments where premium growth is likely.

This year, the second-generation Range Rover Evoque will go on sale and the highly anticipated new Land Rover Defender will be revealed. Further down the line, an electric Jaguar XJ is expected as is a J-Pace, a large SUV to sit at the top of Jaguar’s growing SUV range. 

Most growth is expected through its SUVs, which tallies with the broader market trends, while the biggest question mark is over Jaguar’s saloon range which has struggled against German rivals.

Jaguar Land Rover sales fell 4.6 percent last year to 592,708 units. UK sales were down a modest 1.5 percent to 115,691, while China was worst hit. Sales there fell 21.6 percent from 146,399 units to 114,826 units. That means both Europe and North America now lead sales for JLR, putting China in third place. By comparison, in 2017, Chinese sales topped JLR’s chart.

The company said it remains fully committed to the Chinese market and added it has long-term confidence in the Chinese market. The recent fall is being blamed on ongoing uncertainty on import duty charges and trade tensions.

Also read: Tata Motors' sourcing strategy evolves with its turnaround plan

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