Recovery for Jaguar Land Rover hit by limited sedan demand in UK

Jaguar Land Rover (JLR) still has more than 3000 workers on furlough, with production of its sedans still greatly reduced at its Castle Bromwich factory in UK, according to reports.

The Guardian reports that it has seen confidential production plans confirming the British manufacturer – which is owned by the India's Tata – has a substantial number of its workforce still furloughed under the UK government’s job retention scheme.

JLR was forced to suspend production due to the lockdown across UK in March and placed many of its workers on the furlough scheme. While most of its plants are now operating at close to pre-pandemic levels, with two production shifts, the reports suggest Castle Bromwich, where the Jaguar XE, XF and F-Type are produced, is still running at substantially reduced capacity.

The Guardian claims JLR plans to produce around 11,000 cars there in the financial year that ends in March 2021 – around 4000 F-Types, 3500 XEs and 3500 XFs. Last year, the facility produced 35,000 cars.

Fewer than 300 XEs will be produced each month for the rest of 2020, although the number is expected to increase as the updated version goes on sale. The reopening of the plant is understood to have occured as production shifted to the facelifted XE and XF model, and JLR focused on readying the new machines before scaling up production. 

While JLR has more than 3000 staff furloughed, The Guardian claims that every other UK car maker now has fewer than 80 staff on the scheme, which will conclude at the end of this month. However, Jaguar Land Rover is the UK's largest automotive car maker, with more than 30,000 staff, and at the peak of the lockdown around 20,000 of those were on furlough.

JLR said that the number currently on furlough has been reducing each week as production has ramped up and the end of the furlough scheme approaches.

The firm is planning a "small number" of job cuts – understood to be between 100 and 200 – via a voluntary redundancy scheme at the end of the scheme, which will be aimed at management and salaried staff currently on furlough.

Other employees are set to return to work after the end of the scheme, although JLR told The Guardian that it has yet to decide if it would make use of the government’s new job support scheme, which will pay up to 22% of the salary of workers on reduced hours.

In a statement JLR said: "“As the UK Government’s furlough scheme comes to an end, Jaguar Land Rover is implementing a very small targeted voluntary redundancy programme for some management and salaried employees currently on furlough.

“This is a prudent step given the challenges facing the global automotive industry in which we compete, giving these employees the choice to consider new opportunities outside of the company having been out of the business for more than seven months.”