World News

Jaguar Land Rover to slash United Kingdom jobs after China, diesel drop

Jaguar Land Rover to slash United Kingdom jobs after China, diesel drop

Auto giant Jaguar Land Rover is to cut 4,500 jobs under plans to reduce costs by £2.5 billion, the company has announced.

JLR chief executive Ralf Speth said a tidal wave of "unprecedented" challenges to the upmarket auto maker meant it was slashing about a tenth of its workforce - the bulk of which are in the United Kingdom - to "protect the future" of the business.

The anticipated announcement of job losses on Thursday is not the first time the company has made cutbacks in recent years.

"In the last couple of decades, Ford of Europe has never really been sustainably profitable", Steven Armstrong, company vice-president and head of its operations in Europe, Middle East and Africa said in a conference call with reporters.

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. Total vehicle sales in China (JLR's biggest market) declined for the first time in two decades previous year, as the nation's consumers reacted to the economic uncertainty surrounding the introduction of USA trade tariffs.

Ford said it will seek to exit the family vans or MPV segment, review its operations in Russian Federation, and combine the headquarters of Ford U.K. and Ford Credit to a site in Dunton, Essex to achieve a 6 per cent operating margin in Europe.

Ford lost $245 million in Europe in the third quarter as sales slumped in Turkey and Russian Federation. This latest round of cuts comes on top of the 1500 jobs Jaguar Land Rover cut a year ago. It lost 354 million pounds between April and September 2018. Diesel has been pummelled since the Volkswagen emissions cheating scandal of 2015, prompting a crackdown and higher levies, Reuters reports.

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The move, also thought to be a result of lower demand for diesel cars, forms part of cost-cutting plan worth £2.5bn, which was devised after JLR suffered hefty financial losses in 2018. It is also working to ramp up its electric auto production.

"In smaller vehicles the diesel decline is accelerating".

"Revealing the iconic Defender, investing in cleaner, smarter, more desirable cars and electrifying our facilities to manufacture a future range of British-built electric vehicles will all form part of building a globally competitive and flourishing company", he added.

The company has also been grappling with the cost of Britain's decision to leave the European Union on 29 March. "If Brexit went in the wrong direction we would have to have another look, to mitigate that", Armstrong said.

Commenting on the development, Ralf Speth, Chief Executive Officer of Jaguar Land Rover, 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".

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

"Rolls-Royce belongs to Britain", he said.


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