The car industry has suffered a triple blow as three of the UK’s biggest manufacturers announced job and production cuts.
Car giant Jaguar Land Rover is to reduce its 44,000 workforce by 4,500 under plans to make £2.5 billion of cost savings.
Most of the cuts will be in the UK, with a voluntary programme being launched, and are in addition to 1,500 workers who left the company last year.
Ford signalled “significant” cuts among its 50,000-strong European workforce under plans to make it more competitive and make its business more sustainable.
Japanese firm Honda later announced six non-production days in April under contingency plans to mitigate the risk of disruption to production at its Swindon factory after the UK leaves the EU.
Ralf Speth, chief executive 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.”
The company also announced further investment in electrification, with electric drive units to be built at its factory in Wolverhampton and a new battery assembly centre at Hams Hall in Birmingham.
JLR has sites in Halewood on Merseyside and Solihull, Castle Bromwich and Wolverhampton in the West Midlands.
In October last year, the car giant unveiled a £2.5 billion turnaround plan that included cost cutting after Brexit uncertainty and slowing demand in China left it nursing a hefty second-quarter loss.
The firm, owned by Indian conglomerate Tata, booked a £90 million pre-tax loss in the three months to September 30, which compared with a £385 million profit in the same period in 2017.
In China, demand was adversely impacted by consumer uncertainty following import duty changes and escalating trade tensions with the US.
In the UK, “continuing uncertainty related to Brexit” was blamed.
Ford started consultations with unions, with details of job cuts not expected until later in the year, although staff based at Warley in Essex will move to Dunton.
Steven Armstrong, Ford’s European group vice president, said the company was taking “decisive action” to transform its European business.
He said: “We will invest in the vehicles, services, segments and markets that best support a long-term sustainably profitable business, creating value for all our stakeholders and delivering emotive vehicles to our customers.”
New all-electric vehicles will be offered for all Ford models, while there will be a more “targeted” line-up of models in the future.
Mr Armstrong said Ford was making “tough” decisions by undertaking a “complete review” of its European operations.
He said the announcement was not directly linked to Brexit, but he added that Ford will have to undertake a further review if the UK leaves the EU without a deal in March.
Mr Armstrong declined to say how many jobs will be cut, but he said the impact will be “significant”.
Unite, the UK’s largest union representing car workers, said it would be engaging positively with Ford to look after the interests of its UK employees after the carmaker announced a shake-up of its European operations today (Thursday 10 January).https://t.co/GB5cOAB5yF
— Unite the union (@unitetheunion) January 10, 2019
Unite national officer Des Quinn said: “Unite is positively engaging with Ford over its plans as we seek to safeguard jobs and look after the interests of all the company’s employees in the UK.
“We expect the immediate impact on Ford’s UK operations to be limited.”
On the JLR cuts, Mr Quinn said: “With record levels of new investment and models set to come on stream in its UK factories, we look for Jaguar Land Rover to continue to be a global success and the jewel in Britain’s manufacturing crown.
“Britain’s car workers have been caught in the crosshairs of the Government’s botched handling of Brexit, mounting economic uncertainty and ministers’ demonisation of diesel, which along with the threat of a no-deal Brexit, is damaging consumer confidence.”
Business Secretary Greg Clark said the company was offering voluntary redundancy packages to its UK 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.
“The Government has and will continue to work closely with the business to ensure that it can succeed long into the future as it invests and transitions to autonomous, connected and electric vehicles.
“Jaguar Land Rover and its owners have made clear they remain firmly committed to the UK, continuing to invest billions and employing tens of thousands of people.”
Dr Speth stressed that JLR was committed to growing its UK business and would continue to invest to protect the future of its two “iconic” car brands.
The company reported that its sales last year were down by 4.6% to 592,708.
Honda said: “Honda has been assessing how best to prepare for any disruption caused by logistics and border issues following the UK leaving the EU on March 29.
“To ensure Honda is well placed to adjust to all possible outcomes, we are planning six non-production days in April.
“This is to facilitate production recovery activity following any delays at borders on parts. These contingency provisions have been put in place to best mitigate the risk of disruption to production operations at the Swindon factory.”
