Jaguar to shed 1,100 jobs

Production of Jaguar cars is to end at one of its main UK factories, with the loss of more than 1,100 jobs, the company announced today.

Around 750 white collar workers and 400 production staff will lose their jobs at the Browns Lane site in Coventry, but Ford, which owns the company, said there will be no compulsory redundancies.

The firm tried to sweeten the devastating blow by announcing that it will be creating 300 new jobs at its Aston Martin plant in nearby Gaydon.

Union leaders were given the news at a meeting with senior Ford and Jaguar executives in the West Midlands.

Jaguar said production of its XJ saloon and XK sports models will transfer to its factory at Castle Bromwich in the West Midlands.

Around 425 jobs will be transferred from Browns Lane, which has been producing cars for more than 50 years and currently employs more than 2,000 workers.

Jaguar said 310 jobs will be retained at the Coventry site.

Jaguar said there would be 400 voluntary redundancies on the ``best ever'' terms given by the company.

The firm said there be a potential net loss of 100 manufacturing jobs as a result of today’s announcement.

A “substantial” programme of support will be given to workers affected by the changes.

Jaguar said that Coventry would remain as its home and Browns Lane would continue to be its headquarters.

One of its most famous cars manufactured at Browns Lane was the E-type which became an icon of the 1960s.

The 310 workers remaining at Browns Lane will be employed on the wood veneer facility.

Union leaders condemned the announcement and vowed to “fight like tigers” to keep the manufacture of quality cars in the UK.

The Transport and General Workers Union and Amicus said they were concerned the decision could lead to further closures in the future.

They warned that they intended to “draw a line in the sand” to prevent any further job cuts.

Both unions said the loss of hundreds of skilled jobs would have a devastating effect on the regional economy.

Browns Lane, they said, had recently been identified as one of the top performing car plants in Europe for both quality and production and its closure would not sort out Jaguar’s basic problem which was the need to increase sales.

“We are not prepared to British workers to be treated as cannon fodder to satisfy American shareholders,” said Tony Woodley, general secretary of the TGWU.

“We will be consulting our members and giving them leadership to fight for their plants and jobs. It is also likely that we will be consulting with our members across Ford in the UK.”

Derek Simpson, general secretary of Amicus, said: “Ford’s decision may kill off Jaguar. Our members will fight like tigers to keep the lion’s share of quality car manufacturing in Britain.”

Joe Greenwell, chairman and chief executive of Jaguar said: ``Our new business plan was developed following a rigorous review by the Jaguar management team.

“We examined a number of alternatives and I would not be presenting this plan today had I not been absolutely convinced that it is the right plan and completely necessary.

“The plan is wide-ranging, extends over a number of years and touches most aspects of the business. It also includes some severe measures that we do not take lightly. But that is a reflection of the highly competitive and global nature of the business we are in.

“The fact is despite significant sales growth and excellent levels of quality in recent years, we have not been able to keep pace with significantly larger competitors.

“We have too much capacity and this is our underlying structural problem. Our bottom line has further deteriorated this year with the weakness of the dollar and unprecedented incentives in the premium market.

“We had no choice but to take action and I firmly believe that all the elements of this plan are essential if we are to stem the losses.”

Mr Greenwell said that despite the difficult business circumstances, it was the intention to do everything possible to achieve the restructuring on a voluntary basis.

“It is with deep regret that we have had to announce some actions today which affect people’s jobs. However I can give everyone my personal assurance that we will do everything we can to support those affected.

“The package of actions we have announced today will focus on the issues we currently face and will help position Jaguar for a bright future founded on strong product plans, a leaner cost structure and a stronger focus on margins in the market place. I believe this plan is essential to Jaguar’s future and will enable us to contribute more positively to Ford Motor Company’s bottom line.”

Mark Fields, Ford’s most senior executive in Europe, said: “Decisive action was needed to get Jaguar back on track and to ensure a viable future. Despite the actions taken by the company’s management over the past few years and despite the fact Jaguar is again the highest rated European brand on product quality, Jaguar is back in a serious loss-making position.

“There are a number of external factors which have exacerbated the situation but we have faced and tackled the fundamental reality, that Jaguar simply cannot support three assembly plants with annual sales of 125,000 cars.

“Manufacturing capacity although a significant factor is only part of the issue and the solution. What we have developed is a series of actions to strengthen Jaguar. These also include a leaner organisation structure on the cost side of the equation and on the revenue and brand side, a package of product and marketplace actions which will drive the company forward in a way which is more appropriate for the brand and will drive a better bottom line.

“There is massive global affection for the Jaguar brand but frankly we were operating to a business model that really offered little chance of generating sustained profitability except in times of favourable exchange rates. That had to change. The challenges we faced were both strategic and tactical requiring attention to all elements of the business. This plan has the full backing and support of the Ford management team.”

Jim Padilla, chief operating officer, Ford Motor Company and chairman, automotive operations, said: “Jaguar is one of the most respected, valued and desired line of cars in the world.

“The Ford Motor Company is committed to Jaguar and its customers, and we will continue to support this incredible brand and management team. The actions we are taking today, while difficult, are absolutely necessary to set Jaguar back on the right path and ensure a strong and sustainable business for the future.”

Jaguar confirmed that a new all-aluminium sports car, codenamed X150 will go on sale early in 2006.

The XJ range will be extended with the introduction of a diesel engine next year following an increase in demand for luxury diesel saloons in Europe.

Jaguar has already announced that production will be cut back by 15,000 this year because of a drop in demand.

The company said it will work closely with unions, the Government and local development agencies to implement the changes.

The 750 white collar cuts will include 500 salaried employees and 250 agency positions.

Trade and Industry Secretary Patricia Hewitt said: “Today’s announcement is obviously disappointing, particularly given the workforce’s efforts to improve quality and productivity at Browns Lane. However, given the company’s financial performance, tough decisions had to be taken.

“I have encouraged Jaguar’s management to ensure that their workforce and trade unions remain informed and consulted, and that they discuss what further steps might be taken to mitigate further job losses. However, it’s important to note that no compulsory redundancies have been announced today.

“I am pleased that the company has not taken the decision to close Browns Lane. Jaguar’s Headquarters and administrative centre will remain in Coventry, as will the company’s historic Wood Veneer Manufacturing Centre.

“I am encouraged that the world leading research and development centre at Whitley is being retained and welcome the employment opportunities for Browns Lane workers created by the growth and success at Aston Martin.

“We hope that Jaguar will be able to address its financial difficulties thereby securing a sustainable long-term future for the company, its products and its workforce here in the UK.”