Jaguar Land Rover to close UK factory

British car giant Jaguar Land Rover is to close one of its UK plants in changes outlined to workers today.

British car giant Jaguar Land Rover is to close one of its UK plants in changes outlined to workers today.

The firm said it will decide next year whether to close its factory at Castle Bromwich in the West Midlands, which makes Jaguars, or its site at Solihull, which makes Range Rovers.

The company said there will be no compulsory redundancies involved in the closure, adding that up to 800 new jobs are to be created at Halewood on Merseyside because of a decision to build a new Range Rover.

The firm gave details of a new business plan it said was designed to increase its global competitiveness significantly, drive growth and sustained profitability, and respond to the challenges of climate change.

"The plan includes decisive actions to see through the next 12-18 months as markets recover and positions the company to grow and prosper in the future. It includes a new and expanded range of products and environmental technology, delivered through streamlined and competitive costs and a new manufacturing strategy," said a statement.

Chief executive David Smith said: "This is a plan that recognises the impact the economic collapse has had on our business, and at the same time the opportunities that lie ahead for these two great brands.

"We are confident that a new, more efficient and competitive structure combined with future investment will unlock the true potential of this business."

The company has already responded to the downturn over the past year by cutting production by 100,000, axing 2,500 jobs, freezing pay and cancelling bonuses.

"This was not enough to offset the full magnitude of the downturn and the company swung from profit in 2007 to significant losses over the past 12 months.

"This was not a sustainable situation. Actions taken have started to reverse the trend, quarter over quarter, and we now have to take the company to the next level of competitiveness."

The firm said it had to match, if not beat, the levels of cost and efficiency achieved by its competitors so it aimed to produce improved products and boost their environmental performance.

"As the company reduces engineering complexity for its new product range, West Midlands manufacturing will transfer from two plants to one by the middle of the next decade, improving efficiency and cost.

"Further cost reductions include pension restructuring, lower employment costs for new hires and a focus on IT and business simplification. Volume growth, especially in emerging markets, combined with low-cost country sourcing will also reduce variable cost.

"The entire package of measures does not envisage any compulsory redundancies.

"This plan of action will restructure the company and deliver positive cash and profits that are essential to re-invest in the business and secure its future," said the statement.

The firm said it would build a new generation of lightweight vehicles, with hybrids and electrification technology which it said will "significantly" reduce fuel consumption and CO2 emissions.

British Business Secretary Lord Mandelson said: "Today's announcement of Jaguar Land Rover's business plan shows how focused it is on the future of the industry and the opportunities available as we move to a low carbon future."

Dave Osborne, national officer of the Unite union, said: "Earlier this year, this company and our union agreed a framework agreement intended to support JLR through this tough economic period. Our members said then that JLR could not be trusted to uphold that agreement. Today, this has proved to be true.

"While Unite welcomes moves to green the JLR product range, we are deeply concerned that an agreement struck with the union barely six months ago will not now be upheld and that the company is seeking to close the final salary pension scheme.

"In April our members agreed to changes to terms and conditions of their employment in order to give the company financial security, but like Oliver Twist they are coming back for more. It appears that the company is making our members pay for their failure to secure Government funding.

"We recognise the difficult trading environment for JLR, which is why Unite and its members have done more to help JLR during this recession than we have any other company. But while the company may say that the business cannot sustain further liabilities, the truth is by far the biggest liability is the company's leadership team.

"Some of the problems the company faces today exist as a result of past management failures. These failures were at the hands of the same team who today want our members to lose their pensions.

"Unite's members will not be paying for management's incompetence and we will not stand by while those responsible continue to wreak havoc on this business."

Unions will be meeting as soon as possible to consider the Jaguar proposals in more detail.

More in this section

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day.

Lunchtime
News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up