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  1. ITV Report

4,500 jobs to be cut at Jaguar Land Rover after retail sales drop in 2018

  • Video report by ITV News Business and Economics Editor Joel Hills

Car giant Jaguar Land Rover has announced 4,500 global job losses after retail sales dropped in 2018.

The majority of these cuts will be made in the UK with voluntary redundancies being offered.

It is believed they will be mainly in management, marketing and administrative roles.

The losses are in addition to the 1,500 job cuts announced last year.

The news comes on the same day Ford signalled "significant" cuts among its 50,000-strong European workforce under plans to make it more competitive and make its business more sustainable.

While Japanese firm Honda has 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.

  • ITV News Midlands Reporter Ben Chapman talks to the people who will be affected by the shock waves of JLR's downturn

The luxury car-maker employs 44,000 workers in the UK at 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.

JLR ended the year with retail sales totalling 592,708 vehicles, down 4.6% compared to 2017’s record year.

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.

JLR chief executive Ralf Speth has warned that a no deal Brexit could lead to further job losses and uncertainty.

He told ITV News Economics Editor Joel Hills problems in purchasing parts could lead to a struggle in "keeping the company alive."

"I have order parts now for the production in April - so should I order the parts or not?"

In the event of a no-deal Brexit, Mr Speth said that the company could stockpile for "only days" before production comes to a halt.

  • Watch the full interview with JLR boss Ralf Speth

In China, demand was adversely impacted by consumer uncertainty following import duty changes and escalating trade tensions with the US.

Jiang Tongbing, a JLR sales manager in Beijing told ITV News that sales in China dropped by “25% to 30% compared with that in the first half” of 2018.”

“It was partially caused by the economic slowdown in China, furthermore, the UK base of Land Rover did not have a clear judgement to China’s market absorption capacity, they were fully unprepared for this situation.”

Jiang Tongbing, a JLR sales manager in Beijing said the UK base was Credit: ITV News

Chris Gibson runs a company in Birmingham that supplies parts to JLR and it makes up 30% of his business.

He remains optimistic job losses will not lead to a cut in production targets.

"Continuing uncertainty related to Brexit" has been blamed as another contributing factor.

The introduction of European emissions standards known as WLTP, also resulted in a fall in demand for diesel cars.

At the time boss Ralf Speth said: "In the latest quarterly period, we continued to see more challenging market conditions.

"Our results were undermined by slowing demand in China, along with continued uncertainty in Europe over diesel, Brexit and the WLTP changeover."

The firm cut 1,000 temporary contract workers at its plant in Solihull in 2017.

Thursday's announcement is expected to include details of sales for 2018, the business outlook for this year, an update on cost savings and planned investment in UK plants.

592,708
vehicles sold by Jaguar Land Rover in 2018. (Jaguar Land Rover)
-4.6%
from 2017 sales. (Jaguar Land Rover)

Unite national officer Des Quinn said: "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 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."

Business Secretary Greg Clark said the Government will work with JLR to help it remain successful. Credit: PA

Meanwhile Rolls-Royce Motor Cars chief executive Torsten Muller-Otvos has pledged that the carmaker will remain in Britain post-Brexit.

The commitment came as the company unveiled record sales figures, up 22% in 2018 on the previous year.

On Thursday, 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.

While on its plans for six non-production days in April, 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."