Jaguar Land Rover is Britain’s biggest car-maker, by volume, by value, by far.
In recent years, for those who are so inclined, the company’s success has been something for Britain to boast about.
JLR is Indian owned and German run but its cars are (almost entirely) designed and made in here in Blightly, for now at least.
But an era of extraordinary growth has come to an end and today JLR has announced plans to shed one tenth of its workforce.
The redundancy programme is voluntary and global but most of the 4,500 roles that disappear will be lost in the UK. The jobs cuts follow 1,500 announced in 2018.
By the end of the year the number of people employed by JLR in the UK will have fallen to 38,000.
- Joel Hills explains it is not just Jaguar Land Rover that are in difficulties
This has been coming for some time. Sales in China, one of its biggest markets, where the profit margins are plumpest, have collapsed, as have diesel sales more generally. 80% of the cars that JLR produces have diesel engines, the company suddenly finds itself out of step with the times and particularly exposed.
But not uniquely exposed. Ford has announced “thousands” of jobs will go across its European operations as it tries to revive a business which has been loss-making for the last two years. The company is moving towards electric powered cars.
This is not a nip and tuck, the European operations which employ 53,000 people and has 15 factories is to be “completely redesigned”. The review is radical in scope and nothing is off the table. The ongoing viability of established models such as the Fiesta and the Focus is under review.
Whatever happens next will inevitably impact the 3,500 people who work at Ford’s factories at Bridgend and Dagenham. The petrol and diesel engines they make end up in more-or-less every type of European Ford car.
In the past JLR has blamed the government for the slump in diesel sales and with some justification. The tax system has been tweaked to discourage buyers. The VW emissions scandal also appears to have also shaken consumer belief that diesel is a sensible investment.
JLR is investing is alternative fuel technology. Today it is trumpeting plans for electric drive production at Wolverhampton and battery assembly in Birmingham - all well and sensible but the company is late to a party that’s in full swing. In 2018, JLR launched its first electric powered vehicle while BMW’s i3 has been on sale for four years.
The unions accept the need for tough, necessary decisions but worry privately that JLR will increasingly invest overseas in future. The company already has factories in China, Brazil, India and Slovakia (which will build the Land Rover Discovery).
JLR has already and repeatedly warned that Brexit could make Britain a much less attractive place to build cars.
In July Ralf Speth, JLR’s chief executive, wanted that “tens of thousands” of jobs would be lost in the car industry in the event of disorderly Brexit in March.
“Bluntly, we will not be able to build cars” he said in a speech in July. Speth claimed that a Hard Brexit would sever the company’s supply chain which stretches across the EU, costing it £1.2 billion a year and wiping out its profits.
The clear majority of MPs in parliament seem opposed to No Deal but it remains a possibility. If it happens, there will be more redundancies to come at JLR.
The company’s vehicles are engineered to adapt to the most hostile environments on earth but drive a Range Rover off a cliff-edge and you’ll wreck it.