Jaguar Land Rover facing "perfect storm"

PA Wire  PA Images

JLR, Britain's biggest carmaker, said it will lose 4,500 jobs from its global workforce, the majority of them management roles in the United Kingdom at sites including Coventry and Gaydon.

The issues at JLR have arisen as Ford is also looking to cut back on its workforce numbers in Europe.

Thursday's move is part of a £2.5 billion ($3.2 billion) push announced past year to reduce costs and boost cash flow through 2020.

There were reports previous year that thousands of jobs could be axed as part of a £2.5 billion savings plan amid falling sales in China and a drop in demand for diesel cars, but the figure was not confirmed.

JLR said demand in China, once one of its strongest countries, fell by 21.6 per cent in 2018, the biggest drop of any of its markets.

Later this year, the company would start producing the next generation electric drive units (EDU) at its engine manufacturing centre in Wolverhampton.

Wolverhampton South East Labour MP Pat McFadden said the redundancy plans were "very troubling", while JLR chief executive Ralf Speth said the firm was "taking decisive action to help deliver long-term growth".

The firm, owned by Indian conglomerate Tata, booked a £90m pre-tax loss in the three months to September 30, which compared with a £385m profit in the same period in 2017.

But sales in China have fallen almost 50% in recent months as cautious Chinese consumers have been holding back on big ticket purchases amid global trade tensions.

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Brexit has made the future of the UK's vehicle manufacturing industry uncertain, with Toyota and Vauxhall among those to warn of negative impacts in the event of a hard Brexit.

The company said in July past year that it needed more certainty around Brexit in order to continue investing in its United Kingdom operation.

Last March, Mr Western hosted a Parliamentary debate on the future of the automotive industry - raising falling diesel sales, falling consumer confidence and Brexit concerns.

"One of the disadvantages of membership of the European Union is that it uses our money to move our jobs from the United Kingdom to other European Union countries". JRL said they come as demand for diesel-powered vehicles continues to fall.

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 United Kingdom plants.

Meanwhile, Jaguar has been adding to its workforce elsewhere in the world.

It is also moving production of the Land Rover Discovery to Slovakia with plans to hire up to 3,000 workers.

"Given the difficulties that they're going through.to add further costs and further disruption from a no-deal Brexit, it's clear why they've been so clear that this would be against their interests", said business minister Greg Clark.

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 United Kingdom leaves the EU. In China it has increased its workforce by 4,000 since 2014.

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