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Jaguar to close Midlands plant - baby Range Rover gets go-ahead
publication date: Sep 25, 2009
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author/source: Robin Roberts
Jaguar Land Rover is overhauling its model ranges and rationalising production.
Yesterday, it confirmed a new business plan designed to increase
its global competitiveness significantly, drive growth and sustained
profitability, and respond to the challenges of climate change.
One Midlands plant will close within six years but there are no
anticipated forced redundancies, and the company has yet to decide if
it will be Castle Bromwich or Solihull. Halewood will build the new
small Land Rover and create 800 jobs.
Unions have said they will fight the closure plans and ballot for strike action.
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.
Jaguar Land Rover Chief Executive Officer, David Smith said in a
statement, "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 car industry has been through an unprecedented recession. New car
sales, including those of Jaguar and Land Rover, are down globally by
25-30 percent. This has resulted in manufacturing capacity utilisation
of less than 60 percent at Jaguar Land Rover, which combined with the
credit crunch, has exposed fundamental weaknesses in the structure of
the business.
The company has already responded with aggressive actions over the past year.
Production was reduced by more than 100,000 units; spending and costs
were cut; employment reduced by 2500; and pay frozen and bonuses
cancelled. But 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, he added.
"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 new plan identifies global competitive benchmarks. These recognise
that Jaguar Land Rover has to match if not beat the levels of cost and
efficiency achieved by competitors that manufacture in multiple
locations around the world."
The new strategy addresses both medium and long-term plans, but has an
acute focus on the next year. Actions across the business fall into two
main categories:
Both brands' portfolios will expand through a series of exciting new
segment entries that build on Jaguar and Land Rover's design,
performance and technology excellence. In addition, a new generation of
lightweight sedans, sports cars and premium SUVs, with hybrids and
electrification technology will significantly reduce fuel consumption
and CO2. Some £800 million has been dedicated to environmental
innovation, which will in part be supported by European Investment Bank
funds. Finally, there will be additional derivatives and powertrain
variants from core model lines.
The new plan includes a production version of the LRX Concept which
will be the smallest, most fuel-efficient Range Rover ever. It will be
built in the world-class, multi-award winning Halewood plant in
Liverpool, subject to quality and productivity agreements.
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, the statement concluded.
A JLR spokeswoman said the plan would not affect current engine
contracts at Bridgend but declined to say what would happen when these
came to an end. It is usual in business for suppliers to bid for new
contracts and BEP will be in this position. |  | | Land Rover confirmed the production version of its exciting LRX concept car (left) will be built.
Designed and engineered at Land Rover's state of the art Gaydon facility, the new Range Rover will be the smallest, lightest and most efficient vehicle the company has ever produced and will debut next year and join the Range Rover line-up in 2011.
The new car will be built in Halewood, on Merseyside, subject to quality and productivity agreements and will be sold in over 100 countries around the world. | Phil Popham, managing director of Land Rover said, “The
production of a small Range Rover model is excellent news for our
employees, dealers and customers.
"It is a demonstration of our commitment to investing for
the future, to continue to deliver relevant vehicles for our customers,
with the outstanding breadth of capability for which we are
world-renowned.
"Feedback from our customer research also fully supports
our belief that a production version of the LRX Concept would further
raise the desirability of our brand and absolutely meet their
expectations." Phil added.Gerry McGovern, Land Rover design director said: "The
new vehicle will be a natural extension to the Range Rover line-up,
complementing the existing models and helping to define a new segment.
It will be true to the concept and have many recognisable Range Rover
design cues including the signature clamshell bonnet, the floating roof
and the solid 'wheel-at-each-corner' stance."
More details of the new small Range Rover will be released next year.
Land Rover is working on a hybrid powertrain for the vehicle which will
be fully compatible with the brand’s off-road abilities and history,
unlike some current hybrid soft-roaders which cannot be used off-road. | | | | |
Business Secretary Lord Mandelson said in a statement,
"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.
"I welcome the
commitment that Tata is showing in the highly-skilled workforce
employed by JLR in the West Midlands and Merseyside as well as the
top-class models it produces.
Confirmation that the LRX is to be
built at Halewood will help to end the uncertainty at the plant with
the added prospect of some new jobs in the pipeline. It's a testament
to the workforce who have made the plant one of the most productive in
Europe. The Government has shown its support for this project with
investment of £27 million announced earlier this year.
"JLR's new
plan also outlines its continued support for the development of ultra
low carbon technologies and product design to position the models more
competitively in the global market place. The government will continue
to do everything it can to help businesses fully exploit the
opportunities that green manufacturing has to offer.
"I know that
trading conditions are difficult for the car industry as a whole. It is
inevitable that we will see further re-structuring across the industry.
There is global over-capacity and car manufacturers recognise that they
have to take some of this capacity out and cut back on their costs.
There are opportunities and that's why we must continue to innovate and
lead the way. I welcome the fact that JLR has already implemented a
number of proposals to improve its long-term prospects."
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