Jaguar Land Rover to close UK plant

Link to the article: Channel 4 News

By Channel 4 News

Jaguar Land Rover is closing one of its three British factories, but says there will be no compulsory redundancies.

Jaguar Land Rover has announced that it intended to close one of its factories in the West Midlands.

Either Castle Bromwich or Solihull will be closed with a final decision to be made next year.

Around 7,000 people are employed across both the sites. But Jaguar, who is owned by the Indian firm Tata, insists there will be no compulsory redundancies.

The company also said it will create 800 new jobs at its factory on Merseyside.

Jaguar Land Rover 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.

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."

Jaguar Land Rover employs more than 14,000 people, including 2,000 at its Halewood plant near Liverpool, 5,500 at Solihull and approximately 2,200 people at Castle Bromwich.

The Castle Bromwich site thought to be most at risk, though a union agreement promises no compulsory redundancies.

The future for the company will be fuel-efficient cars. The LRX, the smallest, most fuel-efficient Range Rover ever, is to be built in Halewood, with the creation of 800 new jobs. And Jaguar will launch new, lightweight sport cars, with electric or hybrid engines.

Jaguar Land Rover has been losing money since the Indian company Tata bought it from Ford last year. Demand for its luxury cars and four-wheel drive vehicles has been hit by high fuel prices and the recession. From April to June the company lost £62m.

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.

Tata had asked the government for a bailout, but when the terms offered were too harsh, it managed to raise cash from private sources.

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.

"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."