Mixed fortunes for car giants as 2,000 jobs go

CAR maker Aston Martin and dealership Lookers sped in opposite directions as they announced a total of 2,000 job cuts.

The James Bond car maker’s shares tumbled as it said it was cutting 500 jobs.

The firm said the changes were part of a major overhaul that will cost £12m but save £28m per year.

It said fewer workers were needed due to ‘ lower than originally planned production volumes and improved productivity across the business’.

The changes come after Aston pledged a ‘fundamental reset’ following its £540m bailout in January by investors, including Canadian billionaire Lawrence Stroll.

Former chief Andy Palmer was also ejected last month and is due to be replaced by Tobias Moers, the boss of high-performance Mercedes division AMG, in August.

Shares in Aston dipped 3.2pc, or 2.2p, to 66.65p after the announcement. The firm said the order book for the DBX model – its first SUV – remained ‘strong’.

But there was further bleak news in store for Britain’s car industry as dealerships and servicing chain Lookers revealed it was taking the axe to jobs as well, with 1,500 roles set to go.

The company will also close 12 showrooms – on top of 15 already closing under plans announced in November – that will slash costs by about £50m per year.

In a trading update, Lookers said the belt-tightening was necessary because of a difficult car market - made worse by the virus lockdown. Figures from the Society of Motor Manufacturers and Traders (SMMT) have shown a drop of almost 90pc in new car sales last month – the worst May performance since 1952. On top of these troubles, Lookers is grappling with the fallout of a suspected internal fraud and has hired auditor Grant Thornton to investigate.

However, the company’s shares rose 15.8pc, or 3.7p, to 27p after it revealed it had now reopened most of its dealerships and vehicle servicing centres following their temporary shutdown during the pandemic.

Boss Mark Raban said: ‘ We have used the time the business has been closed to adapt and evolve to meet changes in consumer behaviour, not just for a post- Covid environment, but also to enhance our digital offering and the trend towards electrification. There is still a lot more work to do, but we have the determination, platform and brand partnerships to take the business forward.’

The FTSE 100, meanwhile, dipped into negative territory. Britain’s blue chip index fell 0.6pc, or 40.97 points to 6341.44.

The FTSE 250 index of mediumsized companies lost 0.4pc, or 71.12 points to settle at 17,825.96. Amid the gloom, however, was some cheer for savers.

South West Water owner Pennon bucked recent trends seen during the virus crisis, saying it would hike its dividend from 41.06p to 43.77p per share for the 2019-20 financial year.

It means the payout will be worth about £184.3m to investors. That is despite profits at the group slipping from £201.4m to £ 193.1m. Revenue rose from £632.6m to £636.7m.

Shares, however, fell 5pc, or 59p, to 1134p.

Shopping centre landlords collectively tumbled before they reopen sites on June 15 that have been shut during the lockdown.

Hammerson, which owns Birmingham’s Bullring and Bicester Village, was down 13.7pc, or 18.8p, to 118.95p, while NewRiver REIT fell 13.2pc, or 10.4p, to 68.6p.

Capital & Regional, too, dropped 4.8pc, or 5.95p to 118p and Town

Centre Securities fell 10.3pc, or 12p, to 105p. Intu was down 9.6pc, or 0.94p, to finish at 8.95p.