JLR and Ford
Jaguar Land Rover’s turnaround plan includes electrification tech as well as job cuts
Analysis after a tough week for both
Jaguar Land Rover (JLR) is ramping up its electrification plans, having announced new UK production for electric motors and batteries, in the wake of 4500 job losses confirmed last week.
Electric drive units will be built at its Wolverhampton powertrain factory from 2020, a move JLR hopes will help safeguard jobs at the plant as buyers move away from internal combustion engines.
There will also be a new battery assembly centre at Hams Hall. It’s described as one of the largest of its kind in the UK and will use new production techniques and technologies to produce battery packs and modules for future Jaguar and Land Rover models.
The focus on the production of electrified powertrains reinforces the firm’s announcement in 2017 that every JLR vehicle launched from 2020 will have an electrified variant. It already offers plug-in hybrid Range Rover and Range Rover Sport models, as well as the well-received electric Jaguar I-pace.
The plans were announced as part of JLR’S transformation programme, which is set to improve cashflow and save £2.5 billion over 18 months. It also includes 4500 job losses, which JLR promises will help long-term, profitable growth.
The job cuts account for around 10% of the Tata-owned company’s 43,000-strong staff across the country, which include workers in plants in Castle Bromwich, Solihull and Halewood.
They will come primarily through voluntary redundancy and early retirement packages. JLR CEO Ralf Speth said the cuts would be from “all locations” in the UK and would be focused on management and leadership roles.
While there are no plans for factory closures, Speth refused to comment on the longer-term future of its UK plants. He said: “We have to wait for politics. What will happen after 29 March?” – another reference to the potential effect of a hard Brexit on production efficiency. Speth has previously warned of the dramatic impact Brexit could have.
The move by the UK’S largest car manufacturer follows falling demand for its saloon models and diesel engines, along with a sharp fall in sales in China of 21.6% in 2018.
The firm has also released its full year’s sales figures for 2018, confirming an overall drop across both brands of 4.6% compared with 2017 (see table, above).
As well as the Chinese slump, JLR – and, to an extent, the broader car market – has been affected by other factors, including Brexit, US trade tariffs, negativity around diesel and new WLTP regulations.
Speth said: “We are taking decisive action to help deliver long-term growth in the face of multiple geopolitical and regulatory disruptions as well as technology challenges facing the automotive industry.”