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UK car industry suffers double blow
From:ChinaDaily   |  2019-01-15 20:09

Britain's auto industry has been dealt duel blows after major car-makers Jaguar Land Rover and Ford both confirmed thousands of job cuts at their plants in the United Kingdom.

Jaguar Land Rover, which is also called JLR, is to axe 4,500 employees in Europe, the majority of which will come from the firm's UK workforce of 40,000.

The job cuts form part of a larger plan to reduce costs, following a weak 2018 for JLR when overall sales were down 4.6 percent on the previous year.

The company cited several reasons for the slump, including uncertainty surrounding the UK's exit from the European Union, weak demand for diesel engines, and a major slump in Chinese car sales.

"The economic slowdown in China along with ongoing trade tensions is continuing to influence consumer confidence," said Jaguar Land Rover chief commercial officer Felix Brautigam.

Passenger vehicle sales in China were down 4.1 percent last year when overall vehicle sales fell 2.8 percent, according to China's Association of Automobile Manufacturers, representing the first annual sales drop since 1990.

Brautigam said that Jaguar Land Rover is working with retailers in China to respond to the present market conditions.

United States car maker Ford briefed UK unions on Friday on its plans to cut 1,150 jobs from its workforce of 13,000 in the UK over a two-year period. Around 1,000 of those cuts are likely to come from its plant in Bridgend, which currently employs 1,700 people.

Des Quinn, national officer for automotive industries at British union Unite, called the news a "devastating blow".

"Unite is fully committed to opposing any compulsory redundancies and campaigning strongly for Bridgend to have a viable future," said Quinn. "There are a number of factors behind this grim news – the main ones being challenging market conditions for carmakers generally, a lack of a coherent industrial strategy from the UK government and the uncertainty created by Brexit."

Steven Armstrong, the head of Ford in Europe, said the job losses were not a result of Brexit, but rather formed part of an overall strategy to reduce "surplus labor" and to "address parts of the business that are not profitable".

However, he said that Brexit could impact the company if Britain leaves the European Union without a deal in place. In this scenario, plant closures could not be ruled out, Armstrong said.

"If Brexit goes in the wrong direction and we have a hard Brexit, we would need to look again about what we could do to mitigate the impact of that," he added.

On Monday, Japanese carmaker Honda confirmed that it will halt production at its plant in Swindon for six days immediately after the UK leaves the EU on March 29 to reduce any disruption caused by border delays.

JLR chief executive Ralf Speth has been outspoken about his concerns over Brexit, saying that no-deal could lead to thousands of job losses across the industry.

On Monday, former UK Foreign Secretary Boris Johnson, who spearheaded the campaign to leave the EU, downplayed the impact of Brexit on the UK's car industry.

"If you look at the reasons for the redundancies at JLR, as the management themselves pointed out, it's overwhelmingly to do with the diesel crisis and the climb in markets in China," Johnson told London radio program LBC.

In a report released last month, Toronto-based investment firm RBC Capital Markets predicted that the global car industry is heading for its first recession since the 2009 financial crisis.

The study found that light-vehicle output declined by 2.9 percent in the third quarter of 2018 and forecast a 4 percent drop in the fourth quarter. RBC predicts that output will fall by a further 0.4 percent this year.

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