JLR Confirms Job Cuts After Diesel Slump

Paul Myles

TU-Editor

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10th January 2019

Jaguar Land Rover has finally confirmed that the slump in demand for diesel motors will cost the jobs of 4,500 people, mostly from its UK operation.

Following reports of the intended cost cutting at the end of last year, the Tata-owned carmaker will shed the jobs mainly in management and marketing personnel in a bid to meet intended savings of £2.9Bn ($3.7Bn).

One of the greatest strains on JLR’s bottom line has been the global slump in consumer demand for diesel powered vehicles which form around 90% of the carmaker’s product offering. Other problems include a 50% crash in its vehicle sales in China owing to the slow-down of the world’s second biggest economy plus concerns over potential logistics crisis should the UK leave the EU without a deal over free movement of goods and services.

JLR have, however, said it will be ramping up production of vehicles including the popular mid-market Discovery SUV model in the Slovakia claiming it will be hiring 3,000 workers for the Nitra plant. This leads some to speculate the move to trim back on its UK operation is also influenced by the desire to move production to countries offering far cheaper labor costs.

Diesel engine sales decline has also been cited in Ford’s plans to restructure its European car production operations in a bid to streamline the company.

The strategy calls for a refocus on the most profitable models in the Ford’s range and also the best markets for the products on the way to achieving a 6% trading margin from its European operation. Ford will be holding talks with union representatives concerned that the rationalization could see the loss of thousands of jobs throughout the continent.

“We are taking decisive action to transform the Ford business in Europe,” said Steven Armstrong, group vice-president and president, Europe, Middle East and Africa. “We will invest in the vehicles, services, segments and markets that best support a long-term sustainably profitable business, creating value for all our stakeholders and delivering emotive vehicles to our customers.”

— Paul Myles is a seasoned automotive journalist based in London. Follow him on Twitter @Paulmyles_