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Jaguar Land Rover and Ford to axe thousands of jobs

11 January 2019
Jaguar Land Rover and Ford to axe thousands of jobs

The UK's biggest auto manufacturer Jaguar Land Rover announced on Thursday afternoon it is cutting 4,500 jobs, or about 10% of its workforce, in a bid to save money.

Other UK-based automakers have also been vocal about their Brexit concerns, including Toyota (TM) and Nissan (7201.T), which produce a combined 640,000 cars in the country each year.

The company, which employs almost 40,000 people in Britain and has been boosting its workforce at new plants in China and Slovakia in recent years, declined to comment when contacted by Reuters on Thursday.

"In light of the continuing headwinds impacting the vehicle industry, we are making some temporary adjustments to our production schedules at Castle Bromwich", the company said.

Ford signalled there would be "significant" cuts among its 50,000-strong European workforce under plans to make it more competitive and make its business more sustainable.

A downturn in Chinese sales, a fall in diesel sales and concerns about the competitiveness of the United Kingdom after Brexit are the reasons for the cuts, the BBC has 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, ' said chief executive Ralf Speth. "This is in addition to the 1,500 people who left the company during 2018", the company said in a statement.

Jaguar Land Rover, which is owned by Tata Motors and employs around 40,000 people in Britain, on Thursday reported a 4.6 per cent drop in full-year sales to just under 600,000 vehicles.

China is the company's biggest and profitable market, but sales have plummeted almost 50% there.

Jaguar Land Rover in China

Most commentators have concluded that the chance of a no-deal Brexit have increased with the governor of the Bank of England recently describing the probability as "uncomfortably high".

Apple and Jaguar Land Rover are not alone in their fight to adapt and survive in the current Chinese economy.

In July last year, the company said it needed more certainty around Brexit in order to continue investing in its United Kingdom operations and warned that a "no-deal" Brexit would cost the company more than £1.2bn in profit each year.

"The Government has and will continue to work closely with the business to ensure that it can succeed long into the future as it invests and transitions to autonomous, connected and electric vehicles".

If, as expected, the United Kingdom bears the brunt, or the entirety, of JLR's global cost-cutting, JLR may well say it tried to warn us.

China is the company's biggest and hitherto most profitable market. Production workers won't be affected, the automaker confirmed.

In China it has hired 4,000 workers since 2014.

JLR swung to a loss of 354-million pounds ($450 million) between April and September and had already in 2018 cut around 1,000 roles in Britain, shut its Solihull plant for two weeks and announced a three-day week at its Castle Bromwich site.