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Uncertainty stalls carmaker

JLR cut backs after demand flat-lines
Hajera Blagg, Tuesday, January 23rd, 2018

Britain’s largest carmaker Jaguar Land Rover announced today (January 23) that it would be temporarily cutting production of two of its models as it fights flat-lining demand in the UK amid Brexit and diesel uncertainty.


Production of the firm’s Discovery Sport and Range Rover Evoque models, which are built at JLR plant in Halewood employing 6,000 people will be scaled back later this year.


Although last year saw record global sales for JLR, in the UK and Europe demand was stagnant. The auto manufacturer said that falling consumer confidence and a tax on diesel were to blame for tough conditions in the UK market.


“Ongoing uncertainty surrounding Brexit is being felt by customers at home and in Europe,” the firm said in a statement today (January 23) . “Concern around the future of petrol and diesel engines – and general global economic and political uncertainty – and it’s clear to see why the industry is seeing an impact on car sales.


“Following a review of planned volumes, we are planning to make some temporary adjustments to the production schedule at Halewood in Q2.”


In the November budget, chancellor Phillip Hammond announced a tax hike on new diesel cars as part of the government’s plans to slash emissions.


But Unite has argued that the government’s approach to diesel has not been well thought through and could cause major damage to the UK’s auto industry.


Earlier this month Unite assistant general secretary Tony Burke slammed energy secretary Michael Gove’s 2040 deadline for banning new diesel and petrol vehicles – a plan he said would be impossible to achieve without a carefully planned strategy.


‘Botched announcements’

“Ministers’ botched and badly thought through announcements are causing major damage to the industry,” he said. “Combined with economic and Brexit uncertainty this risks taking the sheen off the jewel in the UK’s manufacturing crown and the 800,000 high skilled jobs it sustains.


“A just transition to electric without sacrificing hundreds of thousands of jobs can only be accomplished by having in place the proper infrastructure and an industrial strategy that includes retraining workers to have the skills needed for an electric future,” Burke added.


The higher excise duty on new diesel cars will be imposed from April of this year – and will hit JLR especially hard given 90 per cent of the firm’s UK sales are diesel.


Burke has also called on the government to get its house in order over Brexit and provide the certainty that UK automakers – including JLR today – has said that they desperately need.


“Car workers and manufacturing communities will be looking to the government to get the economy out of the slow lane in the year ahead and provide certainty over the UK’s future trading relationship with Europe in order to unlock stalling car manufacturer investment,” he said.


“A failure by ministers to do so will jeopardise the UK’s status as world leader in car manufacturing and undo the hard work of Britain’s car workers.”


Following figures earlier this year showing a slump in car sales in the UK across the board, just last week Vauxhall owner PSA Group announced it would be slashing 250 more jobs in addition to the 400 it announced it would cut last year.


In a bid to secure the future of the Vauxhall plant in Ellesmere Port, Unite general secretary Len McCluskey met with PSA chief executive Carlos Tavares yesterday (January 22) to press the case for more investment in one of Europe’s most efficient car plants.


“Carlos Tavares repeated his desire not to close UK plants, which is reassuring,” McCluskey said of the meeting.


“On behalf of Unite, I repeated our determination to safeguard the UK plants and if needs be our willingness to disrupt PSA’s UK market share if the company fails to support this loyal workforce.”


McCluskey said meetings with between him and Tavares would continue.


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