Tata Motor's UK acquisition Jaguar Land Rover (JLR) yesterday said it was cutting 200 jobs across the UK. However, the company said it would seek voluntary retirement from its 16,000-strong workforce.
The economic slowdown and drying up of credit has forced global automakers to cut their production as inventories pile up. In the UK, Jaguar is joining rival luxury auto maker Vauxhall in halting production for 18 days following a sales slump.
Earlier in August, Land Rover had cut production and brought in a four-day week at its Solihull plant. Toyota, Land Rover and Bentley have also cut production in view of the slump in demand with August sales being the slowest in the UK since the last 40 years.
Last month JLR said its production at Jaguar's Halewood plant in northern England would stop for a week starting 27 October because of falling demand for the Jaguar X-Type and Land Rover Freelander models built there (See: Jaguar to cut production as buyers face liquidity crunch)
However, JLR said that the company's quest for voluntary redundancies was not in response to the economic downturn but to improve efficiencies. Describing it as a "small programme" a company spokesperson told the Liverpool Daily Post that the company expected people would use the programme as an opportunity to take early retirement, ruling out a further shutdowns at Halewood.
JLR had posted a £372 million operating profit in the first half of the year, following a £351 million operating profit in 2007, but reported an overall loss of £207 million after tax due to what the company described as accounting adjustments.Jaguar under its previious owner, Ford Motors, had failed to make profits for years.
After its acquisition by Tata Motors, JLR revealed its figures seperately, unlike in the past when it was clubbed with Ford's Premier Automotive Group division which also included Volvo.
Tata Motors has warned that the general economic conditions would be tough for JLR as its strategy of boosting car sales in Asian markets may not offset the overall slump.
The luxury British brands have, however, shown improved profitability, and new launches are expected.
It has issued a prospectus for a new share issue it hopes will raise £487 million to part finance the costs of its acquisition of JLR (See: Tata Motors to raise Rs9,770 crore to fund Jaguar-Land Rover acquisition)