Jaguar Land Rover and Ford are preparing to implement cost cutting plans which will result in thousands of job losses for the UK’s automotive sector.
JLR is expected to confirm earlier reports that it plans to cut “up to 5,000 jobs” in the UK later today, while Ford has announced its own plans to cut "thousands" of jobs from its workforce across the region.
Management, marketing and administrative roles are expected to be the main target of JLR’s jobs cuts, which will attempt to deliver £2.5bn of cost-cutting measures amid a downturn in Chinese sales, the decline in diesel sales and concerns surrounding Brexit.
The FT reported that Ford’s job losses will come as it bids to cut $14bn globally.
The brand said that every part of the company’s European business will come under review as part of a switch in strategy for the blue oval as part of a process which would also see it "improve or exit less profitable vehicle lines".
“This is not about making the business today more efficient but completely redesigning it,” Ford’s European president Steve Armstrong told the FT.
Armstrong said that there “will be thousands” of job losses at Ford, which currently employs 53,000 people in Europe, including its two UK engine plants at Bridgend and Dagenham.
Ford is currently in talks with Volkswagen Group over a potential alliance, which could boost its strategic cost-cutting and boost its efforts to deliver an alternatively-fulled vehicle (AFV) drivetrain for each of its car models.
Speaking to Reuters this week, Ford’s president of global markets, Jim Farley, said he had no news to share with reporters about the status of talks with VW, but said that they are “progressing well.”
AM reported last monmth on reports that JLR would cut up to 5,000 jobs from its work force.
At the timer, the brand referred to the reports as “speculation”.
But back in April the manufacturer announced plans to cut 1,000 manufacturing contractor jobs amid falling demand amid anti-diesel sentiment and the pressures of Brexit.
And in October, N Chandrasekaran, chairman of JLR's parent company Tata Motors, announced a turnaround programme at JLR "to drive £2.5bn of profit, cost, and cash flow improvements over the next 18 months".
He said: "In JLR, market conditions, particularly in China, have deteriorated further. To weather this volatile external scenario, we have launched a comprehensive turnaround plan to significantly improve our free cash flows and profitability."
Sales of cars in China dropped by 6%, to 22.7 million, during 2018, according to the China Passenger Car Association (CPCA) in the market’s first decline for two decades.
The decline is part of a picture which led to JLR’s recent posting of a £354m half-year loss.
JLR currently employs 40,000 people in the UK, mostly in the West Midlands.