Jaguar Land Rover struggles to recover from Covid-19 – 3,000 workers furloughed, big production cutbacks

Jaguar Land Rover (JLR) is having a tough time recovering from the damaging effects of the coronavirus pandemic. Just now, it had to furlough 3,000 workers, compared to other UK carmaker which furloughed less than 80 employees. One of JLR’s key production facilities is also running at a fraction of its capacity, The Guardian reports.

Thanks to the UK government’s job support scheme, which will pay up to 22% of employees’ salaries on reduced hours, some workers are expected to return. JLR could receive £20 million (RM108 million) in government aid in February if it manages to keep all 20,000 workers who were furloughed. However, the carmaker’s continued reliance on furlough subsidies adds to concerns about its financial health.

While other UK factories have returned to dual shift, pre-pandemic levels of production, JLR is planning to use a fraction of its Castle Bromwich plant, casting further doubts on employee security and future jobs. The Tata-owned carmaker plans to produce only around 11,000 cars up till March 2021, including 4,000 units of the F-Type, 3,500 units of the XE, and 3,500 units of the XF.

Meanwhile, sales of the XE have disappointed, leading to its discontinuation in the US market. The report states that JLR will make no more than 300 units of the XE a month for the rest of 2020, but this figure is said to be ramped up once the latest model gets introduced. According to MarkLines, an industry data provider, the Castle Bromwich plant produced 35,000 cars in 2019, and in 2013 it made 80,000 cars.

New company CEO Thierry Bolloré is currently reviewing all of JLR’s investment plans, including a £1 billion (RM5.4 billion) investment to upgrade Castle Bromwich for production of the new electric XJ. The automaker also faces tough fleet emissions cuts (or risk getting fined by the EU), as well as the possibility of no-deal Brexit, which could see expensive tariffs on cars and parts imposed virtually overnight. If that happens, JLR might have to relocate production to Nitra, Slovakia.

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