Jaguar Land Rover expected to announce big job cuts

Jaguar Land Rover workers assembling the Evoque in Halewood

Jaguar Land Rover says today's cuts are part of company's "Charge and Accelerate" plan, in which the Tata-owned auto maker hopes to realise £2.5 billion ($4.5 billion) in savings over 18 months.

JLR chief executive Ralf Speth said a tidal wave of "unprecedented" challenges to the upmarket vehicle maker meant it was slashing about a tenth of its workforce - the bulk of which are in the United Kingdom - to "protect the future" of the business.

Tata-owned JLR, based in central England, said it will cut 4,500 out of 42,500 jobs, while Ford said it will slash "thousands" of jobs as part of an overhaul that could result in plant closures and the discontinuation of some models.

JLR said demand in China, once one of its strongest countries, fell by 21.6 per cent in 2018, the biggest drop of any of its markets. But sales in China have fallen almost 50% in recent months as cautious Chinese consumers have been holding back on big ticket purchases amid global trade tensions.

JLR, which became Britain's biggest carmaker in 2016, had been on course to build around 1 million vehicles by the turn of the decade, reported a 4.6 percent drop in full-year sales to just under 600,000 vehicles.

"This is not about making the business today more efficient but completely redesigning it", Ford's European president Steve Armstrong told the FT.

Ford lost $245 million in Europe in the third quarter as sales slumped in Turkey and Russian Federation.

Jaguar Land Rover (JLR) is expected to announce plans to cut thousands of jobs as part of a £2.5bn plan to reverse losses.

Electric cars like the Jaguar i Pace aren't cheap to develop
Jaguar Land Rover workers assembling the Evoque in Halewood Electric cars like the Jaguar i Pace aren't cheap to develop

JLR's figures were also dented by the introduction of European emissions standards known as WLTP, which resulted in a fall in demand for diesel cars. It lost 354 million pounds between April and September 2018.

General Motors said in November it would lay off 14,000 factory and white-collar workers in North America and put five plants up for possible closure as it restructures to cut costs and focus more on autonomous and electric technology.

"In smaller vehicles the diesel decline is accelerating". Executives have expressed fears that a no-deal Brexit could cost it as much as £1.2 billion, while Donald Trump's long-mooted tariffs on European vehicle imports could set it back a further £1 billion, JLR having sold a record 114,000 cars in the U.S. a year ago.

He said the scale of the restructuring assumed that Britain would leave the European Union as scheduled on March 29 with a negotiated deal defining trading relations. "If Brexit went in the wrong direction we would have to have another look, to mitigate that", Armstrong said.

"Decisive action will help deliver resilient long-term growth as Jaguar Land Rover implements cost and profit improvements", said CEO Ralf Speth in a written statement.

Britain's business minister Greg Clark said a no-deal Brexit would be a disaster for the firm. "We have to know first what is going on".

"Rolls-Royce belongs to Britain", he said.