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Jaguar to axe 1,150 jobs
By Michael Smith
COVENTRY (Reuters) - Hard-pressed luxury marque Jaguar says it will cut about 1,150 jobs at its main plant in Coventry in a bid to return to profits, in another blow to Britain's fading glory as a carmaking centre.
The Ford Motor brand known for its leaping big cat mascot will drastically scale back the Brown's Lane plant and shift production of its XJ sedan and XK sports car to its Castle Bromwich factory.
Jaguar is also bowing out of Formula 1 racing at the end of the season, dropping an expensive and unrewarding hobby.
"Our business as it currently stands is unsustainable and our losses unsupportable," said Joe Greenwell, chairman and chief executive of Jaguar and sister company Land Rover, on Friday. He estimated the cuts would save $120 million (67 million pounds) a year.
Ford, which bought Jaguar in late 1989 for 1.6 billion pounds, raised its third-quarter and 2004 profit forecasts, citing financial services strength and a tighter grip on the costs of making cars.
Despite sales growth and high quality levels, Jaguar has not been able to keep pace with larger rivals in the premium car sector, which now faces the kind of margin-sapping selling incentives that have bedevilled volume carmakers.
The popularity of sport utility vehicles and sterling's strength against the dollar also piled pressure on Jaguar.
"Jaguar simply cannot support three assembly plants with annual sales of 125,000 cars," said Mark Fields, the head of Ford's Premium Automotive Group (PAG) of luxury brands.
Jaguar will keep 310 jobs to make wood finishings at Brown's Lane, move 425 staff to Castle Bromwich, and add 300 new manufacturing jobs at the Ford group's Aston Martin sports car plant in Gaydon, also in central England.
Unions vowed to fight the restructuring plans, saying they would have a "devastating effect" on the regional economy.
"We are not prepared to see British workers to be treated as cannon fodder to satisfy American shareholders," Tony Woodley, General Secretary of the T&G union, said. "We will be consulting our members and giving them leadership to fight for their plants and jobs. It is also likely that we will be consulting with our members across Ford in the UK."
Prior to Friday, Jaguar employed 6,700 people in Britain.
GLOOM AND DEPRESSION
Jaguar insisted that Coventry -- its home since 1928 -- remained its headquarters, but the moves to shore up profits made Brown's Lane a shadow of its proud past.
"The mood is pretty depressed here. It has gone from boom town to gloom town," said Coventry man Alan Morris, 60, a sheet metal worker made redundant who now runs a coffee stall in the city centre.
To help cushion the blow, Jaguar said it would develop three new products: a new all-aluminium XK sports car, a premium diesel version of the XJ sedan, and a high-performance X-type diesel. It will make a long-wheelbase version of the XJ and a X-type estate for the U.S. market.
Born in 1922 as the Swallow Sidecar Co. in Blackpool with a 1,000 pound bank overdraft, Jaguar has made its sleek and distinctive cars since 1935. It sold 120,570 cars last year.
But the dollar's weakness hurt business in North America, which accounted for nearly half of Jaguar's sales in 2003.
Ford, which cut a deal with unions this month to save its British sport-utility vehicle maker Land Rover, said last month it would reduce Jaguar's planned 2004 output by about 15,000 units to help clear inventories. The largest union at Jaguar said then it had been assured no jobs would go.
The division's disappointing performance is weighing heavily on overall results at PAG, which also comprises Land Rover, Volvo and Aston Martin.
Ford's luxury car business is key to its goal of booking $7 billion in annual pretax profits by 2006.
Premier Automotive and Ford's Lincoln brand are supposed to account for a third of that profit. But PAG sank to a pretax loss of $362 million in the second quarter from a profit of $166 million a year earlier, hit by the strong euro, model changeovers and higher operating costs.
By Michael Smith
COVENTRY (Reuters) - Hard-pressed luxury marque Jaguar says it will cut about 1,150 jobs at its main plant in Coventry in a bid to return to profits, in another blow to Britain's fading glory as a carmaking centre.
The Ford Motor brand known for its leaping big cat mascot will drastically scale back the Brown's Lane plant and shift production of its XJ sedan and XK sports car to its Castle Bromwich factory.
Jaguar is also bowing out of Formula 1 racing at the end of the season, dropping an expensive and unrewarding hobby.
"Our business as it currently stands is unsustainable and our losses unsupportable," said Joe Greenwell, chairman and chief executive of Jaguar and sister company Land Rover, on Friday. He estimated the cuts would save $120 million (67 million pounds) a year.
Ford, which bought Jaguar in late 1989 for 1.6 billion pounds, raised its third-quarter and 2004 profit forecasts, citing financial services strength and a tighter grip on the costs of making cars.
Despite sales growth and high quality levels, Jaguar has not been able to keep pace with larger rivals in the premium car sector, which now faces the kind of margin-sapping selling incentives that have bedevilled volume carmakers.
The popularity of sport utility vehicles and sterling's strength against the dollar also piled pressure on Jaguar.
"Jaguar simply cannot support three assembly plants with annual sales of 125,000 cars," said Mark Fields, the head of Ford's Premium Automotive Group (PAG) of luxury brands.
Jaguar will keep 310 jobs to make wood finishings at Brown's Lane, move 425 staff to Castle Bromwich, and add 300 new manufacturing jobs at the Ford group's Aston Martin sports car plant in Gaydon, also in central England.
Unions vowed to fight the restructuring plans, saying they would have a "devastating effect" on the regional economy.
"We are not prepared to see British workers to be treated as cannon fodder to satisfy American shareholders," Tony Woodley, General Secretary of the T&G union, said. "We will be consulting our members and giving them leadership to fight for their plants and jobs. It is also likely that we will be consulting with our members across Ford in the UK."
Prior to Friday, Jaguar employed 6,700 people in Britain.
GLOOM AND DEPRESSION
Jaguar insisted that Coventry -- its home since 1928 -- remained its headquarters, but the moves to shore up profits made Brown's Lane a shadow of its proud past.
"The mood is pretty depressed here. It has gone from boom town to gloom town," said Coventry man Alan Morris, 60, a sheet metal worker made redundant who now runs a coffee stall in the city centre.
To help cushion the blow, Jaguar said it would develop three new products: a new all-aluminium XK sports car, a premium diesel version of the XJ sedan, and a high-performance X-type diesel. It will make a long-wheelbase version of the XJ and a X-type estate for the U.S. market.
Born in 1922 as the Swallow Sidecar Co. in Blackpool with a 1,000 pound bank overdraft, Jaguar has made its sleek and distinctive cars since 1935. It sold 120,570 cars last year.
But the dollar's weakness hurt business in North America, which accounted for nearly half of Jaguar's sales in 2003.
Ford, which cut a deal with unions this month to save its British sport-utility vehicle maker Land Rover, said last month it would reduce Jaguar's planned 2004 output by about 15,000 units to help clear inventories. The largest union at Jaguar said then it had been assured no jobs would go.
The division's disappointing performance is weighing heavily on overall results at PAG, which also comprises Land Rover, Volvo and Aston Martin.
Ford's luxury car business is key to its goal of booking $7 billion in annual pretax profits by 2006.
Premier Automotive and Ford's Lincoln brand are supposed to account for a third of that profit. But PAG sank to a pretax loss of $362 million in the second quarter from a profit of $166 million a year earlier, hit by the strong euro, model changeovers and higher operating costs.
