JCB set to axe 150 jobs as demand declines in emerging markets

STAFFORDSHIRE excavator manufacturer JCB has announced it is to cut 150 jobs as a response to falling demand for construction equipment in the emerging markets.

The company will begin a 45-day consultation with workers at the beginning of November with the likelihood of the jobs being gone by Christmas.

JCB is hopeful the bulk of the redundancies will be voluntary and most will be in non-manufacturing roles. Most of the jobs are expected to go at its factories in Staffordshire, although its operations in Wrexham and Derbyshire may also be affected.

That the announcement should come now just as the UK is in the grip of a manufacturing-led recovery is concerning.

However, JCB chief executive Graeme Macdonald said the cutbacks were due to declining demand in the emerging markets. He has also warned that JCB’s annual sales – despite a strong performance from the UK market – are likely to be less than anticipated.

It is thought economic sanctions against Russia have played a part, while markets in Latin America, especially Brazil – where the company has a factory – have also declined.

Growth in China has levelled out but it still remains above 7% – an enviable figure by European standards.

With JCB being such a barometer for the health of the export markets, the move is also likely to send a chill through the whole of the manufacturing sector.

It is all a far cry from the situation 12 months ago when the company revealed details of the largest ever expansion of its business, with plans to invest £150m in new production facilities, creating more than 2,500 jobs.

The company is committed to a new factory in Uttoxeter, which will replace an existing operation in Rugeley, which will close. There will also be a new manufacturing plant in Cheadle.

It is also somewhat ironic that the announcement should come on the same day as fellow West Midland manufacturer Jaguar Land Rover officially launched production at its new plant in China – its first foray into manufacturing outside the UK.

The factory, located in the Changshu Economic Development Zone north of Shanghai, is a joint venture between JLR and China’s Chery. The facility has been opened as a direct response to increasing demand for JLR’s vehicles in the country, which is now JLR’s largest export market.

At the plant’s inauguration, JLR chief executive Dr Ralf Speth said: “The opening of this world-class facility is an important milestone for Jaguar Land Rover. Since its launch, one in five Range Rover Evoques have been sold in China. Our decision to manufacture the Range Rover Evoque in Changshu is a result of our commitment to bringing more Chinese vehicles to Chinese customers.”

By 2016, the facility is expected to be building three Jaguar Land Rover models with total production capacity of 130,000 units a year.

JLR has also confirmed that HM The Queen will officially open its new £0.5bn engine plant near Wolverhampton during a ceremony next Thursday.

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