BRIC declines set to cost JCB 400 jobs

A SLOWDOWN in the emerging markets could cost the jobs of 400 people employed by Staffordshire excavator manufacturer JCB.

The company, which has major interests in markets such as China, India and Brazil, is in talks to shed the jobs after its business was impacted by declining markets in the so-called BRIC countries.

In the first six months of the year, the company said the market in Russia had dropped by 70%, Brazil by 36% and China by 47%. Parts of Europe are also struggling, with France down by 26%.

Even the strong growth in the UK and North America has softened due to a fall in market confidence over the summer, which has been prompted to an extent by low oil and commodity prices in countries which depend on these resources to drive economic growth.

As such, demand for the company’s iconic diggers has fallen off dramatically.
JCB CEO Graeme Macdonald said: “Market conditions in the construction equipment sector have been difficult for some time, but they have worsened quite rapidly in recent weeks. The situation is not about to improve, certainly not in the short term, so we now need to take difficult but decisive actions to align overheads to lower sales forecasts. Regrettably, this will result in up to 400 staff positions becoming redundant across our UK businesses.”

The GMB union said the job losses were the first ripple caused from the downturn in the BRIC economies.

It has pledged to do everything it can during the consultations to avoid compulsory redundancies and to mitigate the impact on the workforce.

Gordon Richardson, GMB senior shop steward at JCB, said “These 400 job losses are the first ripple from the downturn in world markets including China impacting on the UK economy.

“This huge wave of uncertainty is likely to lead to further job losses in the sectors that trade with the rest of the world.

“GMB will do everything we can during the consultations to avoid compulsory redundancies and to mitigate the impact on the workforce.”