Fresh jobs fears as Jaguar Land Rover unveils £2.5bn turnaround plan after £90m loss
Further job cuts could be on the cards at Jaguar Land Rover as it announced a £2.5bn turnaround plan to slash costs and planned investment after slipping into the red.
The car making giant, which employs around 40,000 workers in the UK, posted a £90m loss for the three months to September as car sales fell sharply.
It said it has launched “far-reaching programmes” to deliver cost and cashflow improvements.
JLR said: “Total profit, cost, and cashflow improvements of £2.5bn over the next 18 months are targeted while JLR says it has taken action to reduce planned spending by about £500m to £4bn per year this financial year and next.”
The UK’s largest vehicle manufacturer, which announced 1,000 job losses at its Solihull factory in April and moved around 2,000 staff to a three-day week at its Castle Bromwich plant in September, did not comment on whether the savings drive would impact further jobs.
JLR said retail sales declined 13.2% year-on-year to 129,887 vehicles for the quarter as it reported revenues of £5.6bn, down 10.9% year-on-year.
Earnings before interest, tax and depreciation (EBITDA) were £511m, equivalent to a margin of 9.1%.
The sales decrease primarily reflected challenging market conditions in China, the company said, where demand was adversely impacted by consumer uncertainty following import duty changes and escalating trade tensions with the US.
UK sales were impacted by diesel taxation and regulations, alongside continuing uncertainty related to Brexit.
In Europe, JLR said sales were also affected by continuing weakness in diesel demand.
Dr Ralf Speth, CEO, said: “Together with our ongoing product offensive and calibrated investment plans, these efforts will lay the foundations for long-term sustainable, profitable growth.”
JLR said: “The company’s financial performance is expected to improve in the second half, and Jaguar Land Rover now anticipates pre-tax profits to be about break-even for the full year ending 31 March 2019 impacted by the weaker than planned first half.”
