Struggling car maker Jaguar Land Rover is to reduce its workforce at its Halewood factory in Merseyside as the company plans to cease production of its X-Type model.
The global economic downturn has resulted in a slump in demand for big-ticket items, such as cars. This has affected carmakers worldwide with many cutting back on production, slashing jobs and seeking funding to see them through the downturn.
Meanwhile, Jaguar Land Rover is expected to extend its two-week summer shutdown due to “ongoing weaknesses in the industry”.
However, so far the carmaker, which has a UK workforce of around 15,000, has managed to avoid the lengthy shutdowns that fellow carmakers have been forced to implement.
Honda was forced to close its Swindon plant for three months, while Tata Motors recently revealed that growing losses had sent it plummeting more than £300 million in the red - its first annual loss in seven years.
Returning to the job losses, chief executive of Jaguar Land Rover, David Smith, said they were “necessary to protect other investment plans”.
He added: “Our industry has been especially badly hit by the recession and the premium sector more than others.”
“Jaguar Land Rover’s retail sales fell by 28% in the past 10 months. We have taken unprecedented actions to cut costs including reduced production volumes, significant cuts to investment plans and some 2,200 job losses.”
Commenting on the job losses, Prime Minister Gordon Brown said: “We want to secure a future for Halewood and we have offered Jaguar Land Rover a grant of £27 million toward the development of what are low-carbon Land Rovers at this plant, they would be produced there.”
In a bid to boost the UK’s ailing car industry, the Government launched a scrappage scheme and was launched on 18 May.
The £300 million initiative will give motorists £2,000 when they scrap their vehicle (which must be at least 10 years old). The Government will contribute £1,000, with the remaining £1,000 funded by car firms.
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