FORD’S British luxury car brands could be hit by more factory closures amid fears that the US giant will merge Jaguar and Land Rover.
Union concern is growing that Ford’s decision yesterday to end carmaking at the factory where Jaguar was created, which The Times disclosed on Wednesday, is a first step in a more radical restructuring.
Ford admitted in a business plan yesterday that it was not seeking to boost sales of Jaguar but instead reduce sales incentives to increase profits on each car.
If it does not increase volumes then insiders believe that it will not solve the cost problem that it complained of when it closed its Browns Lane plant in Coventry for car manufacturing.
Mark Fields, the head of Ford’s Premier Automotive Group, which includes Jaguar, Land Rover, Aston Martin and Volvo, refused to rule out more closures.
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Mr Fields said that Jaguar, which lost more than £140 million in the first half of this year, would be monitored for “sequential improvements”. The closure will mean annual savings of £120 million but will cost far more initially in redundancy charges and other costs. Mr Fields said: “Jaguar simply cannot support three assembly plants with annual sales of 125,000 cars.”
Ford may face major industrial action over its plan to end manufacturing at Browns Lane, leaving only a headquarters operation and a facility producing wood veneers. Unions gave warning yesterday of potential action across Ford’s operations in Britain because they say that the company broke an agreement to maintain manufacturing at Browns Lane. More than 1,100 are to lose their jobs when manufacturing halts.
Browns Lane makes Jaguar’s most expensive cars: the XJ saloon and the XK sports car. These will go to the nearby Castle Bromwich Jaguar factory, which produces the S-Type saloon. Only 425 production workers will be transferred from Browns Lane to Castle Bromwich.
Jaguar has suffered because of falling sales in the US, which has been adversely affected by the exchange rate, and by greater competition. But its long-term strategy has also been badly damaged because sales have failed to match Ford’s expectations. Originally the US company, which bought Jaguar in 1989, planned to increase volume to 300,000 cars a year, putting much store on the potential of the X-Type smaller car which was directed at a younger market.
But the X-Type has proved disappointing, with some motoring commentators complaining that it is not distinctive enough as a Jaguar.
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The T&G and Amicus unions have vowed to fight the closure. Derek Simpson, the general secretary of Amicus, said: “Ford’s decision may kill off Jaguar. Our members will fight like tigers to keep the lion’s share of quality car manufacturing in Britain.”
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