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a move to turn the business around, Joe Greenwell, Chairman and CEO Jaguar
and Land Rover, has announced that the Jaguar plant at Browns Lane in
Coventry will cease its final assembly operations. While there will be
a relocation of 425 jobs to the Jaguar plant in Castle Bromwich, Birmingham
, over half of the 2,200 employees will be made redundant. Apart from
housing a downsized headquarters staff, the heritage centre and the wood
veneer manufacturing centre, the rest of the site will be sold for re-development.
Mark Fields, PAG boss,
has been ruthless, yet realistic with Browns Lane. He said:
"Decisive action was needed to get Jaguar back on track
and to ensure a viable future." |
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It was also announced that Jaguar will be withdrawing from Formula One
at the end of this season, which has just three Grands Prix to go. The
entire Formula One business is being put up for sale as the rumoured Ford
rebranding of the team will not take place.
Other actions being taken by Jaguar to stem the losses include a review
of its retail and market infrastructure throughout the world, and revenue
management steps that include a reduction in daily rental units and revised
series and model actions.
Jaguar also used the announcement to give details of an all-aluminium
XK sports car - codenamed X150 that will go on sale in early 2006 - the
first production car to feature Jaguar’s new design language, developed
by Design Director Ian Callum. It will be produced at Castle Bromwich.
"Our new business plan was developed following a rigorous review
by the Jaguar management team, said Greenwell. “We examined a number
of alternatives and I would not be presenting this plan today had I not
been absolutely convinced that it is the right plan and completely necessary.
"The plan is wide-ranging, extends over a number of years and touches
most aspects of the business. It also includes some severe measures that
we do not take lightly - but that is a reflection of the highly competitive
and global nature of the business we are in.
"The fact is despite significant sales growth and excellent levels
of quality in recent years, we have not been able to keep pace with significantly
larger competitors. We have too much capacity and this is our underlying
structural problem. Our bottom line has further deteriorated this year
with the weakness of the dollar, unprecedented incentives in the premium
market and the shift from premium cars to SUVs. We had no choice but to
take action and I firmly believe that all the elements of this plan are
essential if we are to stem the losses."
Greenwell also confirmed that, despite the difficult business circumstances,
it is the intention to do everything possible to achieve this restructuring
on a voluntary basis. "It is with deep regret that we have had to
announce some actions today which affect people's jobs. However I can
give everyone my personal assurance that we will do everything we can
to support those affected.
"The package of actions we have announced today will focus on the
issues we currently face and will help position Jaguar for a bright future
founded on strong product plans, a leaner cost structure and a stronger
focus on margins in the market place. I believe this plan is essential
to Jaguar's future and will enable us to contribute more positively to
Ford Motor Company's bottom line."
Mark Fields, Ford Motor Company, executive vice president – Premier
Automotive Group and Ford of Europe, said: “Decisive action was
needed to get Jaguar back on track and to ensure a viable future. Despite
the actions taken by the company’s management over the past few
years and despite the fact Jaguar is again the highest rated European
brand on product quality, Jaguar is back in a serious loss-making position.
There are a number of external factors which have exacerbated the situation
but we have faced and tackled the fundamental reality, that Jaguar simply
cannot support three assembly plants with annual sales of 125,000 cars."
Fields, Ford's most senior executive based in Europe added, "Manufacturing
capacity although a significant factor is only part of the issue and the
solution. What we have developed is a series of actions to strengthen
Jaguar. These also include a leaner organisation structure on the cost
side of the equation and on the revenue and brand side, a package of product
and marketplace actions which will drive the company forward in a way
which is more appropriate for the brand and will drive a better bottom
line.
“There is massive global affection for the Jaguar brand but frankly
we were operating to a business model that really offered little chance
of generating sustained profitability except in times of favourable exchange
rates. That had to change. The challenges we faced were both strategic
and tactical requiring attention to all elements of the business. This
plan has the full backing and support of the Ford management team. Joe
and I will be working together with the Jaguar team to implement the plan."
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