BMW warns on Rover jobs
Wednesday 30 September 1998
Speaking on the opening day of the Paris Motor Show, BMW's chairman, Bernd Pischetsrieder, said further action would have to be taken if the current downturn continued and the pound remained strong.
BMW has already cut 1,500 jobs at Rover, put the Longbridge plant on a four-day week, and announced plans to switch pounds 1bn worth of component purchasing abroad.
The US electronics company, Viasystems, meanwhile, blamed the global downturn for the closure of two factories in the Scottish borders with 950 job losses.
Hepworth, the maker of Glo-Worm boilers, added to the gloom by warning of a further 200 redundancies on top of the 500 jobs it has shed in the UK and continental Europe in the past year.
Rover is in talks with its unions about the additional cutbacks amid fears that it may suffer losses of up to pounds 500m this year. "What they will be is being discussed with workers and unions, but I expect it will go beyond what we already announced," said Mr Pischetsrieder.
The company indicated that it would rein back production further to try to limit job losses. A spokesman also rebuffed suggestions that BMW's investment programme, currently running at pounds 600m a year, was under threat because of increasing losses.
Rover managed to cut its losses to pounds 92m last year from pounds 119m in 1996. But this year the strong pound has inflicted a double blow, making Rover's exports more unprofitable and exposing it to increased competition from cheap imports.
The Viasystems closures were condemned as a betrayal of the workforce by two Liberal Democrat MPs for the Borders region, Archy Kirkwood and Michael Moore. The MPs also called for a public inquiry into the public funding which the US company had received.
The Hepworth job losses will reduce the workforce by up to 10 per cent to around 6,300 people. More than 60 per cent of Hepworth's staff work in the UK, with the rest in continental Europe.
The redundancies are part of the group's efforts to buck tough market conditions in its core business by cutting costs and improving efficiencies.
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