Jaguar Land Rover to close factory

Car giant Jaguar Land Rover is to close one of its UK plants in changes outlined to workers today.

The firm said it will decide next year whether to close its factory at Castle Bromwich in the West Midlands, which makes Jaguars, or its site at Solihull, which makes Range Rovers.

The company said there will be no compulsory redundancies involved in the closure, adding that up to 800 new jobs are to be created at Halewood on Merseyside because of a decision to build a new Range Rover.

The firm, owned by Indian giant Tata, employs around 5,000 workers in Solihull, 2,000 in Castle Bromwich and 1,800 at Halewood.

Jaguar Land Rover gave details of a new business plan it said was designed to increase its global competitiveness significantly, drive growth and sustained profitability, and respond to the challenges of climate change.

"The plan includes decisive actions to see through the next 12-18 months as markets recover and positions the company to grow and prosper in the future. It includes a new and expanded range of products and environmental technology, delivered through streamlined and competitive costs and a new manufacturing strategy," said a statement.

Chief executive David Smith said: "This is a plan that recognises the impact the economic collapse has had on our business, and at the same time the opportunities that lie ahead for these two great brands.

"We are confident that a new, more efficient and competitive structure combined with future investment will unlock the true potential of this business."

The company has already responded to the downturn over the past year by cutting production by 100,000, axing 2,500 jobs, freezing pay and cancelling bonuses.

"This was not enough to offset the full magnitude of the downturn and the company swung from profit in 2007 to significant losses over the past 12 months.

"This was not a sustainable situation. Actions taken have started to reverse the trend, quarter over quarter, and we now have to take the company to the next level of competitiveness."

The firm said it had to match, if not beat, the levels of cost and efficiency achieved by its competitors so it aimed to produce improved products and boost their environmental performance.

"As the company reduces engineering complexity for its new product range, West Midlands manufacturing will transfer from two plants to one by the middle of the next decade, improving efficiency and cost.

"Further cost reductions include pension restructuring, lower employment costs for new hires and a focus on IT and business simplification. Volume growth, especially in emerging markets, combined with low-cost country sourcing will also reduce variable cost.

"The entire package of measures does not envisage any compulsory redundancies.

"This plan of action will restructure the company and deliver positive cash and profits that are essential to re-invest in the business and secure its future," said the statement.

The firm said it would build a new generation of lightweight vehicles, with hybrids and electrification technology which it said will "significantly" reduce fuel consumption and CO2 emissions.

Around £800 million has been dedicated to environmental innovation and the new plan includes building the Range Rover LRX, which the firm said will be the smallest, most fuel-efficient Range Rover yet.

Today's announcement included news that a production version of the Land Rover LRX concept car will be built next year at Halewood.

Designed and engineered at Land Rover's site at Gaydon in the West Midlands, it will be the smallest, lightest and most efficient vehicle the company has produced.

Phil Popham, managing director of Land Rover, said: "The production of a small Range Rover model is excellent news for our employees, dealers and customers. It is a demonstration of our commitment to investing for the future, to continue to deliver relevant vehicles for our customers, with the outstanding breadth of capability for which we are world-renowned.

"Feedback from our customer research also fully supports our belief that a production version of the LRX concept would further raise the desirability of our brand and absolutely meet their expectations."

Gerry McGovern, Land Rover design director, said: "The new vehicle will be a natural extension to the Range Rover line-up, complementing the existing models and helping to define a new segment."

Bert Hill, regional officer of the GMB union, said: "We are now in a meeting with the company to hear details of their plans. GMB will be opposing everything we have heard so far. We will fight the company on this - of that I have no doubt."