Jaguar Land Rover has increased its savings target for the year to $3.3 billion (£2.5 billion) following a $540 million (£413 million) pre-tax loss for the quarter ending in June. Losses are hardly uncommon within an industry shaken by the pandemic, but JLR went into this year already confronting an uphill battle.
In 2019, the company was deep in the midst of a restructuring plan aiming at $2.5 billion in life-sustaining savings. Unfortunately, the move required the elimination of thousands of positions as it tried to imagine the effects of Brexit and contend with falling sales in its largest markets. That includes China, which the firm assumed would offer continued growth in the months leading up to coronavirus’ big debut and increasing political tensions between the Communist Party of China and United Kingdom.
Cox Automotive eliminated around 1,600 jobs this month as it prepared to better embrace online commerce (and nobody having any money). The company axed nearly 300 employees in June after having furloughed over 12,000 people in response to the coronavirus pandemic this spring. A large number of those positions were related to its Manheim auction arm, which suffered the hardest due to stringent lockdown protocols that prohibited public gatherings.
Now it’s talking about improving some of the digital features it added to Autotrader this year and embracing the virtual landscape to future-proof itself while forecasting a 25-percent cut in annual profits, and letting people go — with the majority of the layoffs coming to furloughed Manheim employees.
On Thursday, Jaguar Land Rover was reported to be in the midst of a plan that would eventually lay off roughly 10 percent of its UK workforce — roughly 4,500 employees. Considering the company has been forced to endure waning demand for sedans and just about everything with a diesel engine, a bit of restructuring was inevitable. Especially since everyone else is doing it at the moment.
However, JLR’s layoffs won’t be exclusive to Europe, as initially presumed. Despite the vast majority of its workforce residing in the United Kingdom, a small portion of its American staff will likely feel the impact, too.
The big news this week is General Motors’ decision to cull its lineup, closing plants and sacking about 15 percent of its North American workforce in the process. According to Chief Executive Officer Mary Barra, GM’s official reasons for doing so are all part of its grand plan to transition to a company focused on electric vehicles and self-driving cars.
While we harbor a vague suspicion that the automaker is actually trying to prepare itself for an incoming economic downturn, leaving itself with plenty of financial wiggle room, GM currently enjoys relatively healthy profits (thank you, truck sales) and a lofty share price. In fact, GM shares rose nearly 5 percent after it announced the shuttering of several plants in the U.S. and Canada, cutting as many as 14,800 jobs.
Unfortunately, GM’s investors seem to be the only group that’s pleased with the decision. Everyone else appears to be absolutely furious.
Automakers are seeing diminished interest in product as market demand levels off after years of post-recession growth. While some analysts are heralding an industry-wide doomsday, others have cited this as an inevitable market ebb with no cause for alarm. Either way, domestic and foreign automakers have begun scaling back production efforts.
In the United States, Ford recently announced layoffs at its Ohio truck plant and General Motors may be following suit by eliminating 1,100 employees at the Delta Township Assembly Plant near Lansing, Michigan.
GM’s newest U.S. factory was already scheduled undergo retooling for the 2018 Chevrolet Traverse and Buick Enclave crossovers. However, when the plant reopens this June, there’s a good chance that third-shift employees won’t be returning.
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