Jaguar Land Rover (JLR) has furloughed around half of its staff due to the impact of the coronavirus pandemic, with executives also set to defer salary payments.
The British car maker employs 40,000 people globally, with the majority based at facilities in the UK's West Midlands, including the Castle Bromwich and Halewood production lines. About 20,000 staff with “roles that are not critical during this temporary period of disruption” have been furloughed, although their wages are protected in full in April.
Alongside the mass furloughing, JLR’s executive leadership team will defer their salary payments for the next three months. Chief executive Sir Ralf Speth takes a 30% cut, the board of management 20% and the executive leadership 10%, the BBC reports.
A JLR spokesman said: “With production temporarily suspended at our plants in the UK, we are utilising the government’s Job Retention Scheme."
JLR sales take virus hit, with Jaguar plummeting further
JLR has also released its retail sales figures for the 2019/2020 financial year, covering the twelve months from the start of last April. The figures show a significant impact across the globe, with China the only region recovering in the near-term.
The company sold 508,659 cars in the last twelve months, down 12.1% on the same period last year. A more significant dent was made in the last quarter between January and March, with total sales down 30.9% year-on-year to 108,869.
The figures vary between brands. Jaguar took a particular hammering, down 22% overall in the year and 42.6% year-on year in the last quarter at 28,288. Land Rover, by comparison, was down by 7.7% and 25.6% respectively, selling 81,581 in the last quarter.
JLR is quick to point out its relative successes despite the doom and gloom, however. Range Rover Evoque sales were up by a quarter year-on-year, while Jaguar I-Pace sales increased by 40%. It also claims to have ended the financial year with £3.6 billion of cash and unaudited short-term investments and an undrawn credit facility of £1.9bn.
There's no word on a restart date for any JLR facility. The company says it's “rigorously following the guidance of all the relevant authorities in the countries in which it operates and will work towards a phased return to production as soon as conditions permit”.
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The Covid 19 crisis will
The Covid 19 crisis will probably lead to more industry consolidation. JLR is one of the smallest car makers left who does nearly all its own development work. Audi by contrast can leverage the might of VWs R&D whilst Mercedes and co have bigger volumes to keep themselves independent.
O suspect JLR will be swallowed up, this may be good in that they could benefit from the higher volumes of a bigger car maker. However given how far they've come pretty much by themselves since Ford sold up I think that may be a sad day for the car fan who may have hoped that another car maker could hold up against the big German 3.
And that's before China responds
They’re going to run out of cash
They're going to run out of cash if this shutdown is prolonged