Jaguar, the luxury car maker, will hold vital talks with union leaders today amid mounting fears that the Ford subsidiary is about to make substantial job cuts at its Halewood plant.
The gloom on Merseyside contrasts with optimism in the West Midlands, where MG Rover announced it was in alliance talks with a Chinese car company. They could open the way for new models, joint production and a foothold in the world's fastest growing market.
Jaguar has triggered anxiety within the 2,500 strong workforce at Halewood by warning it has been reviewing production levels of the X-Type car, launched in the spring.
A formal statement to its staff said: "We have begun... to establish the appropriate line rates and the manpower requirements. We will then communicate the details to our employees when the process is complete, and implement the results early in the new year."
Last night the company insisted no firm decisions had been taken about how many, if any, of Halewood's workers would be laid off. It dismissed rumours in Merseyside that up to 500 staff could go because sales of the X-type had fallen after September 11.
A spokesman admitted the initial launch phase of a model was often followed by a lower level of demand but insisted the new car was selling well. "Jaguar sales in November were 42% up in the US and 120% up in the UK. These increases are attributable to the sales of the Jaguar X-Type, which has also captured 60% of its sector in the UK markets. X-Type sales are also doing very well in Japan and continental Europe," he added.
The Transport & General Workers Union said it had received no formal notification of any redundancies but had heard team leaders had been told to expect layoffs in March. "We have a meeting with the company at which this subject will be raised tomorrow," said a union spokeswoman.
Meanwhile MG Rover said it was talking to China Brilliance Holdings, part of the Brilliance Group, about forming "a wide-ranging strategic alliance and cooperation agreement." These talks would not specifically affect separate discussions with Proton of Maslaysia about technical cooperation nor planning for a new medium-sized car. While emphasising there would be no cross-equity holdings, the two sides would look at:
· arrangements for the joint development of new models;
· the manufacture of various possible vehicles in Britain and China;
· the establishment of a common component supplier base;
· and the establishment of a joint research and development centre.
Several meetings have taken place between the two and "further announcements will be made in due course". Brilliance is not a well-known marque but it is the largest producer of minibuses in the world's most populous nation and had revenues of $2.5bn last year. It was also one of the firms that bid to buy the Midland Power Train engine factory and foundry that was bought eventually by MG Rover from BMW.
Tony Woodley, the TGWU chief car negotiator, said the MG Rover move was "an extremely good Christmas present for Longbridge workers". He said Brilliance was not a big firm but, like the Japanese before, "from small acorns mighty oaks can be born". He declined to comment on Jaguar.
