Ford today defended its decision to shut down the historic Brown's Lane Jaguar plant in Coventry as vital for the luxury car's survival.
Joe Greenwell, Jaguar's chief executive, told MPs of the trade and industry select committee that the future viability of the firm, and all its 8,000 workers, was under threat unless the closure went ahead.
"At the end of the day we cannot have three plants building 120,000 cars. It is a recipe for the end of Jaguar," Mr Greenwell said.
Under strong criticism from MPs for not consulting unions, Mr Greenwell stressed that the decision to switch production to Castle Bromwich would not be reversed despite a union campaign that will feature a rally in Coventry later this month.
"The difficulty of our position is such that unless we follow this path, the future viability of the company is at risk, as are the jobs of 8,000 people," Mr Greenwell told MPs.
In September, Ford announced plans to cut 1,150 Jaguar jobs at the Brown's Lane plant and shift production to the Castle Bromwich factory near Birmingham.
Questions over the future of the Brown's Lane plant, home to the sleek E-type jag in the 1960s, first surfaced in August, when Jaguar announced losses of £215m for the second quarter of 2004.
A dramatic drop in demand for Jaguars in America, partly due to the strong pound, prompted Ford to demand sweeping cuts. Jaguar, which was bought by Ford in 1989 for £1.6bn, forms part of the US car giant's luxury car group that includes Land Rover, Volvo and Aston Martin.
Despite sales growth and high quality levels, Jaguar has been unable to keep pace with larger rivals in the luxury car sector. Land Rover has also come under pressure. Earlier this year Ford gave its backing to a plan designed to secure the future of the Land Rover plant at Solihull, safeguarding thousands of jobs.
After the hearing, Mr Greenwell told reporters that Jaguar will not break even until 2007 despite the job cuts and that losses would run into "hundreds of millions" of pounds this year.
"There is no quick fix. It will take two or three years to stabilise this business," Mr Greenwell said. Jaguar will make fewer cars in future and focus on improving quality and profitability, he said.
In an angry reaction to Mr Greenwell's comments, union leaders accused the executive of "crying crocodile tears".
Tony Woodley, general secretary of the Transport and General Workers Union, said: "Mr Greenwell has acknowledged that Jaguar has a world-class workforce at Coventry and that the firm's rapid growth strategy has failed. This is a case of poor management leading a world-class workforce into oblivion."
