Luxury car maker Jaguar yesterday said it was cutting more than 1,100 jobs at its Brown's Lane plant in Coventry, ending 50 years of assembly at the site.
The news drew a furious response from unions with the T&G general secretary, Tony Woodley, declaring the fight was on for "the heart of Jaguar production" and warning yesterday's move was a precursor to plant closures.
Jaguar and its parent company, Ford, sought to sweeten the pill by promising to maintain Jaguar's historic connection with Coventry by keeping its headquarters and some manufacturing in the city as well as announcing new or updated Jaguar models and 300 new jobs at Aston Martin.
Mark Fields, Ford's most senior European-based executive, warned the group had been forced into drastic action because of mounting losses. Ford's premier automotive group lost $326m (£182m) in the second quarter of the year, a substantial amount of which is thought to stem from Jaguar.
Yesterday's plan will see 425 jobs transferred from Brown's Lane to the Jaguar plant at Castle Bromwich, Birmingham, next summer along with production of the XJ range and new all-aluminium sports car, the X150. Some 310 manufacturing jobs will remain at Brown's Lane in the wood veneer facility, but 400 assembly workers will be offered voluntary redundancy on "the best-ever Jaguar terms", according to the company, while 750 white collar staff - about one third of whom are agency workers - will lose their jobs, making a total of 1,150.
Jaguar will pull out of formula one motor racing and Ford announced that none of its brands will compete in future, with the F1 business now being put up for sale.
Joe Greenwell, the chairman and chief executive of Jaguar, said the changes would save it an estimated $120m a year. He acknowledged there would be one-off charges to fund the changes but declined to give figures. Although he expressed regret about the loss of jobs, Mr Greenwell said: "I believe this plan is essential to Jaguar's future and will enable us to contribute more positively to Ford's bottom line."
Jaguar has been hit by fierce competition in its important American market, where a price war has raged among marques such as BMW and Mercedes as well as Jaguar, a battle which has intensified as an increasing number of buyers have switched to sports utility vehicles. Jaguar, with production concentrated in the UK, has also suffered from the strength of the pound against the dollar.
Mr Fields argued yesterday that the central issue facing Jaguar was that with plants at Brown's Lane, Castle Bromwich and Halewood on Merseyside, Jaguar simply had too much production capacity.
"Jaguar is back in a serious loss-making position. [It] simply cannot support three assembly plants with annual sales of 125,000 cars."
Mr Woodley said the writing was on the wall for Brown's Lane. "Anyone who thinks it is going to survive as a headquarters and wood veneer shop is living in cloud cuckoo land." He accused Ford of going back on agreements about the future of Brown's Lane, seen as one of the most efficient plants in Europe, and failing to consult unions on the turnaround plan.
The situation would have been different in the United States or mainland Europe, he said. "It's the Brits being targeted again because the labour laws don't protect them."
Union officials will meet on Monday ahead of wider consultation with the workforce. "We are fighting for the heart of Jaguar production and the future of jobs," he said.
