Jaguar Land Rover management has already decided which UK factory to close – and the decision will be announced this autumn in 2010.
The car making group, which manufactures around 250,000 cars a year, operates out of three UK sites: Castle Bromwich and Solihull near Birmingham, and Halewood near Liverpool. Those sorts of volumes are more normally associated with a single factory or, at a push, two.
Carl-Peter Forster, the CEO of parent company Tata Motors, said the management team of Jaguar Land Rover had been working out how the company could be restructured more efficiently for some time.
‘We are still in discussions but technically the decision has been made,’ he told reporters at the 2010 Paris motor show. ‘But at some point we have to kill the discussion. It has to be this year.’
So which factory will Jaguar Land Rover close?
All the pointers seem to suggest that Land Rover’s plant in Lode Lane, Solihull is most at risk. It’s arguably the most old-fashioned of the three factories in the group – and Land Rover has already committed long-term to building the Freelander and Evoque in the modern ex-Ford plant in Halewood.
With the new Range Rover, Range Sport and Discovery lurking around the corner – launched from 2012 onwards – adopting new, higher tech aluminium construction like their Jaguar counterparts, it could be an ideal time to switch their assembly over to the alloy-ready Castle Bromwich plant. The replacement for the Defender utility 4x4 will also shift to a new site – possibly abroad, where lower costs would suit its positioning.
‘We currently have two plants eight miles apart,’ said Forster. ‘Most people travel more than eight miles every day in their commute. It does not matter in my view.’
So bad news for Jaguar Land Rover?
The efficiency gains will put JLR in much better shape financially. And Forster prefers to call it a ‘merger, not a closure’ since ‘we will in fact be creating more jobs not fewer.’ He said in the medium term, his plan was to grow the business to around 300,000 vehicles annually.
Whichever plant faces the axe will be run down gradually, added Forster. Watch out for the official announcement in autumn 2010.