Ford has become the latest major car manufacturer to cut production in Britain
1 October 2008

Ford has become the latest major car manufacturer to cut production in Britain as the global financial crisis begins to engulf the European motor industry.

Workers at the Ford Transit factory in Southampton will now work a four-day week until the end of the year.

It means 17 fewer days of production at the plant - all part of an effort to avoid stockpiling vehicles that aren't selling.

The Transit is the only vehicle that Ford builds in the UK. As we've previously reported, there's been speculation about the Southampton factory's future for some time. Some Transit production has already moved to Ford's Turkish factory, where costs are cheaper.

Today Ford of Europe announced that it expects profits to drop in the second-half of the year due to rising raw material costs and a cut in demand for new vehicles.

Car buying in the UK has slowed in part because the financial crunch has led to a shortage in the availability of credit for new cars in Britain.

After plunging car sales were announced in August, most car manufacturers have been winding back production in factories throughout the UK and Europe, fearing worsening results in months to come.

Toyota has already suspended the night shift at Derby where the Auris and the Avensis are made. Meanwhile, Jaguar and Land Rover has cut Friday production at Halewood, with staff having 'training days' instead.

Bentley has switched its Crewe factory to a three-day week, and Aston Martin revealed that it only sold 19 cars during the whole of August.

No job losses have been announced at any UK factories. But analysts predict that it could only be a matter of time if the current market turmoil persists.

Elsewhere in Europe, Mercedes-Benz and BMW will trim production by around 25,000 cars in the last three months of 2008.

Spain stands to lose 1300 Ford and 600 General Motors jobs, as the two big American car makers cut production. Spain's domestic manufacturer Seat intends to reduce Altea and Leon production by 300 cars per day.

Production of the Fiat Punto, Lancia Ypsilon and most Alfa Romeos will be scaled back by idling Italian factories in September, October and November.

Struggling Ford-subsidiary Volvo plans to drop the night shift at Gothenburg, Sweden. And the slow-selling Renault Laguna is forcing major cut backs at French factories too.

Part of the reason for the drastic cuts, analysts suggest, is that manufactures refused to face up to slowing sales earlier in the first half of the year, and pumped out vehicles regardless.

In all, JD Power estimates that European factories will have made 15.4 million cars by the end of the year, compared with 16.1m in 2007.

Will Powell

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Comments
6

1 October 2008

This story caught the national newspaper headlines and TV reports yesterday. Bad news for Ford Southampton workers but the far more economically significant story both in terms of units of output cut and the potential for loss of numbers of workers unless demand picks up was the 'buried news' of Jaguar Land Rover chopping the night shift for assembly of Range Rover, RR Sport and Defender(LR3) at Solihull, until further notice. 5,500 workers are employed at Solihull, predominantly on assembly of the three vehicles, which last year produced more than 130,000 units. This action by the JLR management dwarfs the cutting of less than 20% of weekly output at a light commercials plant producing no more than 70,000 units a year previously.

http://www.lro.com/news.php?sid=197&page=1

"Land Rover closes the night shift"

Only Land Rover Owners magazine reported this story as of yesterday, 30.9.08, now why would that be?

1 October 2008

Horseandcart,

Just a quick point of note. You're right about the economic significance of the JLR news - but we haven't buried it.
We reported on the Land Rover cut-backs on 1 Sept:
http://www.autocar.co.uk/News/NewsArticle/AllCars/234684/
We've also been regularly reporting on Jaguar's sales figures and the dropped shifts - most recently on 19 Sept:
http://www.autocar.co.uk/News/NewsArticle/AllCars/235084/
Hope this helps. We'll put more links into the Ford story to better tie these together.


Will Powell,
Deputy News Ed


1 October 2008

To clarify, when you say you've already reported on the production cutbacks at Land Rover, you refer to the cutting of production on Friday only, which was announced some weeks ago. I am referring to the much larger cutback of the whole night shift, going from two shifts to just one at Solihull, Land Rover's main plant. As I say this has now been covered by an enthusiasts magazine, LRO, and first hinted at end of last week and I believe reported, on-line at least, by the local paper, the Birmingham Post&Mail. Outside of that there are no reports.

However, it looks like Automotive News have just picked it up as a search shows a story of 'Land Rover further cuts' published just minutes ago:

http://www.automotiveworld.com/WVMA/content.asp?contentid=71264

"Jaguar Land Rover is reportedly preparing to scale back production at its UK plants once again, according to Automotive News. The OEM, recently acquired by Indian manufacturer Tata, cut two shifts at the Land Rover plant Solihull in August."

- you need to subscribe to read the whole story.

I believe, as JLR no longer needs to report as much information since it left Ford, a publicly quoted company, the flow of information, especially as the news is poor and the outlook getting blacker by the week, the JLR management are able to keep a lid on reporting of these substantive cutbacks into full circulation, like the Ford Transit plant story.

2 October 2008

Can I just point out that Toyota has only suspended the Auris night shift.

Avensis production is still on two shifts.

3 October 2008

I have to say I told you. Jaguar Land Rover utterly bust. Boss David Smith sending up smoke signals in Paris at motor show: we f*cked; please arrange bailout tout suite with UK taxpayer money; Indian 'owner' will not cough up - bust itself anyway; mass redundancies starting before Xmas if not, gun to head etc., etc.. Please arrange similar to US carmakers, bailout under guise of 'green' hogwash to deflect criticism.

Jaguar calls for US-style green subsidy for cars

http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article4870821.ece

Your pound currency will be worthless at this rate inside of a year. Good luck!

3 October 2008

[quote horseandcart]I have to say I told you.[/quote]

As predicted here:

http://www.autocar.co.uk/blogs/autocarconfidential/archive/2008/09/23/can-i-have-some-money-too.aspx

"Can I have some money too?"

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