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News that Jaguar Land Rover (JLR) was to cut 4,000 jobs was a cause for uncertainty and stress for company workers and those in the wider supply chain, experts have said.
Prof David Bailey from the Birmingham Business School said he worried it could limit the company’s ability to innovate in the future while David Roberts, chairman of Coventry-based Evtec Group, said up to 200,000 jobs could be tied to JLR.
The cuts will happen over the next two years and will mostly affect the head office in Whitley, Coventry.
But there are concerns about the impact the job cuts will have on the West Midlands’ skill base.
“The danger there is, in part, if they cut for example too many workers in research and development that could affect their future ability to develop new cars,” Bailey said.
“So it’s a really critical phase for the company and there’s going to be real concern at the firm about what’s happening.”
He said he understood JLR was facing a range of issues, but cutting the workforce was risky.
“When margins are squeezed, companies cut costs and investment; when investment is delayed, the UK becomes less competitive; and when competitiveness falls, future investment increasingly goes elsewhere,” he said.
Bailey said the British motor industry needed government help to compete in the electric car market and it was crucial to more than jobs on the factory floor.
He said: “It anchors research and development, engineering capability, component suppliers and regional economies.
“Once those capabilities disappear, they are extremely difficult to recreate.”
Evtec supplies parts to JLR and chairman David Roberts said it was a “worrying time”.
“A lot of the jobs here, if they go, they go, they leave the sector,” he said.
“And these are jobs with real skills that take years to build and it’s easier to lose them.”
JLR has been dealing with falling sales, the consequences of a devastating cyber-attack that paralysed production last year, competition from China and rising energy prices.
At the same time, it has invested billions in an effort to reinvent itself for an electric future.
Dr Steve McCabe, a political economist from Birmingham City University, said he believed the job cuts were a strategic move.
“What JLR are trying to do is clean themselves up and make themselves more efficient in the hope that alowes them to survive,” he said.
“The hope is of course that its a temporary thing,” he added.
The company’s reinvention is due to take another step forward when it unveils a new electric car on 6 October.
Kevin Moreley, a former managing director of the Rover Group believes it could be a pivotal moment.
He said: “I always thought that only 300 redundancies for JLR was a little optimistic given the new Jaguar launch is still unpredictable, and VW are making 100,000 workers redundant.
“4,000 will not be the end of it if the new Jaguar doesn’t sell the numbers they hope.”
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There are concerns about the impact the job cuts will have on the region’s skill base.
Emily Stubbs, head of policy at Greater Birmingham Chambers of Commerce, said: “We’ve got deep advanced manufacturing skills base here in the West Midlands.
“The government, employers, training providers, need to work together to retain that within the regional economy.”
Richard Parker, Mayor of the West Midlands, said: “These are highly skilled people and I want those skills to stay here in the West Midlands.”
The Combined Authority had put together a £500,000 support package for JLR workers who take voluntary redundancy, he said.
He said more support may become available in the future and described JLR as “hugely important to our region”.
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