Ford to shut U.K. Jaguar factory
Slow sales, losses may cause 2,000 to lose jobs
Bloomberg News
Jaguar's 53-year-old plant builds the XJ sedan and the X8 coupe. The sales for both models have been below the automaker's expectations.
By Eric Mayne / The Detroit News
Ford Motor Co. will notify Jaguar workers today that it plans to close one of its three plants in Britain, said company and union sources familiar with the plans.
Jaguar executives were scheduled to deliver the news during a meeting with union officials who represent Ford's roughly 8,000 Jaguar workers in Britain.
Ford is widely expected to announce the closure of its Browns Lane plant in Coventry, which employs 2,000 workers and builds the XK sports coupe and XJ luxury sedan.
The measure is designed to stem deep and continuing losses at Jaguar. Still, the restructuring is a painful blow for British auto industry and one of its proudest brands. The closure of Browns Lane in Coventry, the home of Jaguar, would be akin to Ford shuttering the Rouge plant in Dearborn.
"From a Coventry kid's point of view, which I am, Jaguar's a Coventry car. It's not a British car," said Roger Maddison, regional officer of AMICUS, one of two unions that represent Jaguar workers.
In the second-quarter, Ford's premium Jaguar, Aston Martin, Land Rover and Volvo brands racked up combined losses of $359 million, largely due to deep losses at Jaguar.
The British brand is hampered by falling global sales, excess factory capacity and uncompetitive operating costs.
Improving Jaguar's financial performance has become a major priority for Ford management because the four luxury brands, with help from Ford's Lincoln brand, are expected to contribute one-third of the automaker's $7 billion pre-tax profit target by 2006.
Under British law, Ford is required to give union officials advance notice of plans to close a factory. The law, which kicks in when 100 or more workers are involved, provides for a 90-day consultation period, during which affected workers may draft and submit a rescue plan.
"At the end of the 90 days, they have to make the decision, one way or the other," said Maddison. "Very often, the decision's been made."
The 53-year-old plant in Coventry became vulnerable because of slow sales of the XJ sedan and X8 coupe built, which forced Jaguar to reduce production at the plant to four days a week, Maddison said.
"Jaguar is currently turning out about 120,000 vehicles a year at three plants," said analyst David Healy of Burnham Securities. "That's about half the capacity of one full-size plant in the United States."
Jaguar's U.S. sales are down 11.5 percent this year.
Workers at a Jaguar research and development center near Browns Lane may also face cutbacks, Maddison said.
"There are so many rumors bombing about here," he said, adding some fear their jobs will be shipped to the United States.
The union hopes to convince (Jaguar) to make some changes in work rules and convince Ford to bring work inside rather than taking work away, Maddison said.
