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Land Rover plant pressed on plan to reduce costs

Union, management get one more week on cost, quality issues

By Matthew Fletcher / Bloomberg News

Land Rover, the luxury sport utility vehicle division of Ford Motor Co., gave unions and local managers an extra week to produce a plan aimed at reducing costs while boosting competitiveness and quality.

“The team has done a good job, but not good enough,” Mark Fields, head of Ford’s Premier Automotive luxury group, said in an interview. “If they don’t deliver, the future of Solihull (the plant in England northwest of London) will be less secure. There can be no half measures.”

Ford’s luxury group includes Land Rover and the Jaguar, Aston Martin and Volvo car brands. The group reported a $362 million second-quarter pretax loss. On Friday, Ford said it will cut Jaguar car production by 15,000 units this year to lower inventories.

Jaguar has been hampered by the U.S. dollar’s weakness against the British pound and the euro, a development that undercuts profits for European companies that export a large percentage of their products to the U.S. market. Jaguar’s U.S. sales, which account for about half of the luxury unit’s annual sales worldwide, dropped nearly 22 percent in July from a year earlier. They are down about 6 percent this year.

Fields, 43, will review a final proposal from the union and management on Sept. 8, he said. Ford wants Land Rover to match levels of efficiency and quality at its Jaguar division within three years, and match other luxury carmakers within five years, he said.

Land Rover’s Solihull, England, plant makes the $70,000 Range Rover, and the Defender and Discovery models. The unit plans to transfer production in 2006 of its best-selling Freelander vehicle to Ford’s Halewood, England plant, which makes Jaguar X- type cars. The shift will cut 1,000 jobs at Solihull, which has a workforce of 8,200 employees, and create 1,000 jobs at Halewood.

“So far this year, Land Rover has not been profitable,” Fields said without giving details. “The discussions we are having right now are critical to addressing that.”

Land Rover is battling to restore quality levels that have dropped in recent surveys by independent analysts. Last year, workers at the Solihull factory turned down a package of proposals aimed at reviving quality and workmanship. The proposals included a ban on smoking and dining on the production line. The changes were later accepted.

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Stacy94PGT
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....