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UK:Jaguar to lose 'millions' despite UK plant closure

Jaguar to lose 'millions' despite UK plant closure

Financial Times
By James Mackintosh, Motor Industry Editor

Jaguar is likely to continue to lose money for the next two years in spite of ending car production at its UK plant in Coventry with the loss of 1,150 jobs, the head of the luxury marque said on Monday.

Joe Greenwell, chairman and chief executive, said Jaguar's restructuring plan aimed to bring the company to break even by 2007, much later than analysts had expected.

Ford Motor, Jaguar's American owner, has promised to make profits of $2.3bn from its luxury brands by 2006 but analysts say that will be difficult if Jaguar remains lossmaking.

Jaguar is braced for criticism from trade union leaders due to appear before British members of parliament on Tuesday.

But Mr Greenwell damped hopes that an agreed meeting between management and unions could lead to any change in plans for Coventry. "We are losing hundreds of millions of dollars," he said in an interview. "Frankly the company is unsustainable and non-viable at these levels.

"We will listen [to alternative plans from the unions] but I wouldn't want to mislead anyone: we are still of the belief that our strategy is the right one."

Unions and MPs have persuaded Tony Blair, the British prime minister, to intervene after arguing that Jaguar had failed to consult workers and to keep its promise to continue to build cars at the city's Browns Lane plant.

But Mr Greenwell hopes the long-running losses and forecasts of two to three years before the carmaker returns to the black will help convince workers that ending Coventry car production is necessary.

Tony Murphy, officer for the motor industry at Amicus, the union, said: "We want to make clear that Ford has not made a business case for the cuts."

Jaguar hit problems this year when currency hedging ran out and its models proved less popular than expected in the US, its biggest market. This caused escalating losses and Mr Greenwell dropped the goal of selling 200,000 cars a year in favour of 120,000 a year - making it impossible to fill the factories in Coventry, nearby Castle Bromwich and Halewood on Merseyside.

But Mr Greenwell denied union suggestions that the remaining plants and engineering facilities could be at risk.

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.....
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