Castle Bromwich move comes after carmaker was accused of ‘scaremongering’ about Brexit

This article is more than 2 years old

This article is more than 2 years old

Jaguar Land Rover has announced that about 2,000 staff will move to a three-day week at its Castle Bromwich plant in the West Midlands, only hours after the carmaker was accused of “scaremongering” about the impact of Brexit by a Conservative MP.

JLR, owned by the Indian conglomerate Tata, said it had made the decision to reduce production as it wrestles with difficult conditions in the automotive industry, caused by Brexit and slumping sales of diesel-powered cars. Staff are expected to work reduced hours until at least Christmas.

A spokesperson said: “In light of the continuing headwinds impacting the car industry, we are making some temporary adjustments to our production schedules at Castle Bromwich.

Jaguar Land Rover boss 'scaremongering' on no-deal Brexit, says Tory Read more

“We are, however, continuing to overproportionally invest in new products and technologies, and are committed to our UK plants in which we have invested more than £4bn since 2010 to future-proof manufacturing technologies to deliver new models.”

The chief executive, Ralf Speth, has previously cited uncertainty over Brexit and confusion over government policy on diesel engines as factors limiting JLR’s prospects, after it cut 1,000 jobs at its Solihull plant in April.

He also warned last week that tens of thousands of jobs in the automotive sector would be at risk if the UK crashes out of the EU without agreeing an exit deal with Brussels. The company, which employs 40,000 people in the UK, has previously warned it would have to reconsider £80bn of UK investment over five years in the event of a no-deal Brexit because a disorderly departure from the EU would hinder access to the single market and disrupt the flow of car parts into the UK. The Castle Bromwich site makes the Jaguar XF, XJ and XE saloons and the F-Type sports car.

On Monday morning, hours before JLR revealed its plan for production schedules at Castle Bromwich, the pro-Brexit Tory MP Bernard Jenkin accused Speth of “scaremongering” over Brexit and “making it up”.

The shadow business minister, Rebecca Long-Bailey, responded to Jenkin’s comments, saying JLR’s move “shows just how much the continued uncertainty around Brexit is hurting jobs and investment.

“It is irresponsible for senior Tories to dismiss the genuine concerns from businesses about the government’s chaotic handling of Brexit.

“The Tories cannot continue to spar with each other and play ideological games whilst British jobs and industries are being pushed off the edge of a cliff.”

The Labour MP Jack Dromey, whose Erdington constituency includes the Castle Bromwich plant, said: “Brexit now threatens the jewel in the crown of British manufacturing excellence. Ministers must get it right or the future is bleak.

“This morning, a wide-eyed Brexiter, Bernard Jenkin MP, in his ideological zeal, accused Jaguar Land Rover chief executive Ralf Speth of ‘making it up’.

“Now we know fears are justified. A hard Brexit or no deal will be catastrophic for Britain’s automotive industry.”

The car industry has also been affected by confusion among consumers about whether or not they should buy diesel cars, which has sent sales sliding. Drivers are worried that the government is planning to penalise diesel cars with higher taxes, including at local level through city pollution charges, to address fears about the fuel’s environmental impact.

Prof David Bailey, an automotive expert at Aston University, said Brexit and diesel were a “double whammy” for JLR.

“Brexit uncertainty dragged down the market overall,” he said.

“On top of that, the shift away from diesel hurts JLR especially because over 90% of their sales last year were diesel.”

He warned that Castle Bromwich was a particularly vulnerable plant, which narrowly avoided closure in the aftermath of the 2008 financial crisis.

“If there is a hard Brexit, I do fear for its future,” he said.

The automotive industry, which employs 186,000 people in the UK, has been among the most vocal sectors in British industry about the pitfalls of a no-deal Brexit.

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The chief executive of the sector’s trade body, the Society of Motor Manufacturers and Traders (SMMT), warned this year that auto firms were not ready for this scenario, with the official exit date of 29 March 2019 looming.

Asked if there were any potential Brexit benefits for the British automotive industry, which has a combined annual turnover of £82bn, Mike Hawes said: “Not that we can see.”

• This article was amended on 17 September 2018. About 2,000 JLR staff will move to a three-day week, not more than 3,000 as an earlier version said.