Jaguar Land Rover has initiated talks with unions over company-wide pay cuts to avoid more lay-offs at its three main UK sites. Unions have so far been happy with the JLR management and had in fact been campaigning hard to secure cash for the firm from the Government.
The fact that the talks could continue despite the unveiling last week of a support package for the automotive industry by Peter Mandelson, the business secretary, shows the good relations between the two sides.
JLR has so far laid off several hundred temporary and white-collar staff, and is thought to be considering cutting up to 1,500 more jobs if sales do not revive quickly. So, the move by the Tata management has generally been well-received because many blue-chip companies including Glaxo Smith Kline — which employs 18,000 in this country — are axing thousands of jobs.
The JLR management has offered a “menu” of possible changes to pay agreements in return for a pledge by the company to keep staff at work. David Smith, JLR’s chief executive, told The Sunday Times that the package would do little to revive demand before March, traditionally an important month for UK car sales. “What we have been trying to impress is that it doesn’t address the urgent nature of the problem,” he said.
Part of Mandelson's package was the provision of loan guarantees to car-finance firms. Mandelson also said the government would guarantee loans to UK car-makers advanced by the European Investment Bank. JLR applied to the bank in November.
JLR was likely to seek around £350.8m, but it was thought it would not be forthcoming until June, Smith disclosed. “We are trying to bring that forward to April," he said. The group, which employs around 15,000 people in the UK, would also reportedly apply for a further £1 billion UK government-loan facility.