Jaguar Land Rover is to cut 500 jobs at its engine plant in Merseyside at the start of what it hopes will be a process of further scale back of its operations in the UK.
The company announced in late November it would close four British factories over the next three years, with the closure of the engine plant at Halewood the next wave of closures in July.
On Monday the company said it would be cutting 500 jobs this year in Halewood and Stobart engines at Burnaston, both of which are producing diesel engines and as a result “making efficiencies is an inevitable step”.
The last significant job losses for the plant’s 4,000 workers were in 2011, when it lost 1,500 jobs as part of a six-year downturn in UK car industry and manufacturing in general.
Jaguar Land Rover’s UK workforce currently employs 47,500 people, of which 24,800 are employed at its UK factories. But the cuts announced by the group are part of an overall reduction in UK employment of 30,000 over the next three years to save £400m.
The company is continuing to invest in producing diesel and electric cars in the UK and in Austria, Belgium and Poland to meet new emission standards. Its first all-electric car, the I-PACE SUV, is due to be on sale this year.
The group has said that it will produce an electric Jaguar by 2025, but there are doubts about whether Jaguar Land Rover will be able to sell electric cars at any scale.
Ralf Speth, the company’s chief executive, announced last week that the company’s UK workforce would benefit from the decision to close the engine plant at Halewood and that it would be focusing on developing zero-emission vehicles. The Halewood plant, which started making diesel engines in 1986, is the only dedicated diesel engine plant in Britain.
Jaguar Land Rover is one of a small but growing number of car companies to raise concerns that diesel vehicles are failing to sell at the pace which once driven into the future and that changing ownership tax rules are to blame.
The diesel market has collapsed in the past five years, accounting for just 17 per cent of cars sold in the UK in 2017, according to figures from the Society of Motor Manufacturers and Traders. That was an all-time low, with the number of diesels coming into dealerships halving in the last five years.