JLR's 'controlled, phased restart' finally begins
With the trepidation of a foal's first steps, JLR confirms its gradual return to vehicle production
Having previewed it last week without fully committing to a timeframe, today JLR has nailed itself down to a time and place: its Electric Propulsion Manufacturing Centre and Battery Assembly Centre - both in Wolverhampton - will begin a ‘phased restart’ on Wednesday. As the phrase suggests, this is understood to mean limited capacity; it was never going to simply be a case of throwing a switch, even in ideal conditions - and clearly JLR has much to be cautious about.
Nevertheless, following the announcement of a £1.5bn business loan last week (which the UK government has somewhat controversially underwritten), it is evidence of definitive progress following five weeks of complete shutdown. There was more, too: from tomorrow, employees will begin to return to the firm’s stamping operations in Castle Bromwich, Halewood and Solihull.
Again, the presence of staff does not mean the immediate resumption of manufacturing, but JLR is understandably keen to convey that ‘key areas’ of its Solihull plant, not least is Logistics Operations Centre that feeds parts to other plants around the world, are showing signs of life. The firm suggests that a ‘controlled’ restart of its Range Rover and Range Rover Sport (i.e. MLA) production lines should begin later this week, followed by the Defender-making facility in Slovakia.
Clearly, those locations do not encompass everything JLR does, but it has promised ‘further updates’ for other sites, including its Halewood plant on Merseyside, which remains closed. Additionally, the company confirmed the creation of a short-term financing scheme that ‘will provide qualifying JLR suppliers with cash upfront during the production restart phase’ to help address the chronic cash flow problems faced by its supply chain. This will begin with those critical to manufacturing, but will eventually expand to include some firms not directly involved in production.
“This week marks an important moment for JLR and all our stakeholders as we now restart our manufacturing operations following the cyber incident,” noted CEO Adrian Mardell. “From tomorrow, we will welcome back our colleagues at our engine production plant in Wolverhampton, shortly followed by our colleagues making our world-class cars at Nitra and Solihull.”
“Our suppliers are central to our success, and today we are launching a new financing arrangement that will enable us to pay our suppliers early, using the strength of our balance sheet to support their cashflows,” he added. “I would like to thank everyone connected to JLR for their commitment, hard work and endeavour in recent weeks to bring us to this moment. We know there is much more to do but our recovery is firmly underway.”
Business as usual, or really anything close to resembling it, can’t come soon enough. The Q3 financial results make for predictably grim reading; the winding down of Jaguar production and the impact of tariffs were already going to make for a different quarter, before the current chaos. In all, it meant retail sales were down 24.2 per cent year-on-year, at 66,165 units. Even with the Chery Jaguar Land Rover joint venture in China factored in, which takes that total to 85,495, the number is down 17.1 per cent compared to the last quarter.
While the Range Rover, Defender and Range Rover Sport (i.e. the most profitable stuff) still formed the bulk of sales at 76.7 per cent - down a smidge from Q2, but up from 67 per cent at the same time last year - that’s clearly a huge amount fewer cars sold. Retail volumes were down almost a third in the UK (32.2 per cent) compared to the period April to May, which was more than any other market. Clearly, there’s considerable ground to be made up ASAP.
It's not unique to automotive, the number and type of customers I work with and who are totally vulnerable would make your hair stand on end!
Gassing Station | General Gassing | Top of Page | What's New | My Stuff