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Jaguar Land Rover, Ford to slash jobs

Ben PERRY
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Thousands of jobs will fall by the wayside at Jaguar Land Rover

Thousands of jobs will fall by the wayside at Jaguar Land Rover (AFP Photo/Oli SCARFF )

London (AFP) - Thousands of auto sector jobs are set to go across Europe, Jaguar Land Rover and Ford announced Thursday, under major restructuring as consumers dump diesel cars for greener electric vehicles.

Brexit-facing JLR will axe around 4,500 mostly UK jobs, the Indian-owned carmaker said, after a slump in Chinese sales last year.

US carmaker Ford said it planned a major restructuring of its European operations, including job cuts, to boost profitability.

Reports said the number of Ford positions set to go would be in the thousands. The group employs about 200,000 staff worldwide, around one-quarter of which are in Europe.

"We are taking decisive action to transform the Ford business in Europe," Steven Armstrong, group vice president and president for Europe, Middle East and Africa said in a statement.

The company said that "every Ford nameplate from the all-new Ford Focus onwards will include an electrified option".

Among concrete steps in key markets Ford said it will end production of small automatic transmissions in Bordeaux, France.

In Germany, it plans to end production of the C-Max and Grand C-Max in Saarlouis in response to a shrinking market in Europe for compact multi-purpose vehicles.

In Russia, Ford said it will launch a strategic review of its joint venture Ford Sollers, with several restructuring options on the table.

- JLR cuts 10% of staff -

As for JLR, its move to shed more than 10 percent of its UK workforce is aimed at delivering £2.5 billion ($3.2 billion, 2.8 billion euros) of cost cuts over 18 months, as the group looks to move further into the electric car segment.

"We are taking decisive action to help deliver long-term growth, in the face of multiple geopolitical and regulatory disruptions as well as technology challenges facing the automotive industry," said JLR chief executive Ralf Speth.

He added that "investing in cleaner, smarter, more desirable cars and electrifying... facilities to manufacture a future range of British-built electric vehicles will all form part of building a globally competitive and flourishing company".

JLR suffered a 21-percent drop in Chinese car sales last year, while it has sought to contain any possible Brexit fallout.

"The group is overly dependent on diesel vehicles, and given the crackdown on emissions, petrol cars have become more popular," noted David Madden, analyst at CMC Markets UK.

"The company derives a sizeable portion of its revenue in China -- which is cooling, and that is a factor also."

Industry data this week showed that sales of new UK cars sank 6.8 percent to 2.37 million vehicles last year.

The Society of Motor Manufacturers and Traders blamed weak demand for diesel cars, and said sales of vehicles overall would fall further this year on poor consumer confidence and Brexit.

JLR has moved to ensure it will still have a plant inside the European Union after Britain's planned departure from the bloc on March 29.

In October, JLR opened a 1.4-billion-euro ($1.6-billion) factory in Nitra, Slovakia, its first in continental Europe.

Last July meanwhile, it warned that a "bad" Brexit deal could jeopardise planned investment of more than $100 billion, saying the future was unpredictable if free and frictionless trade with the EU and unrestricted access to its single market was not maintained.

Britain's business minister Greg Clark on Thursday said a no-deal Brexit would be a disaster for Jaguar Land Rover.

Rolls-Royce Motor Cars on Thursday said it had no intention of switching UK production abroad despite growing concerns over the possible impact of a no-deal Brexit on the economy.

BMW-owned Rolls-Royce sold a record-high number of luxury vehicles last year, with purchases soaring worldwide, it also announced.

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