Workers' Weekly On-Line
Volume 50 Number 25, July 4, 2020 ARCHIVE HOME JBCENTRE SUBSCRIBE

Workers' Forum

Defending the Rights and Interests of Jaguar Land Rover Workers

The future of Jaguar is under threat, it is reported. India-based parent company Tata Motors is considering the future of its so-called loss-making subsidiary, Jaguar Land Rover (JLR). It is suspected that Tata will make announcements this month [1].

This is the latest development in what the company described last year as "difficult times". Eighteen months ago, in January 2019, JLR announced the loss of 4,500 jobs, mainly from its British workforce which then stood at 40,000, to take place over a period of two years. This itself came on the back of cuts in agency staff of over 1,000 in 2017.

The problems leading to a reported "loss" at that time were cited as collapsing demand, especially for diesel cars, and particularly in the key markets of China and India, and uncertainty over Brexit.

Also at that time, plans were being carried out to transfer production of the Land Rover Discovery to Slovakia, with unions demanding to know whether JLR was permanently scaling back production in Britain.

Reports began to surface that Tata was considering selling the business. Yet in March that year, it was reported that the company was planning major investment in Britain. The economic situation in China was talked up as JLR stepped up attempts to improve relations with its Chinese dealer network.

Nevertheless, despite this upbeat news, JLR shut down production for a week in April citing Brexit uncertainty.

In mid-October, Tata went on record to say that it would not be selling JLR, though it did say "partnerships" would not be ruled out. Early November was also set aside for another JLR shutdown.

On October 25, JLR posted a profit before tax of £156 million for July to September 2019. Revenue was 8% higher at £6.1 billion, due in part to improved sales in China. Three months on, and these figures had risen to a profit of £318 million and revenue of £6.4 billion for October to December.

However, by the beginning of this year, with the coronavirus pandemic impacting the Chinese market, sales of Jaguar cars fell 42% from January to March. Land Rover sales fell 25% over the same quarter. Total sales for the 2019-2020 financial year were down 12% at just over 5 million vehicles on the previous year. The net result of all this was that in the financial year ending on March 31 this year, JLR reported pre-tax losses of £422 million, after reporting losses of £3.6 billion the previous year.

JLR began to resume production in Britain from May 18 as the Covid-19 partial lockdown began to be relaxed; its plants had been closed since the end of March, beginning with its sites in Solihull and Wolverhampton.

A week later, at a time when 18,000 (approximately half) of its British workforce remained furloughed, it transpired that the business had been in talks for a number of weeks with the government in an attempt to obtain a loan speculated to be up to £2 billion (a figure disputed by the company). The Covid Corporate Financing Facility provided jointly by the Treasury and the Bank of England is only provided to companies with an investment grade as determined by the powerful credit rating agencies. JLR is currently rated significantly below this level (B by Standard and Poor's, B+ by Fitch) at what is known as "highly speculative" grade (aka "junk" rating).

By the middle of June, it was reported that Tata is deciding what to do with JLR, with an announcement expected this month.

At the same time, JLR announced the loss of 1,100 agency jobs.

Commenting on this situation, Unite national officer Des Quinn said: "This is a painful blow for a loyal workforce. Given the unprecedented drop in demand due to the Covid-19 pandemic it was all but inevitable that job losses would be announced. It is another devastating blow for our auto sector and the communities that rely on them for jobs."

"We urge the government to get on with delivering the urgently needed sector support package, as other countries such as France and Germany have done, so that we can stem the tide of redundancies," he said.

Speculations are rife over whether JLR will switch to become all-electric, who might be a potential buyer, or whether Jaguar might continue on a much smaller scale, serving a niche market. If the company were sold, it would not be for the first time. Jaguar, for example, has changed hands various times since its inception, having passed from its original private owners to the state under British Leyland, and then to privatisation as Jaguar Cars. Ford acquired Jaguar in 1989 and Land Rover from BMW in 2000. Tata has owned Jaguar Land Rover since 2008, purchasing the firm from Ford. Owners come and go but the workers who are the car producers remain.

The past year has shown that "profit" one month turns into "loss" the next and vice-versa. Speculation exists as decision-makers and commentators alike have no idea how things will pan out. Through all this, the workers have been transferring old value and creating new value into billions of pounds-worth of social product. How come that JLR is designated "sub-grade", "junk", a problem to be got rid of? Is it a result of the short-sighted, narrow perspective of competing private interests that are incapable of seeing the whole? Or might it be that sections of the financial oligarchy are positioning themselves to make a killing?

JLR is a component of the entire automotive sector, itself part of the socialised economy. As the Society of Motor Manufacturers and Traders (SMMT), the prime spokespeople for the industry, tell us:

"The UK automotive industry is a vital part of the UK economy worth more than £82 billion turnover and adding £18.6 billion value to the UK economy. With some 168,000 people employed directly in manufacturing and in excess of 823,000 across the wider automotive industry, it accounts for 14.4% of total UK export of goods, worth £44 billion, and invests £3.75 billion each year in automotive R&D. More than 30 manufacturers build in excess of 70 models of vehicle in the UK supported by 2,500 component providers and some of the world's most skilled engineers. Over 1.3 million cars, 78,270 commercial vehicles and 2.5 million engines were built in the UK in 2019." [2]

In this whole sector, the £18.6 billion quoted above is an estimate of the new value the workers produced and was realised in sales last year. New value is claimed by workers, for example as wages, and to the owners of capital as debt and equity payments. The other major claim is made by the government as tax, much of which is also put to the service of the owners of capital.

The narrow perspective of the "bottom line profit and loss" ignores all claimants apart from the owners of the company's equity. This is balanced on such a knife-edge that it is subject to all of the fluctuations of the market. The claims of the workers, the very source of this new value, is denigrated and branded a cost to be cut. Likewise, the use of the value by the government for social programmes is viewed as a cost to be cut with no sense of social responsibility. The state of mutual competition means the claims of other sections of capital are also viewed as costs, even when the ownership of companies and their debt and equity is itself a highly interconnected matter amongst the capitalist class.

It is also the case that, during the pandemic lockdown, car manufacturing output fell -95.4% in May with a mere 5,314 vehicles rolling off production lines [3]. JLR, which is a major component of the sector, cannot be seen in isolation.

Tata had tried to create a passive atmosphere about its plans during the pandemic. Like other large manufacturers in the car industry it has tried to blame other factors to coerce the workers into productivity measures, job cuts and accept some closing of capacity. To slash costs and shorten development times usually means labour as well as machinery and plant through cuts or re-deployment.

One moment, the outlook is optimistic; then the wind changes and JLR is presented as a sinking ship. At some point, all could be abandoned due to the company's self-interested logic. The ship could be allowed to sink with all on board except those who have abandoned it, if in their view it is deemed worthless. All is confusion.

Workers cannot accept that the solution, as they are being told, is that they themselves have to pull out all the stops to work flexibly to get costs down and increase productivity. The fact is that the oligarchs who own these industries have no responsibility for the fate of the economy, for its needs and its direction, nor for the workers, their livelihoods or their communities.

There is a necessity for change, a different direction for the economy, for limiting the power of the monopolies to impose their will and their dictate. The workers themselves need the decisive say in decision-making. The question poses itself as to how to counter the anti-social control exercised by those who are using the lockdown to try and pacify the workers and block their resistance. This is a crucial question facing the Jaguar Land Rover workers and the working class as a whole as they develop their organised momentum to assert their rights and interests.


[1] Neil Winton, "Jaguar Future at Risk as Owner Tata Motors Ponders JLR Recovery Plan", Forbes, Jun 28, 2020

[2] SMMT, "Industry Topics: UK Automotive"

[3] SMMT, "UK car production falls -37.6% in March as coronavirus halts automotive manufacturing", April 30, 2020


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