London : Tata Motors-owned Jaguar Land Rover has drafted a new 4.5-billion pounds cost-cutting plan to offset rising emissions cost and the slowdown in China, one of the biggest automotive markets in the world. The project — known as Leap 4.5 — will scrutinise almost every area of spending at Britain’s luxury car manufacturer, ‘The Sunday Times’ reported. The 3-billion-a-year pounds capital budget, focused on research and development and new plants, will be spared.
JLR has one of Britain’s biggest success stories since it was bought over by Tata Motors from Ford in 2008 and made 2.6-billion pounds profit last year, has almost 37,000 staff and builds about 500,000 cars a year. It has spent around 11 billion pounds on a new range of cars, built plants in China and India, with another under way in Brazil, and has overhauled its three British manufacturing plants.
It aims to build one million cars a year by 2020. Sources close to JLR told the newspaper it was a natural time to take stock after such rapid growth and insisted that there were no plans for redundancies.
Sales in China from July to September were down by a third year-on-year to 20,149 cars, against a wider market fall of 1.9%. That drop was offset by strong growth in America and Europe. It also faced a 245-million pounds charge on 5,800 vehicles damaged in the huge explosion at the Chinese port of Tianjin in August. As well as the Chinese problems, JLR faces pressure from regulators to cut its emissions or face hefty fines, ‘The Sunday Times’ said.
It has largely switched from steel to aluminium bodies, which lead to lower fuel consumption, but tougher emissions rules will require costly upgrades to models. Leap 4.5 targets 4.5 billion pounds of cumulative savings by the end of the decade.
It is likely to see more models built on similar core skeletons, greater efficiency in manufacturing, supply chains overhauled and recruitment slowed or halted. The company has repeatedly stressed that it will continue the 3 billion-a-year pounds spending on R&D and new plant and equipment.
JLR is yet to comment or confirm on the reported cost-cutting plans.
Crisis-hit Tata Steel asks suppliers to slash prices
London : Amid a crisis in Britain’s steel sector, Tata Steel has warned its suppliers that if they do not slash prices by up to 30% in the long term, they risk losing the steel giant’s business.
The company’s UK-based Long Products division, which supplies steel beams, railway tracks and other products, has written to its suppliers asking for an immediate 10% price cut which must go up to 30% in the long term.
Last month Tata Steel announced nearly 1,200 job losses at its plants in Scunthorpe and Lanarkshire. Neil Smith, MD of the SME, called the tone “bully boy tactics”. He told the Daily Telegraph: “It feels threatening. The language is contradictory – they talk about valued suppliers then talk about getting rid of us if we do not take a 30 per cent price cut.