Friday June 26, 07:28 PM
Tata Motors says more Jaguar, Land Rover job cuts possible
By Salil Panchal
MUMBAI (AFP) - India's Tata Motors on Friday warned more jobs could go at its luxury British marques Jaguar and Land Rover because of the global economic downturn, as it posted its first loss in eight years.
The company's first earnings to include Jaguar and Land Rover figures showed a net loss of 25 billion rupees (520 million dollars) in the year to the end of March, compared with a net profit of 21.7 billion rupees in 2007-08.
"At this moment, things are beginning to improve only marginally. There may be more job losses and more shutdowns of plants if required," Tata Motor's vice-chairman Ravi Kant said at a presentation of the company's consolidated full-year results in Mumbai.
He did not go into any specifics about where the job cuts and closures could occur but said the prestige marques were "not an exception" to the effects of the global slowdown.
Total revenue across the company was 709 billion rupees. Out of that, Jaguar and Land Rover accounted for 392 billion rupees.
In May the company posted standalone net profit for 2008-09 of 10 billion rupees, still down more than 50 percent from the previous year.
Jaguar Land Rover global sales for the 10 months ending March this year fell by almost a third to 167,000 vehicles from 246,000 the previous year.
"In 2008... Land Rover sales fell considerably. However, Jaguar was able to maintain the sales level primarily on the back of a very strong consumer response to the newly-launched XF sedan," the company said in a statement.
In terms of the loss, the statement said that it had "actively responded to this changed situation by taking a number of urgent and long-term measures.
"These include cutting costs drastically and working on a plan of substantial cost reduction, aligning production with demand and tight control over cash flows," it said.
Tata Motors completed its 2.3-billion-dollar acquisition of Jaguar and Land Rover from the Ford Motor Co. in June last year. The ailing US carmaker sold the brands to focus on turning around its north American operations.
Some 2,000 people have been laid off at Jaguar and Land Rover in recent years, with plants shut down and sabbaticals given to staff.
British unions have been pushing for more government support for Jaguar Land Rover, which employs about 15,000 people in the country, as the global economic downturn puts the brakes on car sales and demand.
"Things have improved in some parts of the world and green shoots are appearing in some markets. We are aiming to reduce the period to break even," Kant told reporters.
For the group as a whole, the medium- to long-term should be "good", he added.
Auto sector analyst Mahantesh Sabarad, from Mumbai-based Centrum Broking, agreed with the outlook but added: "The worst appears to be behind them (Tata Motors) but the Tatas will have to look at improving operations through cost-reductions."
Tata Motors launched the world's cheapest car, the Nano, at just 100,000 rupees earlier this year.
Jaguar and Land Rover vehicles are expected to be sold on the Indian market from next week.
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
