00:00The UK's biggest carmaker, Jaguar Land Rover, has announced a wave of job cuts as it grapples with tough trading
00:06conditions, U.S. tariffs and the fallout from a cyber attack.
00:10Over the next two years, it will cut its global workforce by about 4,000.
00:14The company, which currently employs 44,000 people, is trying to save around 2.3 billion U.S. dollars.
00:23Daniel Harrison is an automotive analyst from Ultima Media.
00:27Joining us now, Daniel, thanks for your time.
00:29JLR has taken a number of hits.
00:31What do you think has been the worst, the cyber attack, the tariffs, or simply not adapting to a changing
00:36environment?
00:38It's all of the above.
00:40It's very much a sort of death by 1,000 cuts.
00:42I mean, yes, we had the cyber attack in early March this year where production stopped for about four weeks.
00:48And I think the cost just for that stoppage was around $2.5 billion, I believe.
00:53But it's kind of three levels to the problem.
00:55That's a very specific JLR problem.
00:57They've struggled to transition to EVs.
01:00They tried to rebrand, which was somewhat controversial at best.
01:05Then there's more U.K.-specific issues around the fact that we have some of the highest energy costs in the
01:12world, for example, to produce vehicles.
01:14And then, of course, the big macroeconomic issues that Jaguar in particular is very export-led.
01:20So it's really struggled and been impacted by the tariffs that U.S. has imposed.
01:25And it's struggled to maintain its market share and its sales in China, which has been a very strong cash
01:32cow for the company.
01:33So on those three fronts, the companies really struggled.
01:37Yeah.
01:38The government here in the U.K. has ruled out a bailout.
01:41Do you think that's the right call?
01:42Or does Britain risk losing another chunk of its industrial base?
01:48Yes, unfortunately, the long history of sort of laissez-faire, non-interventionist industrial policy in the U.K. is not
01:55a good one.
01:57If you compare the U.S., you know, for example, they bailed out GM and Chrysler during the financial crisis
02:04of 2008.
02:05We know, of course, that China heavily subsidizes its automotive industry, controversially, yes, but it does so on the belief
02:14that it's such an important pellet industry.
02:16And, of course, let's not forget what's called the multiplier effect, that every job loss at the production line level
02:23has an impact of up to 10 jobs.
02:26In the wider supply chain logistics and wider economy.
02:30So this isn't just about the 4,000 jobs.
02:33It's potentially much bigger than that.
02:35And then, of course, if we look at Volkswagen, you know, they've confirmed they're cutting jobs as well.
02:41That's going to be about 100,000 over the next four years.
02:43So is this a sign, the first perhaps real sign, that this whole legacy auto sector is structurally under severe
02:52pressure?
02:54Yes, it's a structural problem.
02:56And the primary structural problem is that the cost base is too high amongst European manufacturers in particular.
03:05Volkswagen in particular has a key problem with high union costs, high wages due to its long history.
03:15But it is a wider structural problem with seeing it for Volkswagen, Stellantis, BMW, all with high energy costs, struggling
03:23with tariffs, struggling to export to their profitable markets in the U.S. and Asia.
03:28But also the growing emerging threat, existential threat of Chinese imports producing much cheaper, much higher quality vehicles, undercutting them
03:41and eating into their market share.
03:44JLR is Tata owned.
03:47What does it say about the health of U.K. manufacturing that its biggest carmaker's fate is effectively decided in
03:54Mumbai, not Westminster?
03:56That is a huge problem and it is the result of years of industrial policy which doesn't support the car
04:05industry in the U.K.
04:06You know, all of the key manufacturing hubs and bases in the U.K. are now foreign owned.
04:12You have Nissan in Sunderland, you have BMW in Oxford, you have Stellantis in Ellesmere Port and, of course, Jaguar
04:21and Land Rover.
04:21And they're all foreign owned now, so as a government we have very little influence and control over them and
04:29that is part of the problem.
04:31You only have the smallest sort of specialist manufacturers that are now producing very low volumes that are British owned
04:37and it is a huge problem that's occurring under governments of all persuasions.
04:42Congratulations.
04:43Ministries of U.K.
