Jaguar Land Rover has put 1,000 workers at one of its UK plants on a three-day work week because of plummeting sales of diesel vehicles and fears over Brexit.
Britain’s biggest carmaker said that workers at the plant outside the city of Birmingham would receive full pay while on the reduced hours. A spokesperson said the change from five days to three would help avoid job cuts and run through Christmas.
“In light of the continuing headwinds impacting the car industry, we are making some temporary adjustments to our production schedules at Castle Bromwich,” the carmaker said in a statement.
Jaguar Land Rover is owned by India’s Tata Motors(TTM).
Sales of diesel vehicles have fallen off a cliff in the United Kingdom, where fears about pollution and a regulatory crackdown following Volkswagen’s(VLKAF) emissions crisis have scared off buyers. Diesel sales dropped over 30% in 2017, according to industry group SMMT.
Car manufacturers, which rely on complex international supply chains, are worried that Brexit will lead to new trade barriers and delays at the borders. Jaguar Land Rover CEO Ralf Speth said last week that supply bottlenecks would cost his company £60 million ($79 million) per day.
“That is a huge risk,” he told Sky News. “We depend on free, frictionless, seamless logistics.”
The Castle Bromwich plant, which has just under 2,000 workers, is small by the standards of today’s auto industry. And it mostly produces saloon cars that have fallen out of fashion.
Bailey fears the plant might not survive a messy Brexit, with production potentially shifting to Slovakia, an EU member. Jaguar Land Rover said in a statement that it was committed to its UK plants.
CNNMoney (London) First published September 17, 2018: 10:57 AM ET