Why Jaguar Land Rover's job cuts will do little for its turnaround plans

Why Jaguar Land Rover's job cuts will do little for its turnaround plans Operational expenses have risen faster than staff costs. Wouldn't that be a place to start?

AutoMobile: The UK luxury unit of India’s Tata Motors Ltd. will eliminate 4,500 positions globally as part of a 2.5 billion pound ($3.2 billion) cost-cutting program outlined in November, according to a company announcement Thursday.

The savings will be relatively minor. Workforce reductions are now standard in an industry struggling to deal with rising costs from technology, pricier materials, and U.S. President Donald Trump’s tariffs.

In its release, the company said this was the next phase of a transformation program that started in its fiscal second quarter through September. JLR said its “Charge and Accelerate” initiatives had identified more than 1 billion pounds of improvements and realized 500 million pounds of that in 2018.

In the meantime, though, there’s no sign of an end to the company’s financial and operational woes. December retail sales were dismal again – Jaguar Land Rover sold around 52,000 cars globally, down 6 percent from a year earlier. China sales dropped 42 percent even as luxury peers posted gains.

Free cash flow was negative in the second quarter and executives have said it will stay that way for the year. S&P Global Ratings said in December it expected free operating cash flow to be significantly negative for the next two years, totaling almost 4 billion pounds by March 2020.

In October, the company blamed China for a second-quarter pretax loss of 90 million pounds. It disclosed investment outlays of...read more

→News Source:BS/Business Standard←