500 manufacturing jobs go at JCB

The company says the move is in response to a rapid decline in orders which has resulted in a 20% reduction in its forecast production schedule for the remainder of this year. The redundancy programme, which JCB said is being undertaken to align overhead costs with the reduced production volumes, will result in the loss of approximately 500 manufacturing positions across JCB factories throughout the UK. A proportional number of staff positions are also expected to be made redundant as part of this programme, although exact details have yet to be finalised. Together, the redundancies are likely to see the UK workforce of 5,700 at the company’s eight Staffordshire factories cut by more than 10%. Commenting on today's announcement, group CEO Matthew Taylor said the company’s products were used mostly in the construction sector, which has been badly affected by the global credit crisis and rising raw material costs. “Many JCB dealers around the world are experiencing lower sales rates because of reduced customer activity, mainly in the house building and commercial property sectors, and this has a direct impact on our machine build programme.” Taylor added: “Some emerging markets, such as Russia, Brazil and the Middle East continue to grow and the agricultural sector remains quite strong, but this is only partially offsetting the impact of the downturn in the construction sector, particularly in more developed markets. These job losses are regrettable but absolutely necessary to ensure that JCB remains competitive and well-positioned to benefit from any market upturn. However, we do not expect to see a recovery until late 2009 at the earliest.” JCB is the world’s third largest manufacturer of construction equipment, with 18 plants around the world: 11 in the UK, three in India, one each in the USA, Germany, Brazil and China. Last year the company sold more 72,000 machines, setting a new record. Turnover also rose to a record £2.25 billion. In 2007, JCB’s share of the world construction equipment market rose to 12 per cent, up from 10.4 per cent in 2006. JCB manufactures more than 300 different products for the construction and agricultural markets. Between December 2005 and December 2007, employment at JCB’s global factories rose from 6,300 to more than 9,000. During the same period, employment at the company’s Staffordshire factories rose from around 3,900 to around 5,700, a 44 per cent increase.