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| Ford and JLR to cut thousands of jobs; John Lewis bonus at risk - business live | |
| (35 minutes later) | |
| BREAKING: Jaguar Land Rover have confirmed that they, like Ford, are cutting jobs...and the axe will fall heavily on the UK. | |
| JLR plans to cut around 4,500 roles around the globe, as part of a major cost-cutting programme designed to save £2.5bn. | |
| JLR says it is responding to “multiple” geopolitical and regulatory disruptions (eg China’s slowing economy), and to the technology changes facing the sector (such as the move to electric and self-driving cars). | |
| Chief executive Ralf Speth says: | |
| “We are taking decisive action to help deliver long-term growth in the face of multiple geopolitical and regulatory disruptions as well as technology challenges facing the automotive industry.” | |
| JLR, which employs about 40,000 people in Britain, has also announced a new battery assembly centre at Hams Hall near Birmingham, and will begin producing electric drive units at its Wolverhampton engine plant. | |
| The looming job cuts at Jaguar Land Rover have been raised over at parliament. | The looming job cuts at Jaguar Land Rover have been raised over at parliament. |
| Theresa May’s spokesman has told reporters that JLR sees the UK as “home”, and is committed to the country, saying: | Theresa May’s spokesman has told reporters that JLR sees the UK as “home”, and is committed to the country, saying: |
| “JLR have been very clear that they regard the UK as home and are investing in the future to develop the next generation of vehicles. | “JLR have been very clear that they regard the UK as home and are investing in the future to develop the next generation of vehicles. |
| We will continue to work closely with the company to support their long-term plans. | We will continue to work closely with the company to support their long-term plans. |
| That doesn’t rule out some layoffs, though.... | That doesn’t rule out some layoffs, though.... |
| Ford has also warned that the European market is tough - persistently so - meaning sweeping changes are needed. | Ford has also warned that the European market is tough - persistently so - meaning sweeping changes are needed. |
| The FT’s Peter Campbell has the details: | The FT’s Peter Campbell has the details: |
| Armstrong on European market: We're seeing softening in some markets, like the UK, it's tough from a competitiveness position. That's why we need to think about how we're going to compete in the future. | Armstrong on European market: We're seeing softening in some markets, like the UK, it's tough from a competitiveness position. That's why we need to think about how we're going to compete in the future. |
| Steve: "Ford of Europe has never really been sustainably profitable. This was not a one-time policy. We can only allocate capital to places we're going to get a return." | Steve: "Ford of Europe has never really been sustainably profitable. This was not a one-time policy. We can only allocate capital to places we're going to get a return." |
| Armstrong says likely to have specifics of cuts around second quarter/into the middle of the year. | Armstrong says likely to have specifics of cuts around second quarter/into the middle of the year. |
| Ford is holding a conference call with journalists now. | Ford is holding a conference call with journalists now. |
| On it, European chief Steven Armstrong has warned that further job cuts might be needed if Britain crashes out of the EU without a deal. | On it, European chief Steven Armstrong has warned that further job cuts might be needed if Britain crashes out of the EU without a deal. |
| First Q - "I have ask...does Brexit colour your view of the UK operation?"Armstrong: "If we get wrong result, then expect that results will be significantly more dramatic. This is fix the base business." | First Q - "I have ask...does Brexit colour your view of the UK operation?"Armstrong: "If we get wrong result, then expect that results will be significantly more dramatic. This is fix the base business." |
| 👆🚨🚨 THIS IS SIGNIFICANT 🚨🚨 | 👆🚨🚨 THIS IS SIGNIFICANT 🚨🚨 |
| Economist Andrew Sentance says the job cuts at Ford and JLR are part of a broader trend towards automation: | Economist Andrew Sentance says the job cuts at Ford and JLR are part of a broader trend towards automation: |
| Latest wave of job cuts in manufacturing (Ford, JLR) is no great surprise. Manufacturing jobs will continue to decline as automation (robots) take over and 90pc jobs will be in services industries by 2030. Ford to cut thousands of jobs in turnaround plan https://t.co/BCAknVNPQf | Latest wave of job cuts in manufacturing (Ford, JLR) is no great surprise. Manufacturing jobs will continue to decline as automation (robots) take over and 90pc jobs will be in services industries by 2030. Ford to cut thousands of jobs in turnaround plan https://t.co/BCAknVNPQf |
| In other blow to Europe’s auto sector, Jaguar Land Rover is set to announce heavy job losses too. | In other blow to Europe’s auto sector, Jaguar Land Rover is set to announce heavy job losses too. |
| A source familiar with the plans has told us the redundancies were likely to affect “white-collar” workers the most, with the majority of UK job reductions achieved via voluntary redundancies. | A source familiar with the plans has told us the redundancies were likely to affect “white-collar” workers the most, with the majority of UK job reductions achieved via voluntary redundancies. |
| Jaguar Land Rover and Ford to axe thousands of jobs | Jaguar Land Rover and Ford to axe thousands of jobs |
| Here are more details of Ford’s cost-cutting plans -- including likely job losses in the UK: | Here are more details of Ford’s cost-cutting plans -- including likely job losses in the UK: |
| Production at the Ford Aquitaine Industries plant in Bordeaux, France, which manufactures small automatic transmissions, will end in August 2019. | Production at the Ford Aquitaine Industries plant in Bordeaux, France, which manufactures small automatic transmissions, will end in August 2019. |
| Formal discussions have begun between Ford and its Works Council to end production of the C-MAX and Grand C-MAX at the Saarlouis Body and Assembly Plant in Germany as the compact MPV segment shrinks in Europe. | Formal discussions have begun between Ford and its Works Council to end production of the C-MAX and Grand C-MAX at the Saarlouis Body and Assembly Plant in Germany as the compact MPV segment shrinks in Europe. |
| Ford is undertaking a strategic review of Ford Sollers, its joint venture in Russia. Several significant restructuring options for Ford Sollers are being considered by Ford and its partner, Sollers PJSC. A decision is expected in the second quarter. | Ford is undertaking a strategic review of Ford Sollers, its joint venture in Russia. Several significant restructuring options for Ford Sollers are being considered by Ford and its partner, Sollers PJSC. A decision is expected in the second quarter. |
| Ford plans to consolidate its UK headquarters and Ford Credit Europe’s headquarters at the Ford Dunton Technical Center in South East Essex to improve business fitness and create a customer-centric technical hub. The action is subject to union consultation and local approvals. | Ford plans to consolidate its UK headquarters and Ford Credit Europe’s headquarters at the Ford Dunton Technical Center in South East Essex to improve business fitness and create a customer-centric technical hub. The action is subject to union consultation and local approvals. |
| It’s official.... | It’s official.... |
| We are taking decisive action to make #Ford sustainably profitable in Europe, working collectively with all stakeholders to deliver a more focused line-up of European-built passenger vehicles, while growing our import and commercial vehicle businesses. https://t.co/39tgKKt8gs | We are taking decisive action to make #Ford sustainably profitable in Europe, working collectively with all stakeholders to deliver a more focused line-up of European-built passenger vehicles, while growing our import and commercial vehicle businesses. https://t.co/39tgKKt8gs |
| There’s a serious danger that Ford could close some of its European car factories. | There’s a serious danger that Ford could close some of its European car factories. |
| Steven Armstrong, Ford’s head of Europe, has told Bloomberg: | Steven Armstrong, Ford’s head of Europe, has told Bloomberg: |
| “We are looking to make a step-change in the performance of the business. | “We are looking to make a step-change in the performance of the business. |
| “There’ll be significant impact across the region. We will be looking at all options.” | “There’ll be significant impact across the region. We will be looking at all options.” |
| Breaking news: carmaker Ford is slashing thousands of jobs across Europe. | Breaking news: carmaker Ford is slashing thousands of jobs across Europe. |
| The carmaker has just announced the job cuts, as part of a new strategic plan that will see it quit unprofitable markets and ditch loss-making vehicle lines. | The carmaker has just announced the job cuts, as part of a new strategic plan that will see it quit unprofitable markets and ditch loss-making vehicle lines. |
| Steven Armstrong, Group Vice President,Europe, Middle East and Africa, says. | Steven Armstrong, Group Vice President,Europe, Middle East and Africa, says. |
| “We are taking decisive action to transform the Ford business in Europe,” | “We are taking decisive action to transform the Ford business in Europe,” |
| Under the plan, Ford plans to combine the headquarters of Ford U.K. and Ford Credit to a site in Dunton, Essex. | Under the plan, Ford plans to combine the headquarters of Ford U.K. and Ford Credit to a site in Dunton, Essex. |
| It is also intending to exit the multivan segment, stop manufacturing automatic transmissions in Bordeaux in August, and review its operations in Russia. | It is also intending to exit the multivan segment, stop manufacturing automatic transmissions in Bordeaux in August, and review its operations in Russia. |
| Ford expects to lose “thousands of staff” under the plan, and will aim for voluntary redundancies where possible. | Ford expects to lose “thousands of staff” under the plan, and will aim for voluntary redundancies where possible. |
| It currently employing some 54,000 workers across Europe, mainly in Germany, the U.K. and Spain. | It currently employing some 54,000 workers across Europe, mainly in Germany, the U.K. and Spain. |
| There are some encouraging signs in John Lewis’s statement, despite the damage to profits this year. | There are some encouraging signs in John Lewis’s statement, despite the damage to profits this year. |
| Its department stores (John Lewis & Partners) grew like-for-like sales by 1% over the Christmas period, with fashion sales up 6.8%, beauty products up 11.2%, and own-brand womenswear up 14.7%. | Its department stores (John Lewis & Partners) grew like-for-like sales by 1% over the Christmas period, with fashion sales up 6.8%, beauty products up 11.2%, and own-brand womenswear up 14.7%. |
| However, the “intensively competitive pricing environment” meant profit margins were squeezed. | However, the “intensively competitive pricing environment” meant profit margins were squeezed. |
| John Lewis’s ‘never knowingly undersold’ pledge means it has to match rivals’ price cuts.... | John Lewis’s ‘never knowingly undersold’ pledge means it has to match rivals’ price cuts.... |
| The group also hopes to grow Waitrose & Partners’ profits for the full year, after its vegetarian food ranges and domestic wine proved popular with shoppers. | The group also hopes to grow Waitrose & Partners’ profits for the full year, after its vegetarian food ranges and domestic wine proved popular with shoppers. |
| Here’s some Waitrose highlights from the festive period: | Here’s some Waitrose highlights from the festive period: |
| Increased own brand and exclusive festive products, launching over 500 new and improved Waitrose & Partners lines. These included the new Honeycomb Bubble Dessert. | Increased own brand and exclusive festive products, launching over 500 new and improved Waitrose & Partners lines. These included the new Honeycomb Bubble Dessert. |
| A total of 25 new vegan and vegetarian products, such as Jackfruit Tacos were launched in the lead up to Christmas - helping drive a 94.3% increase in sales of vegetarian meals. | A total of 25 new vegan and vegetarian products, such as Jackfruit Tacos were launched in the lead up to Christmas - helping drive a 94.3% increase in sales of vegetarian meals. |
| English and Welsh wine continued its strong performance with sales growth of 21.4%. | English and Welsh wine continued its strong performance with sales growth of 21.4%. |
| Free From products and dairy alternatives saw a rapid rise in sales - up 12.2% and 40.9% respective | Free From products and dairy alternatives saw a rapid rise in sales - up 12.2% and 40.9% respective |
| The statement is online here. | The statement is online here. |
| Debenhams has insisted it will deliver profits in line with expectations, despite a worse than expected fall in sales over Christmas (see 8am). | Debenhams has insisted it will deliver profits in line with expectations, despite a worse than expected fall in sales over Christmas (see 8am). |
| How? By delivering £30m more in cost savings. | How? By delivering £30m more in cost savings. |
| My colleague Sarah Butler explains: | My colleague Sarah Butler explains: |
| The struggling department store said it now expected to make total annual savings of £80m with new measures including a hiring freeze at head office and the earlier than expected closure of its Lodge Farm distribution centre in Northamptonshire. | The struggling department store said it now expected to make total annual savings of £80m with new measures including a hiring freeze at head office and the earlier than expected closure of its Lodge Farm distribution centre in Northamptonshire. |
| Sales at established UK stores dived 6.2% in the 18 weeks to 5 January when overseas sales fell by 3.5% but online sales rose by 4.6%. The group fall of 5.7% was much worse than the 2% to 3% expected by analysts. | Sales at established UK stores dived 6.2% in the 18 weeks to 5 January when overseas sales fell by 3.5% but online sales rose by 4.6%. The group fall of 5.7% was much worse than the 2% to 3% expected by analysts. |
| Debenhams said it had begun “constructive discussions” with lenders about refinancing but had put on hold attempts to sell assets including its Danish Magasin du Nord chain as it did not think the “value of the assets were being recognised.” | Debenhams said it had begun “constructive discussions” with lenders about refinancing but had put on hold attempts to sell assets including its Danish Magasin du Nord chain as it did not think the “value of the assets were being recognised.” |
| It said it was in talks with all stakeholders, including major shareholder Mike Ashley’s Sports Direct about its future but would not confirm if it was discussing taking up Ashley’s offer of a loan. | It said it was in talks with all stakeholders, including major shareholder Mike Ashley’s Sports Direct about its future but would not confirm if it was discussing taking up Ashley’s offer of a loan. |
| Debenhams said it had spoken to landlords about plans to close up to 50 stores and did not rule out the possibility of instigating a company voluntary arrangement which would allow it to agree a mass closure of stores under an insolvency procedure. | Debenhams said it had spoken to landlords about plans to close up to 50 stores and did not rule out the possibility of instigating a company voluntary arrangement which would allow it to agree a mass closure of stores under an insolvency procedure. |
| Christmas sales at both Debenhams and Marks and Spencer were dismal but note that their full-year profit guidance is unchanged (for now). Retailers have to shift stock, they also have to make money. | Christmas sales at both Debenhams and Marks and Spencer were dismal but note that their full-year profit guidance is unchanged (for now). Retailers have to shift stock, they also have to make money. |
| More early reaction to this morning’s blizzard of retail news: | More early reaction to this morning’s blizzard of retail news: |
| Debenhams like-for-like sales drop of 3.6pc is actually below analyst forecasts but escapes profit warning after identifying "additional" cost saving opportunities. Although it's put sale of Magazin du Nord on hold as it explores bringing "new sources of funding into business" | Debenhams like-for-like sales drop of 3.6pc is actually below analyst forecasts but escapes profit warning after identifying "additional" cost saving opportunities. Although it's put sale of Magazin du Nord on hold as it explores bringing "new sources of funding into business" |
| It hasn’t been Armageddon on high street at Christmas, as some feared. But this is v symbolic & proof as to how tough life is for many shops. The last time John Lewis didn’t pay a staff bonus was 1950s - during rationing https://t.co/KRKVWXw3Qk | It hasn’t been Armageddon on high street at Christmas, as some feared. But this is v symbolic & proof as to how tough life is for many shops. The last time John Lewis didn’t pay a staff bonus was 1950s - during rationing https://t.co/KRKVWXw3Qk |
| Simon Underwood, business recovery partner at accountancy firm, Menzies LLP, says John Lewis’s results are disappointing. | Simon Underwood, business recovery partner at accountancy firm, Menzies LLP, says John Lewis’s results are disappointing. |
| “Despite modest growth in like-for-like sales - 1.4% - the retailer has said that it is expecting to report a fall in profits – clear evidence that depressed footfall and falling consumer confidence has led to some cut-throat discounting and promotional activity. | “Despite modest growth in like-for-like sales - 1.4% - the retailer has said that it is expecting to report a fall in profits – clear evidence that depressed footfall and falling consumer confidence has led to some cut-throat discounting and promotional activity. |
| “At a time when many other retailers have been forced to downgrade their full-year profits, John Lewis had seemed immune to the problems facing the High Street. If monthly trading performances resume the erratic pattern seen during the last few months of 2018, things could change rapidly, and staff bonuses could be hit. | “At a time when many other retailers have been forced to downgrade their full-year profits, John Lewis had seemed immune to the problems facing the High Street. If monthly trading performances resume the erratic pattern seen during the last few months of 2018, things could change rapidly, and staff bonuses could be hit. |
| Looks as if the retail bounce might be over...Marks & Spencer and Debenhams reported a drop in sales in the run up to Christmas and are trading down this morning, but Halfords are getting hammered, currently down -22.76%.#Retail #Reporting pic.twitter.com/APakYNH8sB | Looks as if the retail bounce might be over...Marks & Spencer and Debenhams reported a drop in sales in the run up to Christmas and are trading down this morning, but Halfords are getting hammered, currently down -22.76%.#Retail #Reporting pic.twitter.com/APakYNH8sB |
| Here’s our full story on John Lewis: | Here’s our full story on John Lewis: |
| John Lewis may suspend staff bonus as retail slump bites | John Lewis may suspend staff bonus as retail slump bites |
| Marks & Spencer’s shares have fallen by over 1% in early trading, after it reported that food, clothing and homeware sales fell in the last quarter. | Marks & Spencer’s shares have fallen by over 1% in early trading, after it reported that food, clothing and homeware sales fell in the last quarter. |
| Richard Lim, chief executive at Retail Economics, says M&S has done worse than expected, as it struggles to cope with the seismic changes in the retail sector. | Richard Lim, chief executive at Retail Economics, says M&S has done worse than expected, as it struggles to cope with the seismic changes in the retail sector. |
| It’s increasingly evident that Christmas is becoming an online event and these figures reaffirm the polarisation of shopping habits with online propping up the poor performance of their store sales. | It’s increasingly evident that Christmas is becoming an online event and these figures reaffirm the polarisation of shopping habits with online propping up the poor performance of their store sales. |
| This accelerating trend has benefitted the retailers that have the scale, capacity and seamless online operations to cope with the peak in demand over Christmas and M&S is struggling to keep up. | This accelerating trend has benefitted the retailers that have the scale, capacity and seamless online operations to cope with the peak in demand over Christmas and M&S is struggling to keep up. |
| “Put simply, the retailer is burdened with too many stores, unsuitable space and the spiralling operating costs associated with this outdated business model. As a higher proportion of sales move online, the cost of fulfilling these orders are rising too. Set against the backdrop of fragile consumer confidence, it’s a difficult place to be. | “Put simply, the retailer is burdened with too many stores, unsuitable space and the spiralling operating costs associated with this outdated business model. As a higher proportion of sales move online, the cost of fulfilling these orders are rising too. Set against the backdrop of fragile consumer confidence, it’s a difficult place to be. |
| Tesco shares are leading the FTSE 100 risers, up 1.9% at 216p. | Tesco shares are leading the FTSE 100 risers, up 1.9% at 216p. |
| Analysts are cheering its financial results (which includes a 2.2% jump in Tesco’s UK sales over Christmas.). | Analysts are cheering its financial results (which includes a 2.2% jump in Tesco’s UK sales over Christmas.). |
| ...so we've had profit warnings from Halfords and John Lewis and bad figures from M&S this morning. But Tesco is doing quite well: says the 2.2% growth in UK like-for-like sales over Christmas is the best in nearly a decade | ...so we've had profit warnings from Halfords and John Lewis and bad figures from M&S this morning. But Tesco is doing quite well: says the 2.2% growth in UK like-for-like sales over Christmas is the best in nearly a decade |
| Richard Hunter, head of markets at interactive investor, says Tesco’s recent acquisition of wholesale group Booker is paying off. | Richard Hunter, head of markets at interactive investor, says Tesco’s recent acquisition of wholesale group Booker is paying off. |
| “Tesco has defied the retail gloom and delivered a pick of the bunch performance. | “Tesco has defied the retail gloom and delivered a pick of the bunch performance. |
| The supermarket behemoth has staged a strong recovery over several years, having previously admitted that it had taken its eye off the ball in its core UK market. There is a fair amount of light between then and now, with like-for-like sales both in terms of the third quarter but also the Christmas period showing continuing growth. The Booker acquisition is fast becoming a strategic triumph, with quarterly like-for-like sales having grown 11% and almost 7% in the festive run-up. | The supermarket behemoth has staged a strong recovery over several years, having previously admitted that it had taken its eye off the ball in its core UK market. There is a fair amount of light between then and now, with like-for-like sales both in terms of the third quarter but also the Christmas period showing continuing growth. The Booker acquisition is fast becoming a strategic triumph, with quarterly like-for-like sales having grown 11% and almost 7% in the festive run-up. |
| Tesco are standing out as the only retail winner this morning, while M&S, John Lewis, Debenhams and Halfords have all struggled. | Tesco are standing out as the only retail winner this morning, while M&S, John Lewis, Debenhams and Halfords have all struggled. |
| Busy morning. Tesco Xmas sales up, better than expected. Firmly in the winners camp. M&S food, clothing and home sales down. Boss says numbers are where they expected to be as they transform the business. Debenhams figs are worst today - UK sales down 6.2% for 18 wk period | Busy morning. Tesco Xmas sales up, better than expected. Firmly in the winners camp. M&S food, clothing and home sales down. Boss says numbers are where they expected to be as they transform the business. Debenhams figs are worst today - UK sales down 6.2% for 18 wk period |
| Profit warnings from John Lewis and Halfords, M&S clothing and food sales fall, as the retail death rattle continues | Profit warnings from John Lewis and Halfords, M&S clothing and food sales fall, as the retail death rattle continues |