Jaguar Land Rover - Opening the door to potential
As part of a wide and eagerly awaited forward business plan the announcement yesterday from Jaguar Land Rover management that by 2014 one of either Castle Bromwich or Solihull-based plants will close as part of the overall production integration process should not really have surprised.
Why? Leaving aside the need to continually adapt and change to industry and macro events I will provide two reasons - firstly that the Halewood plant for which JLR separately announced it would eventually create 800 new jobs to produce the environmentally friendly LRX concept vehicle is already a modern, efficient and very well invested plant with half decent industrial relations.
Secondly and importantly, whilst it is probably fair to say that Castle Bromwich does have some natural limits in terms of structure and with particular regard to future expansion it surely true to say that the industrial relations record at the old 'Meteor Works' plant in Solihull has been far less than spectacular.
Not that the Solihull plant doesn't have some other limitations as well though my guess is that with a little hard work, effort, determination and investment all could be cured here. Speculating on which plant will close is always a dangerous game. In my considered view though the final decision on which plant will eventually close will very much depend on the attitude of workers and trade unions.
Thus before going off on the already promised charge against change those same workers and trade unions - both at Solihull and Castle Bromwich - would do as well to note that even though one plant will close there are no plans for further job losses within the group. Thus this statement of intent by JLR and that is clearly supported by Tata Automotive should be seen by all concerned as progressive - a big step forward to carving out a long term future and growth for the company - a leap forward to what boils down to investment for JLR's future.
Opposing change on this scale in my view is futile. Not only to survive and prosper in home markets but to even begin to lead any new charge in export markets means that JLR needs to adapt and change.
Change of course is a constant phenomenon in any manufacturing process just as it is in product design, marketing and sales. What JLR management are attempting in my view is to push through a completely new approach. It is one that also closes the door on short term thinking taking a giant leap forward on the long term investment approach.
Importantly in doing so and giving its full support Tata's future commitment to JLR surely confirms how wrong Lord Mandelson was to cold shoulder the Indian based company that owns JLR.
Thankfully and to achieve part of the plan that has now formally begun to unfold JLR did finally win ÃÂ£340m loan funding from the European Investment Bank. The rest - the modernisation and investment of the remaining Midland based plant, investment in other new models etc together with remaining necessary manufacturing integration will one assumes be done from its own financial resources.
I have been fortunate enough to meet JLR's senior management and also senior management of both Tata Motors and importantly, Tata Sons. I am impressed with all that I have seen. Importantly and what I would commend to JLR workers most is that within these guys I see commitment, investment and long as opposed to short term thinking. Cash may be king but make no mistake that Tata will back its UK premium product JLR.
Instead of thinking five years think ten, fifteen and even twenty. And if you want proof of what can be done to a company that looks a touch down and out look no further than one of JLR's big competitors in the form of BMW. Easy to forget that just fifty years ago BMW was all but bust. While Daimler Benz was hovering over what looked an interesting prey it took the enterprise and vision of one man - Herbert Quandt to turn BMW from a seeming walking disaster to the great company that it surely is today. Thus I am left to happily conclude that in the case of Jaguar Land Rover if workers and trade unions give the company the necessary level of support that the vision that Ratan Tata had little more than a year ago really will eventually pay off.