Jaguar Land Rover job losses looming

Despite new models this year from Land Rover, JLR still lost £305 million in the last 10 months

Despite signs of ‘Green Shoots’ in the economy, car makers are still suffering. And mainly car makers at the prestige end of the spectrum. Supercar makers are all reporting car sales on the floor still, and it seems only car makers that can supply cars at the budget end, like Ford and Hyundai, are managing to sustain sales to a degree – and keep losses in check.

Jaguar Land Rover have been in financial trouble pretty much since Tata bought them off Ford in 2008. And now Tata has reported losses of some £315 million for the year ending March 2009, which only includes the first ten months of JLR ownership. Of that £315 million, all but £10 million was down to JLR. Ouch.

There is no doubt that the problems at JLR are actually starting to recede, but that is unlikely to stop further cost cutting and even job losses. Both Jaguar and Land Rover have the strongest model line-up in a very long time. There are new versions of the Discovery – Discovery LR4, a new Range Rover Sport and a new Range Rover for 2010, all introduced this year.

And Jaguar is, for the first time in a very long time, getting not just critical acclaim for its car, but real world acclaim – and sales. The Jaguar XF is the best Jaguar since the launch of the original Jaguar XJ in 1968, and the all new Jaguar XJ for 2010 promises to be as good as the XF – and then some.

But however good your products are, if you’re making a loss something has to give. Given more time it seems clear that JLR can pander to the world’s obsession with all things Eco and bring along a range of Hybrid options to its models. But that won’t happen overnight. Tata Vice Chairman – Rava Kant – said:

We have sent people on sabbatical, gone for cheaper low-cost country sourcing and tight control in cash flows, and are assisting JLR (Jaguar Land Rover) for a major belt tightening.

Which doesn’t auger well for the immediate future of JLR. But I’m sure Tata has the resources, and the nous, to see this through, even if painful cuts need to be made in the short term.

Paradoxically, Jaguar Land Rover’s long-term future looks rosier than it has for a very long time.