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Monday, 14 January, 2002, 14:35 GMT
Threat to Land Rover jobs
Land Rover Discovery
The Land Rover Discovery has won awards
Land Rover has confirmed that it may have to suspend production of its best selling Discovery model because of a dispute with one of its suppliers.


It could change the landscape of the West Midlands

Bob Dover, Land Rover chairman
The move could threaten the future of 1,400 workers at the Land Rover plant, and could also put the future of 10,000 jobs among suppliers in doubt.

The dispute is between the Ford subsidiary and receivers who are acting an behalf of an insolvent British engineering group, UPF-Thompson, which is the sole supplier of chassis for the Discovery.

UPF went into liquidation last month, and its receivers KPMG are demanding a 45m payment from Land Rover to secure the future of the engineering firm. But Land Rover are refusing to pay.

Disruption

Land Rover's chairman Bob Dover told BBC Radio 4's Today programme that production of the Discovery could be suspended from the beginning of next month unless a settlement could be reached.

Such a move he said would lead to workers being laid off.

"We will have to lay (workers) off until we could resource and retool this chassis which is of course a huge component and could take several months to do."

"But more than that it could change the landscape of the West Midlands because of all the other suppliers involved in supplying Discovery production."

Engineering firm 'an asset'

Mark Orton, a partner at KPMG and joint administrative receiver for UPF, said he had a duty to obtain the best price for the business, "including treating Land Rover's reliance on UPF as a valuable asset."

"We are also trying to protect the future of the business, and the people who work there," he said.

"Whilst I understand Ford's concern, I hope they will understand our legal duties and therefore take us up on our offer to reach a negotiated settlement."

Serious threat

One analyst said he expected a solution to be found given the importance of Land Rover to its parent company Ford's strategy.

But he warned that the threat should be taken seriously.

"The threat of an end to any UK manufacturing should never be taken lightly, because at current exchange rates it remains an extremely uncompetitive place to be assembling vehicles," Schroder Salomon Smith Barney automotive analyst, John Lawson told BBC News Online.

"It probably doesn't take too much to tip some of these multinationals to withdraw some part of their operation."

 WATCH/LISTEN
 ON THIS STORY
Mark Orton, receiver at UPF Thompson
"We are not acting illegally"
Automotive analyst John Lawson
Threats to UK manufacturing should be taken seriously
See also:

11 Jan 02 | Business
Ford takes job cuts to 35,000
11 Jan 02 | Business
Ford hit by 'perfect storm' of woes
25 Oct 01 | Business
Land Rover recalls Freelanders
02 Aug 01 | Business
Which? finds Land Rover 'hitch'
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