Page last updated at 13:08 GMT, Thursday, 24 September 2009 14:08 UK

Jaguar to shut one Midlands plant

Worker: "We've seen them come and we've seen them go before"

Jaguar Land Rover has said it will close one of its West Midlands plants by the middle of the next decade.

The firm is considering the closure of either its Castle Bromwich plant in Birmingham or its factory in Solihull.

About 800 new jobs will be created at its Halewood plant on Merseyside, which will start building a new Range Rover.

The company, which is owned by Indian giant Tata, said there would be no net job losses, but unions said they would oppose the plans.

"We are now in a meeting with the company to hear details of their plans," said Bert Hill, regional officer at the GMB union.

Jorn Madslien
By Jorn Madslien, Business reporter, BBC News

Jaguar Land Rover's plan to close one of its three factories is part of a cost-cutting exercise that was already underway, though it was made more urgent by plunging sales during the recession.

But rather than being another step towards total collapse, the factory closure will be accompanied by investment to make the remaining two factories more efficient and to ensure future models are lighter and more efficient, with reduced carbon emissions.

Exactly how much Jaguar's new owner Tata is prepared to invest remains a secret, however, though it is clear that much is needed to ensure the two British marques have a viable future.

"The GMB will be opposing everything we have heard so far. We will fight the company on this - of that I have no doubt," he added.

Jaguar Land Rover did say that there would be "natural wastage" of staff or transfers from one site to the other.

Increasing competitiveness

The firm said the new Range Rover model planned for Halewood, the LRX Concept, would be "the smallest, lightest and most efficient vehicle the company has ever produced".

BBC chief economics correspondent Hugh Pym said Jaguar Land Rover was seeking to consolidate its operations in the West Midlands.

Jaguar Land Rover
Tata bought Jaguar Land Rover from Ford in 2008

One of the reasons for consolidating on the one site is because the firm wants to build a new production line for lightweight vehicles and it makes more sense to do that in one plant, rather than two, he said.

Jaguar Land Rover currently employs about 5,000 workers in Solihull, 2,000 in Castle Bromwich and 1,800 at Halewood.

The carmaker will decide in the next 12 to 18 months which plant it will close.

It said the plan was designed to increase the firm's competitiveness, drive growth and sustain profitability.

Commitment welcomed

"This is a plan that recognises the impact the economic collapse has had on our business, and at the same time the opportunities that lie ahead for these two great brands," said chief executive David Smith.

Business Secretary Lord Mandelson said he welcomed "the commitment that Tata is showing in the highly-skilled workforce employed by Jaguar Land Rover in the West Midlands and Merseyside, as well as the top-class models it produces".

Last month, Tata announced that it had secured private funding for Jaguar Land Rover and would not need government support.

It had previously spent months negotiating with the British government for state funding, but the two sides failed to agree terms.

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