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JLR eyes foreign factory after UK pay row fallout

Car manufacturer is said to be on the hunt for new factory sites in Turkey and Austria following the recent pay disputes in the UK with trade unions

Jaguar Land Rover's Engine Manufacturing Centre at i54
Jaguar Land Rover recently opened its Engine Manufacturing Centre at i54

Jaguar Land Rover is targeting potential new factories in Turkey and Austria as the fallout from acrimonious UK pay talks continues.

The Midlands' most successful manufacturer, which has created thousands of jobs in Solihull and Castle Bromwich in recent years, is said to be favouring Europe over North America and the UK for further expansion.

Highly placed sources said the luxury vehicle maker was now eyeing up lower cost factory developments in Turkey and Austria rather than North America, despite recent reports of plans for a US factory.

JLR bosses are thought to be keen to continue expanding the manufacturing operation as part of the company's determination to take on the likes of bigger rivals such as BMW and Volkswagen.

But the expansion plans are thought to have now switched to continental Europe, partly as a result of lingering ill-feeling towards the unions over last autumn's protracted pay negotiations.

The source said: "Nothing has been decided at this stage and it may take weeks yet before they come to a decision or anything.

"But it is potentially now more likely that they will look at Europe first – Turkey and Austria are possibilities. Costs are very high in the UK and they could go to places where they are much lower and where there is not the same union influence.

"At this stage Europe seems more likely than America. The union pay dispute had a big effect. There is a feeling of alienation that has been left over from the way the pay talks were handled.

"There is still a bad feeling over pay and that could count against the UK getting more investment, which is why they are looking to go abroad. It has set back the case for UK investment.

"They have launched in China, they are launching in Brazil, it looks like there is an international plan. It is likely that Europe is currently ahead of America."

In December, more than 77 per cent of JLR Unite members voted in favour of a two-year pay deal, finally lifting the threat of industrial action after weeks of shopfloor uncertainty.

The ballot of the revised offer saw 9,759 workers vote in favour of the deal, with 2,766 against, a majority of 77.7 per cent.

But the settlement was only achieved when JLR backed down over pensions after unions accused them of planning a £240 million hit on the pension fund to pay for the new deal.

In November, Coventry-based Unite national officer Roger Maddison told the Post before the second ballot: "The company is making a fortune and to try and attack people's pensions is not something they tried when they were losing cash.

"It is no secret that they want to make savings of £240 million on their pensions deficit. I think that they have tried it on and it fell flat.

"We do not want to take action but to protect our pensions and increase our standard of living, we are fully prepared to take action.

"There are people who have worked for 30 years in a car factory, have paid into the pension scheme and they should be able to rely on that pension to fund their retirements."

Jaguar Land Rover has doubled its volumes under the Tata ownership since 2009, selling 462,678 globally in 2014, and executives are keen to continue the sales momentum with new models and job creation programmes.

American newspapers recently reported that Georgia Governor Nathan Deal met JLR exeuctives to discuss a possible US factory while other reports have speculated over plans for a factory in South Carolina producing 200,000 vehicles a year.

A spokesperson for JLR said the firm regularly reviewed opportunities in a range of markets.

She added: "No decision has been taken on future manufacturing locations. We will continue to evaluate opportunities to increase our manufacturing footprint in the future.

"Our new world-class manufacturing facilities will provide additional production capacity supplementing that of our three vehicle manufacturing operations in the UK.

"Manufacturing our vehicles internationally allows us to reach new markets and new customers, creating a stronger, more sustainable and increasingly agile business, safeguarding employment in the UK."


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