Jaguar yesterday confirmed its long-expected decision to take its X-Type model out of production at the end of the year.
The announcement means the loss of 300 jobs at the company’s Halewood factory on Merseyside – a move described as a “severe blow” by one of the region’s MPs.
Fears have been growing that Halewood, one of three assembly plants operated by Jaguar Land Rover, could close as part of the company’s battle to survive the recession, which is losing its Indian owner, Tata Motors, an estimated £1 million a day.
Instead, Jaguar Land Rover said yesterday that Halewood would suspend production for a further three weeks in September due to continuing weakness in the market.
Loss of the X-Type will leave the plant, which until 1997 produced the high-volume Ford Escort, with just one model, Land Rover’s best-selling Freelander 2.
The site is earmarked as the home of the new Land Rover LRX concept car under the terms of a £27 million Government contribution to the £300 million cost of developing the new generation low-carbon vehicle.
But LRX is unlikely to go into production until 2011, leaving Halewood dangerously exposed.
JLR said it hoped to achieve 300 job losses through voluntary redundancies, and Prime Minister Gordon Brown said employees who face losing their jobs will be helped to find new work.
Mr Brown said he was hopeful the Halewood plant would have a long-term future in the production of green vehicles.
“We ... want to secure a future for Halewood and we have offered JLR a grant of £27 million toward the development of low-carbon Land Rovers at this plant.”
The issue was raised in the Commons by George Howarth (Lab, Knowsley N and Sefton E), who said the news was a “severe blow”.
JLR chief executive David Smith said: “Our industry has been especially badly hit by the recession.
“Jaguar Land Rover’s retail sales fell by 28 per cent in the past ten months. We have taken unprecedented actions to cut costs, including reduced production volumes, significant cuts to investment plans and some 2,200 job losses.
“Ceasing production of the X-Type early, with further redundancies and temporary shutdowns at Halewood, is necessary to protect our other investment plans.”
In contrast, JLR’s two West Midland sites, Jaguar at Castle Bromwich and Land Rover at Solihull, will shut for only two weeks this summer compared with the customary three week break, in order to ramp up production of a clutch of new or revamped models including the new Jaguar XJ.
Automotive industry analyst Howard Wheeldon, senior strategist at broker BGC Partners, said the Government had ten days up to the start of the Parliamentary recess to announce whether it was prepared to help JLR survive the downturn.
The company, which has seen normal credit flows dry up in the banking crisis, denies seeking a “bail-out”, saying it has asked for a loan from the taxpayer at commercial rates, or failing that, a loan guarantee.