Jaguar Land Rover needs a new engine plant to overcome a shortage of supplies from Ford – following an “amazing” success story which has transformed its sales.
Less than two years after JLR had to go cap in hand to the Government seeking cash as it battled to survive, the group is planning to develop its own engine facility as it racks up £1 billion in profits in just 12 months.
Reports this week revealed that JLR was considering potential sites in Wolverhampton, South Wales or India for the factory, which will create 1,000 jobs.
Unite national officer for automotive Roger Maddison revealed the rationale behind the JLR plan.
Mr Maddison, the leading union car industry official in the UK, said: “We are in constant touch with the company, we have heard the rumours, but they have not confirmed anything yet.
“If these rumours are true, then it is fantastic. If they are going to build the engine plant in the UK, it would be for the smaller engine market.
“It will be an addition to the ones they get from Ford and it means that Dagenham and Bridgend would continue to supply engines, and JLR will make the smaller engines themselves.
“Because Jaguar Land Rover have been selling so many cars, they have been going back to Ford saying ‘can we have another 5,000 engines, can we have another 10,000?
“Ford are working flat out at Dagenham and Bridgend. It is well known that Ford are struggling to keep up with engine supplies."
"Meanwhile, the success of Land Rover has been phenomenal and JLR have made themselves a billion pound profit – the success story at Solihull and Halewood is amazing.
"A couple of years ago, they had to go to the Government looking for cash because they were running short.
“Car sales stopped overnight and they were dangerously short of cash through no fault of their own – the way they have come back so quickly is absolutely phenomenal.”
The engine plant supply problem facing JLR emerged as Nick Reilly, chief executive of General Motors in Europe, revealed that a lack of UK part suppliers was currently the most critical issue facing the automotive sector.
He said the lack of a British-based supply chain had forced car makers in the UK such as Nissan and Toyota to import a large number of components, leaving them behind competitors.
Mr Reilly said: “Our biggest issue is lack of suppliers in the UK. If we don’t have a decent amount of local suppliers it makes this place more difficult to be competitive.”
Last summer around 50 Jaguar workers enjoyed a six-week holiday when some parts suppliers to the XF and XJ models were unable to keep up with demand. Extra four-week holidays were offered to workers at Castle Bromwich at 80 per cent pay rates to balance supply and demand.
And just before Christmas Jaguar cut the night shift for XF workers in the run up to the festive season due to “ongoing supply issues” involving engines from Ford.
A spokesman for Jaguar Land Rover said of the engine project: “We have an ambitious plan for growth and there are many matters related to that. But we have no comment beyond that.”
A highly placed source said a decision on the location of the engine plant would be made by JLR in the next eight weeks.
“Tata is moving very fast, there are many new models in the pipeline and developing engines of their own is part of that – the choice will revolve around land considerations and financial incentives, where they can do it cheapest.”