JCB, the world’s third largest manufacturer of construction equipment, is to layoff around 500 manufacturing jobs in its factories across the UK.
The redundancy programme is being undertaken in response to a rapid decline in orders which has resulted in a 20 per cent reduction in JCB’s forecast production schedule for the remainder of this year.
A proportional number of staff positions are also expected to be made redundant as part of the programme, although exact details have yet to be finalised.
‘Our products are used mostly in the construction sector, which has been badly affected by the global credit crisis and rising raw material costs. Many JCB dealers around the world are experiencing lower sales rates because of reduced customer activity, mainly in the house building and commercial property sectors, and this has a direct impact on our machine build programme,’ said Matthew Taylor, JCB’s group chief executive officer.
‘Some emerging markets, such as Russia, Brazil and the Middle East continue to grow and the agricultural sector remains quite strong, but this is only partially offsetting the impact of the downturn in the construction sector, particularly in more developed markets. These job losses are regrettable but absolutely necessary to ensure that JCB remains competitive and well-positioned to benefit from any market upturn. However, we do not expect to see a recovery until late 2009 at the earliest,’ he added.
JCB has entered into a consultation processes with the GMB trade union and staff representatives for each of its individual business units affected by the measures.
The company said that voluntary redundancies would be considered as part of the programme.