A cat's muted purr
COVENTRY, ENGLAND--When Bill Hayden first visited Jaguar Cars' Browns Lane assembly plant, he called it one of the worst facilities he'd seen, outside of the Soviet Union. Jaguar's long, proud history as a maker of luxury cars had been severely dented by poor quality and outmoded production techniques.
But Hayden, the executive Ford put in charge of Jaguar after purchasing it in 1989 for $2.5 billion, and his successors managed to revamp the historic 65-year-old facility. Ford invested substantial amounts of money upgrading the plant, and its workers agreed to flexible work rules that boosted efficiency.
Browns Lane threw off the mantle of Stalinist incompetence to become one of Ford's most productive plants. Nevertheless, by next September, manufacturing at Browns Lane will cease. The planned job losses are not huge by industry standards. Jaguar is relocating 425 hourly workers to its Castle Bromwich plant, 15 miles away, and buying out 400 workers. It's also idling 750 salaried Jaguar employees. An additional 310 workers will remain at Browns Lane to continue manufacturing wood paneling.
Strike vote. The closure, designed to stem huge losses at Jaguar that threaten Ford's long-term business plan, was applauded by analysts who deemed it unavoidable. But Jaguar workers are--not surprisingly--angry. Standing outside the plant's smart dark-green and white gates, which are adorned with a huge version of its sleek silver jaguar ornament, Jim Brady, a 49-year-old quality-control worker and a 26-year veteran of the company, is bitter. "We have the best productivity within Ford," he says. "If Ford can do it to us, they can do it to anybody." The Transport and General Workers' Union plans to ballot Jaguar workers for a strike authorization.
The plant was doomed after $362 million worth of red ink spurted from Ford's Premier Automotive Group in the second quarter. The group comprises the high-margin marquee brands of Jaguar, Land Rover, Volvo, and Aston Martin, and Ford wants it to provide a third of its earnings by 2006.
Ford insists that goal remains doable, although the target date may slip. Making the group act as the engine that pulls Ford into the future is a sound plan, says John Wormald of automotive consultants Autopolis. But right now, "it's pulling in the wrong direction." Of the four, only Volvo is profitable.
Ford doesn't break out numbers for the group's individual companies but indicates that the lion's share of blood is coming from the big Coventry cat.
Ford expected Jaguar to reach yearly sales of 300,000 cars. But last year's sales totaled just 120,000, down from 130,000 in 2002. Now the company says it would be comfortable if sales remained within the 125,000-to-130,000 range. Half of Jaguar's market is in the United States, where the rising pound has increased sticker prices and sales are off 11 percent from 2003's anemic pace. Also, Jaguar's new X-type--a less expensive model aimed at younger buyers and essentially a tarted-up Ford Mondeo--hasn't caught on with its target market. "It doesn't have a style that appeals to 30-somethings," says Jay Nagley, an analyst at Spyder Automotive. "It looks like an old man's car that's been shrunk."
Until Jaguar has a stronger product line, Nagley says, it needs to cut costs (a process likely to take several years to complete) because a niche player doesn't need three manufacturing plants. Browns Lane gets the ax, despite its productivity and heritage, because of its antiquated layout. Jaguar can only assemble cars here, and there's no paint shop. Nor is expansion an option: The aging, red-brick plant is hemmed in by streets of neat, middle-class suburban houses.
Still, Ford in 1998 promised to keep Browns Lane open in recognition of its productivity and to allay fears of job losses when a third Jaguar plant was opened near Liverpool, and that's a source of workers' outrage. Nagley's sympathetic: "The workers are the collateral damage of marketing and design blunders." Meanwhile, Ford is taking a tough line at Land Rover, based at nearby Solihull. It's also an iconic brand, but its sales have slid as Land Rover's reputation for shoddy quality has increased. Ford threatened to shutter the plant unless its 8,000 workers accepted new work rules to improve productivity. Few doubt the workers will agree. Ironically, Ford told Land Rover's workers it wanted them to become as competitive as Jaguar's.
This story appears in the October 4, 2004 print edition of U.S. News & World Report.
advertisement
