THE creation of 1,100 new jobs in the West Midlands by Jaguar Land Rover shows the British car industry continuing to accelerate. It’s also another reminder of just how far JLR has come from the dark days of 2009, when it instituted a four-day week to avoid job cuts and looked to the European Investment Bank for an emergency loan.
More recently, doubled investment from JLR’s Indian owner Tata Motors and a focus on growth in emerging markets have helped to drive the record annual profit of £1.51bn that was announced this May.
JLR is operating in a higher gear than Peugeot, which posted a €662m (£518m) loss yesterday, but at least Peugeot has the sort of bold turnaround plan that took JLR from the doldrums to its current status as one of the few bright spots in the UK economy.
France’s new socialist government has other ideas, of course. Rather than letting Europe’s second-biggest carmaker restructure, which might give the firm a fighting chance of a comeback, it proposes protectionism against Asian rivals and some unimpressive green subsidies for electric cars.
Neither are serious suggestions. €350m for “the invention of tomorrow’s cars” and €450m for factory upgrades might look ok on a press release, but Peugeot lost €19m more than those two figures combined in the first six months of the year all on its own.
For a company in Peugeot’s position, facing economic meltdown in the Eurozone and a French administration proudly committed to increasing the economic burden on employers, radical surgery is the only sensible solution.
Finding €1.5bn in savings now by incurring 8,000 job cuts is the sort of plan that makes future growth possible. Francois Hollande, like George Osborne, will find that well-meaning half-measures don’t work.
Marc Sidwell is City A.M.’s managing editor