Unrelenting. That’s the best way to describe the stream of bad news on the jobs front since the start of the new year.
Ford has added to that gloom today as the car giant prepares to swing the axe on 850 posts in the UK.
Up to 500 workers are set to go at the Transit van plant in Southampton under the cost-cutting plans. Hundreds of other posts will be lost across the company through a restructuring of salaried staff.
In a further blow, Ford wants to "re-evaluate" this year’s 5.25 per cent pay deal, saying that its business situation had worsened "significantly" since it was drawn up last October.
Understandably, this last development has angered union leaders who accuse the group of reneging on a deal agreed in "good faith".
Trouble is, things have taken a dramatic turn for the worse since the autumn
– at least on the economic front. The upside is that inflation has come off the boil making that 5 per cent-plus figure look just a tad generous.
I
t’s a bitter pill, but one that Ford’s remaining staff may have to swallow to prevent further jobs carnage.
That the motoring industry is in dire straits there can be no doubt.
Ford’s announcement came as figures from the Society of Motor Manufacturers and Traders (SMMT) showed car registrations reversing 30.9 per cent in January
– the biggest monthly decline since 1974.
The new car market is now expected to decline by almost a fifth in 2009 to 1.72 million, 410,000 fewer than last year and 685,000 down on 2007.
That’s despite some incredibly competitive pricing in the showroom (it really is a buyer’s market out there), the recent cut in VAT and lower borrowing costs.
SMMT chief executive Paul Everitt talks of a "clear need to stimulate demand for new vehicles".
He points to a number of EU countries that have launched incentives to scrap older vehicles and urges the government here to adopt a similar plan.
Could it work? Maybe, though it’s unlikely to trigger much of a stampede.
The simple fact is that consumers are reluctant to part with their cash at the present time, particularly on big-ticket items
– and they don’t come much bigger than a new motor car.
Ford is only the latest major car-maker to resort to drastic action to secure its future. It ain’t going to be the last.
The importance of the car industry to the prosperity of the nation cannot be stressed enough.
Tens of thousands of jobs and billions of pounds of investment are at stake.
Within those SMMT figures, there was a glimmer of hope. Sales of cars in the mini segment
– city runabouts and small hatchbacks – rose more than 40 per cent. Ironically, the new Ford Fiesta was the top selling model.
What greater incentive for car manufacturers to quit churning out SUVs and executive saloons and focus on models that people appear willing to buy?
