Lack of bank credit blamed for new job losses at JCB

THIS week JCB announced a further 684 redundancies in the UK, primarily, they say, as a result of the lack of credit available from banks to fund machine purchases, and continuing low confidence.

The latest job losses affect 593 shop floor and 91 staff positions, and are in addition to the 1,000 redundancies already announced since last July.

The company says production in the UK in the first three months of 2009 will be around 75% lower than at the same time last year and an anticipated upturn in the second quarter now shows no sign of materializing.

Commenting on the situation, JCB’s chief executive, Matthew Taylor, said: ‘Back in November we forecast a moderate second-quarter recovery in 2009, based on the fact that governments around the world had pumped a huge amount of money into recapitalizing financial institutions and had committed to stimulus packages which included significant spending on public construction projects.

‘Two months later, despite the recapitalization, customers are still struggling to buy machines because of a lack of available credit. And with government-funded construction projects not moving forward quickly enough, this means the anticipated second-quarter recovery simply won’t happen.’

Mr Taylor added that the ongoing reluctance of the banks to provide credit was aggravating an economic downturn which was now becoming much steeper than could ever have been envisaged. ‘This unprecedented situation needs to be addressed with some urgency so that confidence and stability can return, otherwise irreparable damage will be caused to the UK’s manufacturing industry,’ he said.

JCB’s Staffordshire plants affected by the latest redundancies are: the World HQ, Rocester; JCB Heavy Products, Uttoxeter; JCB Compact Products, JCB Earthmovers and JCB Cecilly Mills Operations, Cheadle; and JCB Cab Systems, Rugeley. JCB Transmissions, Wrexham; and JCB Power Systems, Derbyshire, are also affected.