Lack of credit blamed for new JCB job cuts
By Chris Sleight12 January 2009
JCB has announced another 684 redundancies in the UK on top of the 1000 jobs it shed last year. The company said the main reason for the cuts was the lack of available credit for its customers to fund machine purchases. It is now forecasting that production in the UK for the first quarter will be -75% lower than at the same time last year.
JCB 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 recapitalising financial institutions and had committed to stimulus packages which included significant spending on public construction projects.
"Two months later, despite the recapitalisation, 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.
"The ongoing reluctance of the banks to provide credit is aggravating an economic downturn which is now becoming much steeper than we could have ever 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."
The latest job losses affect 593 shopfloor and 91 staff positions and are in addition to 1,000 redundancies announced since July. JCB employs around 7900 globally, with around 4800 in the UK.