Ralf Speth, chief executive officer of Jaguar Land Rover Plc, a unit of Tata Motors Ltd., delivers a speech at the Zero Emission Vehicle Summit in Birmingham, U.K., on Tuesday, Sept. 11, 2018. Brexit-backing lawmakers in Theresa May's divided Conservative Party are gearing up for another fight with the prime minister, this time over how EU law will apply in Britain after it has left the bloc. Photographer: Will Oliver/Pool via Bloomberg
At the Zero Emission Vehicle Summit in Birmingham last week, Jaguar chief Ralf Speth said the carmaker may be forced to halt its UK production lines if its supply chain is disrupted when Britain leaves the EU © Bloomberg

Britain’s largest carmaker, Jaguar Land Rover, is resorting to a three-day working week at one of its factories as it grapples with the impact of falling demand for diesel motors.

The company said it would temporarily reduce production schedules at its Castle Bromwich plant in the Midlands, affecting about half of the site’s 2,000-strong workforce but avoiding job cuts.

“As is standard business practice, Jaguar Land Rover regularly reviews its production schedules to ensure market demand is balanced globally,” the company said.

“In light of the continuing headwinds impacting the car industry, we are making some temporary adjustments to our production schedules at Castle Bromwich.”

Despite the decreased working hours, in effect from October until the start of December, employees there will remain on full pay.

The measure is the latest symptom of the pain spreading throughout Britain’s car industry, which has been hit by weakened consumer confidence and plummeting domestic sales of diesel models.

Ministers have imposed higher taxes on vehicles that run on the fuel following the Volkswagen emissions scandal.

It also came days after JLR’s chief executive warned that tens of thousands of jobs would be lost at the company in the event of a bad Brexit deal.

Speaking at the government’s electric vehicle summit in Birmingham last week, Ralf Speth also said that the carmaker might be forced to halt its UK production lines if its supply chain is disrupted when Britain pulls out of the EU on March 30.

Since its takeover by India’s Tata Motors a decade ago, Jaguar Land Rover has been the emblem of a resurgent British car industry. Overall domestic output in 2016 was at the highest level since the turn of the millennium.

But the number of vehicles rolling off UK production lines decreased in 2017, the first decline in eight years.

New domestic diesel car registrations have slumped almost 30 per cent so far this year, according to the Society of Motor Manufacturers and Traders.

JLR, which employs some 40,000 people in Britain, laid off 1,000 agency workers this year, blaming the uncertainty around Brexit and the diesel downturn. Hundreds of jobs are also going at Japanese carmaker Nissan’s plant in Sunderland.

The Unite trade union lashed out at the government’s handling of the UK’s impending departure from the EU. Prime Minister Theresa May is seeking to convince dissident Brexiters in her Conservative party to back her negotiating position.

“This is the continuing effect of the chaotic mismanagement of the Brexit negotiations by the government which has created uncertainty across the UK’s automotive industry and the manufacturing sector generally,” said assistant general secretary Tony Burke.

“It is also the result of the mishandling of how the UK makes a just transition from diesel and combustion engines to electric vehicles. Both issues have damaged the ‘jewel in the crown’ of UK manufacturing — our automotive industry.”

JLR added that it was continuing to invest in new products and technologies and was “committed” to its UK plants.

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