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UK plant manufacturers forced to cut back workforces as downturn worsens

When JCB announced a programme of redundancies and short-working in July, nobody was surprised that the UK’s leading plant manufacturer should have to adapt to a fall in demand for its products.

But what has surprised people is just how severe this fall in demand has proved to be. Last week, JCB announced its third wave of redundancies since the summer.

Around 400 more jobs are to go and chief executive Matthew Taylor warned that the total number of job losses was likely to reach 1,000.

JCB has not only survived previous recessions, it has also grown to become a beacon of British manufacturing. Strong management and a refusal to shy away from making tough decisions have contributed to this success. But it is not alone in taking drastic action to cope with the downturn. All UK plant manufacturers have had to follow suit.

Vince Porteous, publicity officer with Komatsu UK, has no doubt that every other plant manufacturer is cutting back drastically.

“We’re all in the same boat,” he says. “The downturn has to affect everybody and I’ve no doubt you’ll hear the same voice throughout the UK”.

Komatsu, whose Birtley factory produces tracked excavators from 13 to 75 tonnes, has responded to the downturn by effectively halving production.

It has announced 21 ‘non-production’ days when the factory will lie idle during November and December.

“All staff will come to work as usual, but they will be employed in cleaning and maintenance work and receiving training,” Mr Porteous said.

No more temps

In addition, Komatsu is also laying off 20 temporary employees. “There will be no more temporary production staff,” said Mr Porteous, who added that the job losses had been discussed and agreed with the company’s employee advisory council and the trade union Unite.

Although Komatsu has scheduled only 21 non-production days for the remainder of this year, Mr Porteous was unable to confirm whether or not normal production would resume in the New Year.

In an interview on BBC Radio 4’s Today programme last week, JCB’s Matthew Taylor explained that his company’s programme of redundancies was a response first to the downturn in the UK and US markets; then, in September, to a worsening in the European market; and now to “a severe deterioration in countries where the construction equipment industry has held up relatively well” such as the emerging markets of India and China.

All manufacturers are affected in all markets. Volvo has already shed 850 jobs in Sweden, and Terex recently announced a 17 per cent staff reduction worldwide.

A Terex source confirmed last week that the company’s Coventry factory is now only making backhoe loaders to customer order.

Paul Ross, board member and former president of plant manufacturers’ trade body the CEA, acknowledged the depth of the downturn, but pointed out that “we have been living on an artificial high for the past three years”.

But describing JCB’s programme of cut-backs as “a prudent and well-justified reaction to the problem”, Mr Ross said such moves should be welcomed: “This preserves the integrity and viability of the industry. It might seem like the end of the world, but it’s not”, he said.