Tata Motors, the owner of the British luxury car brand Jaguar Land Rover (JLR), has scrapped plans to shutter its Castle Bromwich plant following JLR's dramatic recovery from the worst recession seen by the UK automotive sector since the mid-60s.
Not only has JLR decided to keep the plant running, the iconic car maker, which contributes £6 billion to the UK's exports, has agreed to hire nearly 2,000 more workers as well as to a pay rise to existing employees.
The decision to keep the plant running was taken after the management of JLR reached an agreement with the union on a new pay deal, which is to be voted by the 2,500 employees of the Castle Bromwich plant.
Under the deal arrived late last evening with the union, workers will get a 5-per cent pay rise this year and 3 per cent next year as part of a two-year deal in return for increased flexibility of working hours at the plant in line with other carmakers in the UK.
In September 2009, Tata Motors had said that it would merge the two West Midlands plants in Castle Bromwich, near Birmingham and Solihul into one and close one of them. (See: Tata Motors to merge JLR plants, create additional 800 jobs)
The automaker had also said that it would take a decision by the first half of 2010 after reviewing the costs, productivity and talks with the union.
JLR is the UK's biggest car maker and employs nearly 14,500 workers at five sites, which include three manufacturing plants and two product development centres. It is a major wealth generator for the UK with 78 per cent of Land Rovers exported to 169 countries and 70 per cent of Jaguars to 63 countries.
Since JLR is a premium car maker and its major markets like the US, Russia, China and certain parts of Europe are now on their way to recovery, analysts feel that JLR's good run could continue into 2011-2012.
With an improving global economy and JLR making a dramatic recovery, Tata Motors in April 2010 was reconsidering its earlier decision to close one of the plants in the Midlands especially after it revamped its top management with the induction of Carl-Peter Forster, the new group CEO of Tata Motors and Ralf Speth, the new chief executive of JLR.
In September, Tata Motors said JLR had made a pre-tax profit of £233.8 million with sales up by 30 per cent year-on-year at 19,386 units in July 2010-Jaguar sales were up 26 per cent at 5,676 units while Land Rover sales grew at a higher 31 per cent to 13,710 units in July.
Carl-Peter Forster had ordered a fresh 100-day strategy in March 2010 to review the future of JLR's plants and had initiated extensive discussion with the union. He had categorically said that the two Midlands plants are at the heart of Tata's ambitious plans for global growth.
After intensive discussions between the company and unions, I can confirm that we will be keeping our third plant open,'' said Ralf Speth.
Gerard Coyne, regional secretary of Unite union said, "It's an excellent deal and we are very pleased that this now secures the future for Castle Bromwich, but also a commitment to a three-site solution for JLR in the UK, which is great news."