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Could Jaguar Land Rover Be Brexit's First Victim?

Industry News / Comments

March 29 is exactly two months from now.

As we previously reported, Jaguar Land Rover has been experiencing a significant sales slump in its most critical markets, including China. Fortunately, parent company Tata has a plan to reverse the UK-based automaker's troubling finances and get things back on track. The bad news is that there's one outside factor which could seriously hinder that plan and JLR can do nothing about it: Brexit. And now we're learning from Reuters that JLR will soon be doing the one thing many have been dreading: a production stoppage. The automaker has announced that there will be a week-long production halt in April because of potential disruption caused by Brexit.

"There will be an additional week of production stand-down 8th - 12th April due to potential Brexit disruption," Jaguar Land Rover said in a statement on Thursday.

Britain is still on course to leave the EU on March 29 and so far there's no exit plan. No one knows what's exactly going to happen and UK-based automakers are particularly worried. Bentley, for example, is making sure its warehouses are overstocked so that there'll be no immediate issues with importing parts from suppliers. Will there be an import tax? Export tax? How much are we talking? Because of these questions, finance departments can't make the necessary plans. Jaguar Land Rover has already cut back on production due that slowing demand in China and with Brexit looming and the April production line stoppage, who knows what could be next.

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Layoffs are certainly a possibility though JLR has not officially gone on record to discuss that. CEOs of other UK automakers, specifically Aston Martin, have openly criticized politicians from all parties for failing so far to make a deal with the EU. Everyone knows there's a deal to be had, but certain UK political hardliners are blocking Prime Minister Theresa May from making one. That could make life very difficult for JLR and its thousands of employees very soon.