Aston Martin’s Midland workers – rather than those in South Wales – are likely to bear the brunt of the 500 job cuts recently announced, it has been claimed.
The union which represents the car maker’s workers said the car maker’s Warwickshire workers will be hit hardest and it is a view echoed by a renowned automotive expert.
Aston Martin announced the cuts on June 4 and said they were linked to scaling back sports car production.
The car maker has two factories – at Gaydon and at St Athan in South Wales – but sports car production takes place in Warwickshire.
The Welsh factory represents a more recent investment and it is home to production of the company’s new DBX SUV.
In the wake of the announcement, the trade union Unite urged Aston Martin to reconsider the plan to cut almost a fifth of its workforce.
Unite has called on the car maker to reconsider the scale and number of job losses.
Aston Martin has a total workforce of 2,600, but Unite says that the threatened losses will fall almost entirely on the company’s Gaydon plant which employs about 1,600 people.
Unite regional officer Tim Parker said: “This is a really cruel blow to the workers and their families, as well as a massive hit to the West Midlands economy and the supply chain.
“At the same time as Aston Martin has been making use of the taxpayer-funded job retention scheme to furlough the majority of the workforce, it is now planning to throw a third of the Gaydon workforce onto the scrapheap – we think that is repugnant.”
The union’s view was echoed by automotive expert Dr Charles Tennant.
The former Land Rover chief engineer and Tata Technologies board member said: “Aston Martin has now stated that the company now requires a fundamental reset – and let’s not forget that it has already gone bust no less than seven times since starting up in 1913 – so they are going to drastically reduce front-engined sports car production, to rebalance supply to demand and reduce costs to improve productivity.
“Therefore it is seeking to save £18million in capital expenditure and manufacturing, £12million in cash restructuring and a further £10million in operating costs.
“And this is why the job losses are absolutely required and worryingly for the West Midlands the axe is more than likely to fall significantly at their Gaydon manufacturing site, which employs 1,600 people, building the very products that are now in short demand – the DB11, Vanquish, Rapide, and Vantage sports cars.”
He added: “Whereas the brand new St Athan plant in Wales – which received £18m in Welsh Government financial support – is already producing the much-needed DBX car, for which the order book is said to be strong and the headcount is already at 600 and expected to grow to 750 when at full production is achieved on track for deliveries in the summer.
“The trade unions – and probably the Government too – would no doubt prefer that the 500 people should remain on the Aston Martin payroll, through the state-funded wage furlough scheme in the hope that their highly-skilled jobs can be saved if demand picks up later.
“But this is not how business works in the private sector, where a simple supply-and-demand equation dictates the fundamental cost base of a company.
“So unfortunately those jobs will have to be sacrificed now to preserve the future of Aston Martin – and even that is not a given.”
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Mr Tennant said the Aston Martin restructure was one of many across the automotive industry and that manufacturers at the luxury end would be hardest hit by the coronavirus pandemic and resultant recession.
He said: “The global car industry was already slowing and then the coronavirus pandemic threw it over the cliff edge, and now we’re seeing job losses at all manner of UK based companies from the Formula One team owner and maker of supercars McLaren (1,200 job losses – 25% of its workforce), the luxury carmaker Bentley (1,000 job losses – 25% of its workforce) and now Aston Martin (500 job losses – 20% of its workforce).
“And we now wait with baited breath to see what the troubled Jaguar Land Rover will do to add to the doom and gloom.
“Yet the volume car makers such as Nissan and Toyota have so far been spared job losses – Nissan recently favouring their UK plant at Sunderland over their Spanish Barcelona factory which is being closed with the loss of 2,800 jobs.
“The problem is that it is typically the higher end luxury premium car companies that suffer first during a financial crisis or recession, and this means that the UK with its plethora of high-end car manufacturers will now suffer a disproportionate level of pain.”
Mr Tennant said Aston Martin’s problems run deep and it had issues to deal with before the coronavirus pandemic.
“Aston Martin has had a shocking demise with a share price languishing at less than a pound from its much lauded stock market flotation in 2018 where the shares were initially listed at £19 – valuing the company then at £4 billion,” he said.
“Falling sales and huge financial losses with high levels of debt saw the company effectively being taken over by the Canadian billionaire Lawrence Stroll, who with his Yew Tree consortium of investors – including the JCB billionaire Lord Anthony Bamford – invested £260m with an additional £536m of funds from a rights issue giving them a 25% stake.
“This has given the company some much-needed breathing space and additional funds to complete the DBX SUV crossover vehicle.
“Meanwhile Mr Stroll has wasted no time stamping his authority on the company, first ousting the CEO – former Nissan executive Dr Andy Palmer – and then clearing out the board.”
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Mr Tennant added: “He has now declared that the company needs to reset itself to lower sales forecasts and focus on building cars to order, rather than pushing them onto the dealer network as wholesales – or so called filling the sales pipeline.
“With vehicle sales halving in the first three months of this year and losses of £119m you can see his point.
“He has already appointed a new CEO – Tobias Moers – known as the engine king at Mercedes – where he has run their successful AMG performance division – and is seen as a perfect fit at Aston Martin.”