2,000 UK auto industry job cuts highlight bleak outlook | Job losses

The bleak outlook facing Britain’s car industry was underscored by another 2,000 job losses and the worst car sales in May since 1952.

Only 20,000 new cars were registered in May compared to 184,000 in the same month in 2019, the Society of Motor Manufacturers and Traders said. Just over half a million new cars were sold in the first five months of 2020, up from over a million at the same time last year.

Car dealership chain Lookers said it planned to cut 1,500 jobs and close 12 dealerships just days after car showrooms reopened in England, although they remain closed in Scotland, the Country of Wales and Northern Ireland.

The group, which operates 164 car dealerships, said the redundancies were necessary to protect the long-term future of the business and hopes to save £50million a year from job cuts. It currently employs 8,100 people and two-thirds benefit from the government furlough scheme.

The company will soon begin consultations on the redundancies, which will reduce its workforce by almost 20%.

Warwickshire-based luxury carmaker Aston Martin Lagonda also announced 500 redundancies.

SMMT chief executive Mike Hawes said the second month of the auto industry shutdown had a “devastating impact” on the market and described the reopening of dealerships this week as “a watershed moment for the whole of the industry and the thousands of people whose jobs depend on it.Car sales in April fell 97% from 2019 levels.

The new job losses come just days after McLaren announced the cut of 1,200 jobs.

The dealership closures at Lookers, which sells vehicles for major automakers including Toyota, Ford and Volkswagen, as well as luxury brands like Aston Martin, Bentley and Ferrari, add to the 15 closures announced in November 2019. More will remain. 136 electrical outlets.

Lookers said it took orders for 2,865 new and used cars in the past fortnight, half the number of sales compared to the same period in 2019.

Hawes said early reports from dealers were encouraging, but it’s too early to tell how demand will hold up over the coming weeks and months. He added: “Restarting this market is a crucial first step to spur the recovery of the UK’s critical carmakers and supply chain, and to support the wider economy.”

Aston Martin recently nearly went bankrupt for the eighth time in its 107-year history. The coronavirus pandemic forced it to close 90 per cent of its global dealerships and in May it reported a loss of £119million for the first three months of the year.

The company has since been bailed out by billionaire Lawrence Stroll, who led a £536m bailout deal in March and then injected another £75m to enable the company to battle a cash crunch.

The jobs announcement comes just days after Aston Martin sacked its chief executive, Andy Palmer, as part of a wider overhaul of the board. A Mercedes executive, Tobias Moers, will replace Palmer.

The sports car maker employs a total of some 2,600 people, but union Unite said the threatened losses would fall almost entirely on the Warwickshire factory in Gaydon, which employs around 1,600 people.

Unite regional manager Tim Parker said the job losses would be “a major blow” to the West Midlands economy and supply chain.

“We cannot afford to lose such highly skilled, world-class manufacturing workers,” he added.

He urged the company to seek only voluntary redundancies and the government to provide financial support, and added: “Aston Martin has used the taxpayer-funded job retention scheme to lay off the majority of the workforce. he now plans to scrap a third of Gaydon’s workforce – we think that’s disgusting.

Mark Raban, Managing Director of Looker, said: “We have taken the decision to restructure the size of the group’s dealership fleet to position the business for a sustainable future, which unfortunately involves redundancy consultation with a number of of our colleagues. It was a very difficult decision.

The company has received initial results from an investigation into potential fraud at an operating division of the business, which has delayed the release of its 2019 results.

","isTracking":false,"isMainMedia":false,"source":"The Guardian","sourceDomain":"theguardian.com"}">

The group said an investigation by Grant Thornton accountants had shown the need for it to strengthen certain “behavioral and cultural aspects related to its control environment” and that it was taking steps to address them.