JCB hits out at banks as axe falls on 700 jobs

Jan 13 2009 by Henryk Zientek, Huddersfield Daily Examiner

MACHINERY giant JCB today hit out at the banks as it announced plans to axe 700 jobs.

The company blamed the move on the lack of credit available from banks coupled with continuing low confidence.

Several sites will be hit by the cuts, including plants in Staffordshire, Derbyshire and Wrexham in North Wales.

Workers at the company voted to reduce their hours last year in a bid to save jobs – a move which the firm said has protected more than 300 employees from the threat of redundancy.

Production in the UK in the first three months of 2009 will be about 75% lower than at the same time last year, the company revealed.

It said a predicted upturn in the second quarter now showed “no sign” of materialising.

JCB chief executive Matthew Taylor said: “Back in November, we forecast a moderate second quarter recovery in 2009 based on the fact that Governments around the world had pumped a huge amount of money into recapitalising financial institutions and had commit ted to stimulus packages – which included significant spending on public construction projects.

“Two months later, despite the recapitalisation, customers are still struggling to buy machines because of a lack of available credit and with Government-funded construction projects not moving forward quickly enough, this means the anticipated second quarter recovery simply won’t happen.”

Mr Taylor said: “The ongoing reluctance of the banks to provide credit is aggravating an economic downturn which is now becoming much steeper than we could have ever envisaged.

“This unprecedented situation needs to be addressed with some urgency so that confidence and stability can return, otherwise irreparable damage will be caused to the UK’s manufacturing industry.”

The latest job losses, affecting 593 shopfloor and 91 staff, are in addition to 1,000 redundancies announced since July.