Here are this week’s headlines, brought to you by our Student Commercial Awareness Team:
- Jaguar Land Rover’s Quarterly Sales Hit by Brexit: New Diesel Legislation and Trade Tensions
Reported by Rui Ci Lee
Jaguar Land Rover (JLR) faced a sharp loss of car sales this quarter and has implemented a turnaround programme involving further job cuts.
The UK carmaker which is also owned by Indian conglomerate, Tata, made a loss of profit of £90m in the three months to September 2018 due to falling demand in China and Europe. This time last year, the company earned £380m of profit. Overall, the company’s sales declined in all of its main market as global sales for the quarter decreased by 13.2%.
The company’s decline in sales is caused mainly by three issues – a weaker Chinese market, Brexit, and tighter regulation on diesel vehicles in the UK. Due to the US-China trade tensions, the import duty changes in China has triggered consumer uncertainty. The company is also facing tighter competition in the country as rival carmakers are undercutting its relationships with dealers. However, JLR is expecting to benefit over the medium term following the import duty cuts for European cars introduced in China in July.
On the other hand, leaving the EU single market will make it difficult for the company to build cars on time and within budget in the UK. To quote JLR chief executive, Ralf Speth, the Chequers plan will cost ‘tens of thousands’ of jobs in the car making industry. The company had laid off 1,000 employees at its Solihull factory in April and it announced that it will move 2,000 staff to a three-day week at its Castle Bromwich plat in West Midlands in September. Additionally, JLR will feel the pinch from increased regulatory scrutiny on diesel vehicles, as many of its models have diesel engines.
JLR’s £2.5bn plan to reduce costs and battle against falling demands is to reduce investment, cut back on production, freeze recruitment, and lay off agency staff. This will be a challenging time for JLR and its suppliers.
- Staff at Google Stage a Walk Out
Reported by Anna-Mei Harvey
Thousands of Google employees have walked out in protest amid accusations of sexual harassment gender inequality and racism. Whilst being one of the most forward thinking tech companies, Google is the latest firm to be attacked for its lack of action in tackling such issues.
Employees have constructed a list of formal demands that include the election of a chief diversity officer and a commitment to end pay and opportunity inequality. Perhaps the driving force behind today’s protests was the demand for forced arbitration to be brought to an end. This comes after the New York Times revealed that Andy Rubin, a high profile Google executive had been dismissed with a pay out in excess of $90 million amidst ‘credible’ sexual harassment claims. Walk outs have been staged in London, Zurich and Singapore to name a few.
One Google employee, Amelia Brunner told a Guardian report that she was protesting not only against alleged sexual harassment in the workplace but also to combat sexism. She advised the reporter that her work was more closely scrutinised and subject to more criticism than that belonging to her male counterparts. Such claims add fuel to the inequality fire, inequality after all includes but is not limited to pay and the amount of executive position held by female employees.
There is progress being made though as it was not just women who walked out today, one male employee was noted to have said that he was walking out because he “has a mother and sisters” that may suffer similar treatment. The man, who declined to give his name, recognises the forum he had and the recognition given to larger companies and used this opportunity to vocalise his concerns for women at work more widely.
- Brexit’s Effect on British Manufacturers
Reported by Zara Smith
A survey was conducted, and results showed that since the decision of leaving the European Union in June 2016, British manufacturers have experienced their worst month of sales. Manufacturers account for 10% of the UK’s economic output, however despite this, foreign demand keeps dropping due to Brexit uncertainties, meaning orders from the EU are dropping also.
There are increasing and ongoing fears that Britain could leave the EU without a transition deal as Prime Minister, Theresa May, has failed to strike any deal with the other EU leaders. May not having any deal sorted yet, means many manufacturers are concerned a no-deal Brexit could lead to border delays which would affect their just-in-time processes.
Rob Dobson the director at IHS Markit, which created the survey, said: “October saw a worrying turnaround in the performance of the UK manufacturing sector. At current levels, the survey indicates that factory output could contract in the fourth quarter, dropping by 0.2%. New orders and employment both fell for the first time since the Brexit vote as domestic and overseas demand were hit by a combination of Brexit uncertainties, rising global trade tensions and especially weak demand for autos”
In October this year, over 48% of UK manufacturers were expecting output to be higher next year. The hope for more growth for the manufacturers has lead to new product launches and new export opportunities.
Read more here.