British Luxury Car Makers Bentley, Aston Martin And McLaren Cuts Thousands Of Jobs

The severe hit that the outbreak of the novel coronavirus has had o the sales of luxury cars all over the world has forced British luxury auto makers Bentley, Aston Martin and McLaren to lay off about 3,000 employees over the past two weeks.

About 1,000 employees in the United Kingdom, or about a quarter of its workforce had been paid off by it, Bentley said in a statement on Friday. The outbreak of the novel coronavirus pandemic meant that an “urgent reduction in the workforce” was needed, said the company that was launched about a 100 years ago and is currently owned by Volkswagen.

Voluntary resignation packages to workers had been offered by it, the car maker said. The company however said that it could not commit to no forced lay off in the future. “Covid-19 has not been the cause of this measure but a hastener,” said the company’s CEO Adrian Hallmark.

Previous to the layoffs, a number of measures including freezing of pay for employees, releasing contractors and freeze on recruitment of new employees had already been taken by Bentley. At the peak of the pandemic, almost 70 per cent of the total employees of the company were placed in the furlough scheme announced by the UK government.

A day prior to the announcement by Bentley of the layoffs, plans to eliminate 500 jobs because of drop in sales were announced by Aston Martin. The luxury car maker, known worldwide as the preferred ride of the fictional spy James Bond, has also decided to change its CEO with he appointment of Tobias Moers last month from Mercedes-AMG.

Since the launch of its IPO in October 2018, the share price of Aston Martin has collapsed. In the first quarter of this year, the company reported an operating loss of £76.7 million ($94.4 million) compared to a loss of £3.2 million ($3.9 million) in the comparable period a year ago.

About 1,200 jobs, or more than a quarter of its 4,000-strong workforce were being axed by it, said Formula One team owner McLaren in a statement on May 26. A reduced demand for technology, the closure of production facilities and showrooms around the world and the cancellation of racing events were blamed by the company to be behind the reasons for its action.

“It is a course of action we have worked hard to avoid, having already undertaken dramatic cost-saving measures across all areas of the business,” said the company’s executive chairman Paul Walsh. “But we now have no other choice but to reduce the size of our workforce.”

However, even in recent years, there has been a reduction in demand for some of the models of luxury British carmakers which is a result of the global drop in demand for cars as well as the uncertainty surrounding Brexit.

“It has been a black week for UK Automotive with devastating job cuts across retail and manufacturing coming hard on the heels of earlier losses. Whilst the industry is fundamentally strong and agile, it is not invincible,” Mike Hawes, CEO of The Society of Motor Manufacturers and Traders, said in a statement on Friday

(Adapted from CNN.com)



Categories: Economy & Finance, HR & Organization, Regulations & Legal, Strategy, Sustainability, Uncategorized

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: